ATM and Dubai – A Perspective

I did say I would try and avoid doom and gloom stories- but I think that this is a story that should be told.

This week the Professor was in Dubai during Arabian Travel Mart. I use the opportunity to both catch up with clients, friends and even people who don’t fall into either of these categories. The marketplace is very subdued. There are grim faces everywhere. Rumours are flying of the doom and gloom variety. I can attest to several first hand observations of the depth of the collapse in Dubai. I do not use that word lightly. While there are some positive signs from Emirates of stable passenger numbers, EK is not immune from the same pressures that Legacy carriers such as BA and Delta are experiencing. The International Herald Tribune had an article May 8th 2009 on the impact of the biz travel downturn on SQ, BA and others. It is clearly a state of affairs that has astounded everyone by the depth and breadth of the reductions.

The ATM show itself was down in exhibitor volume. The halls that handled the property groups were actually closed. Throughout the show there were empty stand positions, something I do not recall from prior shows. I attended all 3 days and on no day did the attendance look anything like prior years. It was frankly very quiet, I had meetings at the coffee shop in the center of the halls and I could observe the traffic on both entrances – there was no rushing, no bunching . I am sure numbers must be down at least 20% probably a lot more. The building program exacerbated the problems of taxis and I am sure that this upset and frustrated many a show goer. I went out of my way to talk to hoteliers to get their perspectives. I was so taken aback by their war stories. Typical responses: “ we don’t know when we will be back to above 40% occupancy” and “I doubt we are even covering our opex let alone debt coverage.”

One night I went with some colleagues to the new Atlantis resort at the end of the first completed Palm. To say that it was quiet would be like saying a mortuary was a busy place. Rates are down universally. I spoke to several people who gave me first hand stories of deals they had received. Even the top hotels like the Jumeriah properties, The Fairmont and the Grand Hyatt all had evidence of heavy discounting.

The exodus of the expat community is also significant. While no hard numbers exist – I was again quite taken aback by the number of people I knew personally who had left or were leaving.

It is going to take a long time for normality to return. By normality – I mean reasonable yield and occupancy levels. Clearly Dubai has to do a lot to remarket itself and lower its costs. The Saudi traveler who is the most coveted customer these days has so many choices elsewhere that he needs to be courted and sold to rather than held at arms length.

New skills like selling rather than order taking will need to be learned.

Cheers

Stupid Vendor Tricks

It never ceases to amaze me how some suppliers treat their customers.

I most cases the customer is treated like an idiot. Or worse that he is given a useless offer that is just not deliverable,

Let me give you an example.

Avis… I rent them all the time. They tell me how wonderful I am and that they award me free rental weekends. So far I have NEVER been able to use them.

Now comes news of their latest offer. Rent for one week a premium car and you can have for 2 days a GPS for free. So of course we will all want to go through the hassle of returning the unit. And really we want to rent a unit for the whole 5 other days….

Hello people!!!

Note to vendors, treat your users with respect and they will respond to you. And ALWAYS remember Newton’s second law:

To every action there is an equal and opposite REACTION.

Cheers

Capacity continues to fall – dramatically – Are we there yet?

I have just spent nearly a week in the UK and have been looking at the current situation of the market. I think we all know that premium traffic is just a disaster. Last week British Airways announced a 2:1 sale on business class. This on top of their free seats for SMEs.

Capacity continues to fall globally. On this scale, the world's airlines have cut 6% flights for April 2009 Y/Y with a 3% drop in seat capacity. According to the latest statistics from OAG, frequencies and capacity within the UK for April are down year on year by 13% and 14% respectively, the last time the April figures for the UK were lower than this was in 2001. International services to and from the UK are down by 10%. The LCC sector is not immune either with a 12% reduction in capacity. In the USA another metric is the reduction of the number of routes. In one year according to anna aero the number has dropped domestically by 300.

So have we reached the bottom yet? Sorry – I don’t think so. With a bumper summer being promised for the UK – I don’t see people opening their wallets for flights. Instead they are going to be spending it in their back gardens and working on some DIY. This past April – while not the warmest on record was the 10th warmest April ever recorded. People are not going to be too keen to travel….

Of course if this week’s Bank Holiday is anything to go by – then we know that every bank Holiday this summer will be guaranteed to rain!

Cheers

GDSs Glorify Their Fare Performance! But Can You Trust Them?

You can tell I have been contemplating the issue of Trust.

As some of you may know there is much debate around the “who gets the lowest fare really” question.
Sabre is touting its Topaz based study. Now it has even gone to the expense of creating a website devoted to the achievements.

I make no judgment of the study or its methodology. However in our private studies – we can assure you that there are differences – frequently significant – between the results of the GDSs, the results of the OTAs and the results of the Airline.com sites. The results vary significantly market by market. (And don't get me started on the meta-search companies). Now we also see that as caching is being used more frequently we see difference that are frequently driven by the caching. The “look in one place book in another” only works when it comes with a performance guarantee from the inventory owner. This has been one of my gripes about meta searches. Quality measurements in the performance area is always going to be interesting and probably never coming. Obfuscation is still the order of the day. But I do think there is a glimmer of hope in that less and less people are relying on the GDS as the source of the fares and as a result (particularly outside North America) the issue of a trusted fare is being understood.

Inside the GDS the guarantee of a seat and fare via the PCA (participating carrier agreement) is passed onto the travel intermediary through the subscriber contract. Now that the GDS infrastructure cannot handle the sheer volume of searches on an economic basis – the current answer is to use Cached fares+availability such as via ITA’s engine. However by the time it gets handed off to another source for booking the cache may be out of date or just plain wrong. In the GDS world this is handled somewhat. But in the new world of open access this commercial coverage is still not quite there yet. However it will have to be.

Anyone willing to forward a solution to this problem and its very complex set of issues? (and no I am not accepting that everyone has to use the GDS as the answer).

Answers on a post card or the back of an envelope please….

Cheers

So Who Do You Trust?

In the current economic environment – everyone has to work harder for their daily bread. I dont think there are many people in the Travel Industry who would doubt that statement. Even Prince Waleed (Kingdom Holdings) is down quite a lot. The Evening Standard is even speculating that he may have to cancel his order for the second Private Airbus A380.

So against this backdrop – it is probably a good idea to ask “who do you trust?” As Media goes through a radical change this is a very pertinent question. eMarketer has just published a little piece from TNS Media Intelligence. In this the online players should take heart that their trust levels seem to be pretty high. However there are some really dark clouds in the study.

There is some very interesting data of differences in countries – so its well worth a click on over to this link to see it:

http://www.emarketer.com/Article.aspx?R=1007067

However – some bad news for people like the Professor. Private Blogs are trusted among the least. The most trusting are the Italians at a measly 14%. Everyone else is well below 10%. Makes you want to cry doesn’t it….

Sob Sob

Delta Introduces - ehemmm - Commissions

Say WHAT????

Yes... as a "trial" DL introduces 10% commission... from NYC area to LATAM

And who said generosity is dead?

Cheers

ATM 2009 - Quiet and Very Subdued

So the 2009 Arabian Travel Mart opened today.

Very quiet and very subdued. I participated in many events and spoke to a lot of people who are attending - many for the regular n'th time.

General perception.

UGH!

it is bad.

I can honestly say the overall management was its usual high standard - but the level of attendees was noticeably down.

No crowds at the reception/entrance.

The new taxi process however really sucks.

Cheers

The Icelandic Raiders Vanquished

What a difference a year makes. Just 2 years ago the Icelanders were tackling stakes in such companies as Easyjet and taking a large stake in American Airlines. Now look how far they have come. The last of the raiders is FONS. And this story (roughly translated from Norwegian) tells the story of the bankruptcy filing. Thanks to Professor Kai for this one.

"The district court of Reykjavik approved today to take Fons, holding company of Palmi Haraldsson and Johannes Kristinsson into bankruptcy procedure. The company owns Securitas and Plastprent. Palmi says this is a shock. The company has been in a better position than many other companies.

Fons has been a major company in the Icelandic economy for the past years and amongst other owned a large part in FL Group. With Securitas and Plastprent owns Fons a part of the English toy stores Hamleys and the Nordic travel agency Ticket.

"This is of course an enormous shock," says Palmi but does not want to comment further on the position of the company. The request had been made to put the copany into bankruptcy which the district court approved today. "

This is sad in my view. We need entrepreneurial talent to inject fresh blood into our industry.

Plea To the Dutch: Please Don't Change

The terrible events of April 30th this past week are yet another example of the power of the few (in this case one) to disrupt the lives of the many or indeed the rest.

As with other acts of terrorism - it is always about the ability of someone to destroy the values of the masses to their own selfish ends.

Queen's Day in the Netherlands is a wonderful and joyous occasion that has been existed since 1885. My plea is don't change. Celebrate that which is your unique culture and freedom. To change would be to acknowledge that this deranged person was right and then we collectively all lose. If it gets changed and things are not as they were - then any other like-minded person will do the same thing.

Don't give in and don't change.

Thanks for reading

Cheers

More Pig Flu Resources

This one from Kevin and his team over at BTC:

http://www.netvibes.com/btc#Flu

Cheers

Is A Pax Bill Of Rights Needed?

There are arguments both for and against obviously.

In the European Community and other markets there is a clear set of responsibilities on the airlines.

Just in case anyone is interested - I actually do have an axe to grind on this subject.

But it seems that my lot - which I am happy to share at a future time had nothing on the plight of DL510 on April 10th. In that case the elements conspired against the airline and the passengers were innocent victims. Clearly DL could have done a better job than they did. For a complete chapter and verse on the subject check out today (Tuesday's) Wall Street Journal on the subject.

http://online.wsj.com/article/SB124087571331061425.html?mod=djemseat

In my case - DL had no excuse. The just screwed up. Plain and Simple and of course now they refuse to admit it.

In Europe - as I have reported before there is even a guy who checks the validity of the airlines story about so called "Weather" delays.

Bottom line.

You don't have to take it... and there are already several courses of redress you can take.

And to Delta - I am still waiting for an apology from you. But then again I am still flying you so go figure... may be I am brain damaged by too much flying.

Cheers

Professor On The Road Next 2 Weeks

I have a road trip from hell... so bear with me - it will be quiet from me.

We have a lot coming down soon - there is the Swine Flu panic, the Q1 reports are still trickling in, and I am sure there will be more. Boeing might actually be doing something with the 787.

Keep your heads above water and paddle like crazy!

Cheers

Swine Flu - More an "Infodemic" - USTA

Here is the text of the mail from Roger Dow of US TIA. I think he is being wise.

Dear Travel Colleagues:

As I'm sure you are aware, the swine flu situation is today's lead story in every paper, the morning news shows and on every radio station. The possibility of travel restrictions is already being talked about by U.S. officials and the EU and a few other countries are already discouraging travel to Mexico and the United States. The U.S. Travel Association will take a lead role in addressing this challenge.

Just a few short years ago, the SARS and avian flu pandemics created an "infodemic" with media hysteria threatening air travel, lodging and meetings. We have learned important lessons from those challenges and must apply them in an effective, coordinated manner to this situation. While we in no way want to minimize the seriousness of the threat, it is important that our industry be vigilant about news activity and aggressively report the facts as the situation develops. As we reminded people during previous health scares, it's important to "be prepared, but not panicked."

I will be hosting a conference call at 4:30 pm today with other travel associations to discuss the travel community response. I will keep you informed as the situation develops.
Sincerely,

Roger Dow
President and CEO
U.S. Travel Association

UK's Rich List For Travel

OK Have a heart for the UK's rich list - they lost a chunk of money.

Just for your edification I publish the list of "Travel" related folks from the Rich List.

For the full list go here:

http://business.timesonline.co.uk/tol/business/specials/rich_list/rich_list_search/?l=17

I define the category as Aviation Travel and Tourism - here is the list broken into 100ths. Also for your edification I have put their current or source of their Travel related fortunes beside them. Forgive me for taking a few liberties with the list. Some on the list really are not from or in the UK but that was not my call - the Sunday Times put them in. Check out your favorite person!

28th, Swire family (Cathay Pacific) £1.3bn; 32nd, Sir Richard Branson (Virgin Group) £1.2bn; 49th, Roger and Peter De Haan (Saga/Grey Haired Folks) £840m; 81st, Sir Stelios Haji-Ioannou and family (easyJet/easyGroup) £544m;

110th, Brian Souter and Ann Gloag (Stagecoach) £473m; 128th, the Walker family (Flybe) £400m; =156th, Sir Peter Rigby (aviation, hotels) £330m; =156th, Jasminder Singh and family (Edwardian Group hotels) £330m;

204th, Andrew Davis (von Essen and Premiair) £290m; 207th, Sir Michael Bishop (BMI) £280m; 235th, Peter Harris and family (Bourne Leisure) £245m; 247th, John Cook and family (Bourne Leisure) £225m; 264th, John Woodward (caravan parks); £212m; 268th, Mike Gooley (Trailfinders) £205m; =274th, David Babai (Gullivers Travel Associates - see also =694) £200m; 296th Geoffrey Kent (Abercrombie & Kent) £193m;

307th, Naresh Goyal (Jet Airways) £182m; =309th, Firoz Kassam (hotels) £180m; =309th, Harpal Matharu and family (hotels) £180m; 388th, Surinder Arora and family (hotels) £140m;

402nd, Tim and Kit Kemp (hotels) £134m; 406th, David Crossland and family (Airtours and TravelJigsaw) £130m;

540th, Guy and Julia Hands (hotels) £100m;

=657th, David Allen (caravan parks) £85m; =675th, Rahul and Rita Sharma (Best at Travel) £85m; =694th, Edward Faith and family (Gullivers Travel Associates) £80m; =694th, Uzi Kattan (Gullivers Travel Associates) £80m; =694th, Norman family (Condor Ferries) £80m; =694th, Peter Stephens (Lotus Group travel and conferences) £80m;

=863rd, Dinesh Dhamija (ebookers) £65m; =924th, Kenneth Townsley (Gold Medal Travel) £60m;

=986th, Stephen Bond (aviation) £55m.
________________________________________

Etailing Grows BUT....

Emarketer is reporting studies from Forrester and Citi group that etailing is the bright spot in the current US economy. "According to a survey by Forrester Research and Shop.org, US online retail sales rose an average of 11% in the first three months of 2009."

Go here for the study outline: http://www.emarketer.com/Article.aspx?R=1007058

However there is an ominous sign in the numbers for travel. Pure etailers are performing significantly worse than hybrid players. And not just by a small statistical variation. The numbers are pretty significant.

With airlines being able to stabilize their Q1 numbers but with a radically reduced yield - this bodes ill for the pure web based OTAs.

I think we should brace ourselves for some bad Q1 numbers from the big 4.

Long term - the move to a multi-channel environment is the direction of the market. That has significant implications for how the technology and the strategy of both suppliers and intermediaries play in the market. I will say again. Emerging from the other side of the recession will be a whole different world. Species evolution!!!

Cheers

UK To Up APD Levy

Rather than abolishing the APD levy the UK is raising it to GBP3.00 per pax. In the big picture scheme of things this is not going to cause holiday makers to change their behavior. However something needs to be done about the whole process of the a guarantee. Whether this is a head tax or a percentage tax will challenge even the best mathematician.

However I believe that the APD itself is flawed and a more generalist approach should be considered. Finding a solution to the LCCs products and including them along with accommodation only providers will be a challenge.

In the end - perhaps we should just accept that it is caveat emptor.

Cheers

A Tweeter Not, Maketh A Luddite?

I am still struggling with the concept of Twitter on a broader basis. I originally thought I was alone but I have found quite a few Professors out there who share the same view. I don't think it is an age thing either.

My big concern is that we are about to be overwhelmed by the amount of digital "stuff" that will be generated.


Gerry McGovern's editorial today about adopting different writing styles for web vs. the printed form applies even more pertinently to the Twitter form.

I went through today's Sunday paper and counted the number of mentions of Twitter in the news sections of the paper. (including the ads in those sections). I was astounded when it exceeded 300. I gave up after that.

What I realized is that there is a lack of nuance. I (being me or all of us) cannot really take a subtle approach to the issue of Twittering. I have binary choice - opt in or be left out. As Professor Cloud said in a recent conversation - are we becoming a generation of people who adopt technology because we are afraid of being left behind or even worse being left out if we don't adopt said technology? This is a frightening concept to me who grew up where the notion of an Orwellian world was something to fear.

Little did we know that we would adopt the very framework of this world so easily and out children think nothing of it. We have become de-sensitized to the adoption of the technology that has to power to cause our minds to become - perhaps something we don't want to be.

Rick Evans' lyrics were ringing in my ears today. I think 2525 is going to happen a lot sooner than any of us think. In my mind's eye the world of technology gone just a tad awry as personified in Gibson's books is here and now, not the slightly ahead of now that he writes about.

No I am not a luddite. I have been a huge supporter and manager of technology, I intend remaining so - but not at any price. I do think its healthy to challenge the philosophical notion of the concept of the technology such as Twitter.

Does the balance being beneficial mean that it should be allowed?
Who makes the rules?
Should there be rules?
What is the loss? IE What are we giving up if we take on and adopt a certain technology?

I hope that we all can question technology and remember that we need to remain in control as humans. Ceding ultimate power to a machine or a technology was something I never thought possible and the stuff of science fiction. The spread and ease of adoption of Twitter has given me cause to pause and reflect whether I still believe that.

Something for everyone to consider.

Good night and Good luck.

Here are some references.

Zager and Evans Lyrics for 2525 can be found here:
http://www.metrolyrics.com/in-the-year-2525-lyrics-zager-and-evans.html

Gerry McGovern's blog and comments can be found here:
http://www.gerrymcgovern.com/nt/2009/nt-2009-04-27-traditional-writing.htm

William Gibson's blog and website is here:
http://www.williamgibsonbooks.com/

And of course in my view one of the best places to get knowledge is the library.
Take a trip - sign up and be a part of your library. It will amaze you!
For the Internet Public Library go here:
http://www.ipl.org/

Swine Flu - US Raises State of Alert

So I dont think this is a time to panic - but I do suggest that people are reminded of good practice in dealing with the outbreak of Swine Flu.

Easy ways to protect against infection
Little can be done to prevent an outbreak of flu from spreading, health experts caution, but they say common sense measures can help individuals protect themselves. Practice the following:
- Wash your hands frequently
- Cover your cough or your sneeze
- Use alcohol-based gel or foam hand sanitizers
- If you have flu-like symptoms, stay away from work or public transportation
- Social distancing. Stay away from people who might be infected

Here are some resources you might be interested in:

http://www.who.int/csr/disease/swineflu/en/index.html

http://www.cdc.gov/swineflu/

And remember - TAKE YOUR VITAMINS....

Cheers

Pet Airways Immortalized on NPR

I have written about Pet Airways before. Now news comes from Professor Stuart (he in Palo Alto although he is really Irish), that Pet Airways has achieved immortal fame by being mentioned on NPR's Show

"Wait Wait Don't Tell Me."

So just for fun - I went to look to see if Pet Airways is listed on Facebook. Wow - lots of friends there and they are quite a vocal group.

Sign up as a friend if you wish:

http://www.facebook.com/pages/Pet-Airways/36484447069

I think I am keeping my dog at home this year.

Cheers

Next CEO of Aer Lingus?

I am not a betting man. But I enjoy watching others take a flutter.

I do think its rather funny that we have people betting on the next CEO of Aer Lingus.

Go to Paddy's for the absolute latest odds:

http://www.paddypower.com/bet?action=go_type&category=SPECIALS&disp_cat_id=&ev_class_id=45&ev_type_id=11365

I think this is just a riot. Who ever is doing the handicapping needs their heads examined.




Cheers