Interview: Nihi Hotels CEO on Creating a Cult Property That’s Distinctly Luxurious

Nihi Sumba Island

James McBride, the CEO of Nihi Hotels, thinks the new luxury can be rough around the edges, and shouldn’t be intrusive. Nihi Sumba Island

Skift Take: It takes old-school hospitality expertise and new-school marketing hustle to create a cult property from scratch. Nihi Sumba Island seems to be the culmination of both, plus it has the right capital and vision.

— Colin Nagy

Colin Nagy, head of strategy at Fred & Farid, a global advertising agency, writes this opinion column for Skift on hospitality, innovation, and business travel. “On Experience” dissects customer-centric experiences and innovation across hospitality, aviation, and beyond. You can read all of his columns here.

When you canvas hospitality leaders around the world for who they look up to or where they find inspiration, hotelier James McBride is a recurring name people bring up.

He began his career in a Durban, South Africa kitchen; worked his way up through the Ritz Carlton for 14 years starting in 1988 and has a Harvard Business School case study referencing his work, and served as managing director of The Carlyle in Manhattan from 2003 to 2009.

In the latest phase of his career, McBride has partnered with investor Chris Burch to open a property called Nihi Sumba Island in Indonesia. It is around a 50-minute flight from Bali. McBride is a partner and CEO of Nihi Hotels.

The property is in a remote location and strives to offer an ecologically minded experience.  Travel+Leisure recently named Nihi Sumba the “Best Hotel in the World” and user reviews across several platforms show that it is resonating with guests. Skift caught up with McBride in New York to discuss the hotel project, staff training, Nihi’s expansion to new locations, and his thoughts on the state of modern luxury.

Skift: Can you describe your Nihi project in Sumba to someone who hasn’t heard of it?

James McBride: We started with a very different vision than most luxury resorts and have expanded on that vision: To go beyond the idea of merely a hotel or a vacation and create a feeling and introduce our guests to a way of life. Nihi is a glimpse into a bygone era, centuries of rituals, an unspoiled landscape, and unlimited freedom to explore. We want guests to feel connected and useful and to give back and feel a part of something larger than themselves. With philanthropy at the core of our business model, the Nihi legacy stands for more than just a destination. It stands for goodwill throughout the world it serves.  

Skift: You went from zero to press accolades and great consumer reviews in a short time.  Describe the marketing approach?

McBride: Our destination and the community here is unparalleled in the world. By leveraging the global relationships of Chris Burch and myself, we have a network of travelers who give us the benefit of the doubt and will go somewhere they might not otherwise without a trusted endorsement.  We exceeded expectations.  Additionally, we embraced the digital movement immediately and made our brand Instagram-savvy.  Instagram is the primary referral to our website. 

We have also been very generous to our supporters—travel agents, bloggers, booking providers, and more by inviting them to experience the uniqueness of Nihi Sumba Island.  Last and most important, our philanthropic commitment to the Sumba Foundation.  Guests want their children to learn about charitable giving and preserving cultures and communities; there is a meaningful educational component to what we do.  Guests also enjoy returning to Nihi to see how their contributions to our efforts have been deployed.  All of this combined creates and enthusiasm for and awareness of the brand. 

A Nihi treehouse villa. Nihi Sumba Island

Skift: How did you manage digital media versus old-school word of mouth?

McBride: It’s both. Word of mouth is still the most powerful marketing mechanism, and Instagram is wonderfully pictorial.  Social media is today’s word of mouth.

Skift: What is the role of local community and how does that fit in?

McBride: What has been most rewarding is being surrounded by a society that is warm and welcoming. We owe the very heart and soul of the Nihi experience to our island’s communities. We need our communities’ support, trust, and relationships to make our business possible. Local communities have also very much rallied around the Sumba Foundation. The Foundation’s efforts can only make a positive, lasting impact to the extent that the communities embrace knowledge and training, and apply best practices, systems, and protocols. They appreciate the Foundation’s balance of providing benefits while preserving cultural traditions.

Skift: How are you finding and training staff?

McBride: Our staff is 95 percent Sumbanese. Guests interact with pure, native people.  By no means are they classically trained — they serve from the heart.  We do not want a vanilla, repetitive type of customer service.  By that I mean, our employees are not reciting from a script and responding with “certainly, my pleasure.” They are engaging and real to Sumba. We’ve had to train on efficiency and execution so that they understand prompt resolution to a guest’s needs. 

Skift: How do you get the right mix of guests and not just those that want bragging rights?

McBride: Being an attractive resort destination does draw some off-brand people.  We are not a stuffy, flawless experience. We are thoughtfully rough around the edges. For the most part, we appeal to our ideal guest who is adventurous because it is not easy arriving to the forgotten island! It can be 30 hours of travel for the 50 percent of our guests who journey from North America. 

Skift: What are the plans for other properties in the near term?

McBride: We are always looking. Like Sumba Island, the location must be special and allow us to provide our signature “edge of wildness” experience. 

Skift: What was your experience running The Carlyle?

McBride: The Carlyle was a pivotal moment in my life where I met some of the most interesting people in the world.  The Carlyle is still close to my heart to this day. When I am in New York I spend a lot of time there. It is like home. I love the tradition of the place, the elements of the music between Café Carlyle and Bemelmans Bar, the simple elegance, and how it exemplifies a feeling of home away from home.  Like Sumba, it attracts very interesting and eccentric people and has employees that embody that spirit. 

These businesses are similar in that you either get them or you don’t. Creating them and leading them is the same. You either understand how to connect with the people, or you don’t. For example, the bathrooms in The Carlyle’s rooms are small, but guests don’t stay at the Carlyle for the bathrooms. They stay there because it feels like a home.

Skift: What were your most formative experiences in hospitality and when did you know it would be a life’s work?

McBride: For as long as I can remember, I wanted to be in the hotel businesses. I was fortunate to stay in beautiful hotels with my family while growing up. The people who fail in this business usually fail because they don’t realize it is a permanent commitment, seven days a week, working hard. My first hotel job was in the kitchen of a Durban hotel in my native South Africa. I loved it and the experience added to my drive to be successful.  I joined The Ritz Carlton in 1988 in its infancy and basically grew up in the business there.  From there, my career just took on a life of its own.

Skift: How is luxury changing?

McBride: Luxury means something different to everyone. Nihi Sumba Island is not a white-glove-service-and-polished-silver destination. You can bathe from your private terrace outdoors. You can indulge in unlimited spa treatments in a clifftop bale. You can practice yoga on a rock cantilevered over rice paddy fields as far as you can see. You can have lunch in the cool mist of a majestic waterfall. At Nihi, luxury is defined by the experiences we create individually for our guests.

Skift: What are the characteristics of your ideal city hotel? 

McBride: For me, it is about connecting with your guests with the softest comforts, a connection that it is your home, not just a place to sleep. In cities, people are looking for tranquility, and not to be bothered. Details matter, like the availability to leave one’s clothes there between trips, quiet rooms, not closing the window treatments during turndown if there is a beautiful water or park view.  Knowing how much or how little to interact with guests.  Everyone over-complicates everything when our business is very simple. 

It’s about making people feel warm, happy, and safe, letting them recharge so that they can go about their lives which are usually stressful and filled with issues — the last thing guests want to have to deal with is the minutia. I’m still shocked when I am in a hotel room that has classical music playing from a clock radio after turndown at night. I can never find the switch to turn it off. Hotels must evaluate old past practices to see if they make sense today. Most people don’t want a fruit bowl.

Skift: What is missing in the hospitality market at any level of the pricing?

McBride: An abundance of power outlets in convenient places to charge anything. Also, I have not seen it executed properly, but a service where your luggage is transported from the airport to your hotel room — you do not have to wait for it or see it until you arrive in your room.

Skift: What is inspiring you in other areas of travel: brands, airlines, or experiences?

McBride: I love what Swire is doing with their Houses, especially Upper House where it is all about the programming and the thoughtful engagement of people. The product is so great you almost don’t even notice there is no spa and a smaller gym. It exemplifies hospitality and really makes you feel at home. But they need more power outlets. You have to bring an extension cord with five plugs.

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Merging Premium and Mainstream — New Luxury

MSC Cruises

A butler onboard MSC Cruises’ Yacht Club. Cruise lines have developed luxury enclaves onboard mainstream ships. MSC Cruises

Skift Take: A growing number of mainstream cruise lines think they can capture luxury travelers by offering them a premium product. The approach makes sense. After all, not every luxury cruiser wants the intimacy and exclusivity of a small ship.

— Patrick Whyte

The Skift New Luxury newsletter is our weekly newsletter focused on the business of selling luxury travel, the people and companies creating and selling experiences, emerging trends, and the changing consumer habits around the sector.

There used to be a very clear dividing line between luxury travel and the rest, but in recent times it has started to blur.

Take cruise ships, for example. In the past you had luxury lines and mainstream lines. Now the likes of Norwegian Cruise Line and MSC Cruises think they can woo high-end travelers by offering a smaller slice of luxury onboard.

These enclaves are now big business, partly because cruisers’ demands have evolved. Younger clientele might find some luxury ships a bit boring or they may want to bring their children along.

As we’ve been saying for a while now, the rules of luxury travel have changed.

— Patrick Whyte, Europe Editor

Five Looks at Luxury

The Rise of Luxury Outposts on Mainstream Cruise Ships: Will a traveler who only expects the finest ever decide to board a mass-market cruise ship? Well, the marketplace has spoken and it says, “Maybe, but only under certain conditions.”

Luxury Is Evolving But Consistent Themes Connect Old and New: This evolution of luxury will impact luxury brands and marketers and require them to adapt products, experiences, and communication to align with consumers’ new definitions of quality, comfort and elegance.

Blackstone Is Paying $1.1 Billion to Buy Maui’s Grand Wailea Resort: Blackstone, which still owns Hilton shares, has a penchant for making big hotel real estate deals involving the Waldorf-Astoria brand, doesn’t it?

Newest Luxury Hotels in Milan Showcase the City’s Ties to Fashion: A city synonymous with high fashion deserves luxury hotels that are equally, if not more, stylish and experiential, and smart hoteliers are beginning to deliver.

Delta Finds Passengers Paying for Upgrades With Their Own Money Is Big Business: You don’t expect corporate travelers to dip into their own pockets on business trips. But certain travelers love to fly in premium cabins, and that’s good news for Delta’s revenues, which were already strong.

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Skift Europe Editor Patrick Whyte [pw@skift.com] curates the New Luxury newsletter. Skift emails the newsletter every Tuesday.

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The Megatrends Defining Travel in 2018

Skift

Skift Megatrends 2018 is available for download now. Skift

Skift Take: From brands as experience platforms to strategic mergers, diversity messaging and beyond: These are the Megatrends in travel we’re watching closely in 2018.

— Hannah Sampson

Tuesday night, we released our annual travel industry trends forecast, Skift Megatrends 2018. You can read about each of the trends on Skift, or download a copy of our magazine here.

Every year, the Skift reporting team gathers to discuss the big-picture themes emerging in travel. Out of those conversations — informed by our intensive daily coverage, long-term research, and many hundreds of hours talking to leaders and operators in the travel industry — comes this magazine.

The Megatrends Defining Travel in 2018 represent our largest annual editorial effort, and this year’s version is our most comprehensive yet. With a new regional spotlight and a fresh focus on restaurants, the 2018 Megatrends draw on our deep expertise in the sectors we cover, and deliver an authoritative forecast for the coming year.

These are the 19 Megatrends this magazine expands on:

  • Travel Brands Want to Be Experience Platforms
  • Brands Embrace Diversity and Inclusion Message Amid Rising Neo-Nationalism
  • Travel Mergers and Acquisitions Become More Focused on Strategic Innovation
  • The Hotel of the Future Needs to Be Everything to Everyone
  • Personal Fulfillment Is the New Ultimate Luxury
  • Blockchain Will Spark a New Type of Technology Race in Travel
  • European Travelers Return to Once-Disrupted Destinations
  • Airlines Race to Become Storefronts Beyond the Seat
  • New Leaders of Online Travel Agencies Are Already Reshaping Their Companies
  • Cities Are Better Navigating the Collision of Their Visitor and Local Economies
  • Extreme Weather Is Creating Travel Upheaval
  • Startups Go Direct to Consumers in Battle for Business Travelers
  • Google’s Product-Led Vision Is Bearing Fruit
  • Back-End Travel Tech Gets a Design Renaissance
  • Africa Discovers It Needs to Woo Millennials Both at Home and Abroad
  • Ctrip Branches Out But Many Chinese Travel Companies Will Be Domestically Focused
  • Asian Upscale Travelers Are Creating a Luxury Tipping Point
  • Latin America Will Take Nation Branding to New Extremes
  • Next-Generation Restaurants Fight the Delivery Boom With Immersive Experiences

Download Your Copy of Skift Megatrends 2018

This year’s Megatrends are sponsored by our partners at AccorHotels, Allianz Worldwide Partners, Hilton Garden Inn, Intrepid Travel, onefinestay, and Upside.

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U.S. Travel Coalition Enlists Restaurants and Retailers to Reverse Trump’s Isolationist Stance

Bill Holmes  / Flickr

The travel industry hopes a new coalition will help it break through to President Trump. Pictured are tourists walking the National Mall in Washington, D.C. on November 10, 2006. Bill Holmes / Flickr

Skift Take: If the travel industry’s lobbying and trade associations have any more tricks up their sleeves, they’ll need them if they will have any chance of reversing what is essentially the Trump Administration’s anti-visitor stance.

— Dan Peltier

Invoking the safety in numbers theory, the U.S. Travel Association officially launched its Visit U.S. Coalition on Tuesday with a plea to the Trump Administration to work with the U.S. travel industry to advance its agenda.

The coalition, which initially includes nine members, including the American Gaming Association, the National Restaurant Association, and the National Retail Federation, is a Washington, D.C.-based group aimed at working with the White House and Congress to balance the anti-immigrant, anti-foreigner rhetoric coming from President Donald Trump with a welcoming message for international travelers.

Many U.S. travel brands had feared that the travel ban and other controversial remarks by the president would lead to a decline in international visitors. Some of the United States’ most important visitor markets, such as Mexico, the UK, Brazil, and China, all had drop-offs in arrivals at least through July 2017, the most recent month that international arrivals data are available.

U.S. Travel CEO Roger Dow, speaking during a press call about the coalition on Tuesday, said he’s seen evidence that China, already the largest overseas market in some U.S. cities, is losing interest in the U.S.

“We’re hearing there’s a larger percentage turn down of people coming from China on the meetings side with people coming from trade shows,” he said. “Twenty years ago the U.S. owned the trade show business and we had all these great convention centers, but not anymore. Other countries have caught up.”

U.S. Travel’s data show that the U.S. share of international tourism has been decreasing since 2015, from 13.6 percent to 11.9 percent in 2017. The decline cost U.S. destinations an estimated 7.4 million international visitors and $32.2 billion in tourism spending. Dow noted that the visitor drop started under the Obama Administration but that it’s become the Trump Administration’s responsibility to reverse it.

But Dow contended that the factors working against international tourism to the U.S., such as anti-foreigner rhetoric or the strength of the dollar, can be overcome. “Our president isn’t popular in Canada, but Canada still did well last year,” he said.

“The Canadian dollar is one of the exceptions that did well against our strong dollar,” said Dow. “We’re seeking to pull all these organizations together like State and Homeland Security and get them to share the same message that the U.S. is closed to terrorism but open to business.”

Currencies in Canada, Mexico, India and South Korea, for instance, are all doing better against the U.S. dollar in January 2018 than they were a year ago. All represent important visitor markets for the U.S.

In other words, blaming the strong dollar for visitor declines isn’t the total answer.”The constant lack of a welcoming message has had its effect and I think it’s very doable to turn around,” said Dow. “Those currencies are improving and we need to get our share. We’re not getting our piece of this. There’s no single cause and no single solution.”

Dow and other executives on the call said the coalition will tackle priorities such as pushing for adding staff to visa processing centers to reduce visa wait times. U.S. Travel has met with U.S. Secretary of State Rex Tillerson, Secretary of Transportation Elaine Chao and Secretary of Commerce Wilbur Ross on several occasions during the past year.

But these officials have little leverage against a wildcard Presidents whose ideas and policies shift moment to moment.

Brand USA, the U.S. tourism industry’s marketing arm, is not part of the coalition because its charter prevents it from lobbying.  Brand USA will instead “cheer us on from the sidelines,” Dow said.

Will a Coalition Be Effective?

It was only a decade ago that the U.S. travel industry was still recovering from the 9/11 attacks, and was engaged in beefing up security checkpoints at airports, for example.

The U.S. wasn’t thought of as the most welcoming place to visit, but the tide quickly turned, and the country went from having a little more than 50 million international arrivals in 2009 to more than 77 million in 2016. In 2011, Congress passed the Travel Promotion Act, which established Brand USA.

The political climate has significantly evolved as President has used platforms like Twitter to defy norms, and spread his anti-foreigner and anti-immigration message.

That net-isolationist message has had an adverse impact on inbound travel. Victor Pizarro, CEO of Berry Whale, a Dominican Republic-based agency that helps Latin American travel brands with their international brand recognition and reputation, said, “That’s why many Latin Americans are limiting their travel to the U.S.”

“When a tourist is sold an idea of a place, to isolate everything else, you don’t pay attention to elections they have going on in Paris, for instance,” said Pizarro. “You’re more interested in seeing the Eiffel Tower. But you have to make sure the tourism outshines the politics.”

On the new coalition, Pizarro said he feels its a step in the right direction, adding that it should incorporate travel organizations from different regions such as Latin America to bring in a global perspective.

Vince Wolfington, a former chairman of the World Travel & Tourism Council and founder and chairman of Entrepreneurial Enterprises, said that many travelers didn’t take the opportunity to visit the U.S. a decade ago because of the Iraq War and other Bush Administration policies.

Wolfington was also key in working with the Bush White House to help them understand the significance of the travel industry and its economic impact. “We were faced with the same kinds of things that U.S. Travel is faced with today,” he said. “We were able to bring the WTTC Global Summit to D.C. in 2006 and that was important. We got [former Secretary of State] Condoleeza Rice to give a speech that resonated with the Administration and that was key.”

Some argue that recent history shows that reversing the visitor decline to the U.S. is achievable. The big question that remains is whether the White House and Republican-controlled Congress is willing to break from its current net-isolationist stance.

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HNA Debt Crisis Hits Its Hong Kong Unit After Acquisition Blitz

Prudence Ho  / Bloomberg

HNA’s debt crisis has extended to Hong Kong. Pictured is the HNA Group building in Beijing. Prudence Ho / Bloomberg

Skift Take: It’s been a tumultuous start to 2018 for HNA, which has invested billions of dollars in overseas hospitality and travel other companies in recent years. The group is showing signs of weakness as it gets pressured by the Chinese government, considers selling various stakes, and asks for loan extensions.

— Dan Peltier

A unit of HNA Group Co. sought more time to complete the arrangement of a second bridge loan it took to finance a luxury real-estate development in Hong Kong as the Chinese conglomerate juggles its borrowings following a debt-fueled acquisition spree.

Hong Kong International Investment Group Co. needs “extra time” and the loan has been extended for six months through July 15, it said in an emailed statement on Monday.

This is the second time that HNA, which has spent tens of billions of dollars in acquisitions in recent years, protracted a debt arrangement for the real estate project in the former Kai Tak airport, where residential apartments are scheduled to go on sale in the third quarter of 2019. Of the four bridge loans taken out for the development, one was already extended by three months till Feb. 23.

Read More About HNA

What Lies Ahead for Hilton and Its Newest Big Investor, HNA
HNA Group Must Answer Questions About Collapse of Its Booking Startup Travana
Chinese Travel Conglomerate HNA Group Now Wants to Buy a Major Cruise Line
Carlson Hotels Bought by China’s HNA Tourism Group for Undisclosed Sum

“We have planned meticulously on all aspects of the development and funding of the project, and the company has a good relationship with the bankers,” according to the statement. “We can speak with confidence that we have secured sufficient capital to support the development of this project and the project will proceed smoothly as planned.”

HNA, which spent $3.5 billion on land purchase in the city, has two other loans related to Kai Tak coming due in February and June, people familiar with the matter said earlier. Some units missed payments due to several Chinese banks in recent weeks, prompting three lenders to freeze some of the borrowers’ unused credit lines, people with knowledge of the matter said this month.

Separately, HNA’s Tianjin Tianhai Investment Co. said Monday that it will disclose details of an asset restructuring before Feb. 15 and that its stock will remain halted from trading. Shares of the group’s flagship Hainan Airlines Holding Co. have also been suspended, pending the announcement of a possible “major assets restructuring.”

This article was written by Prudence Ho from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Orange Beach Adds Vacation Rental Ordinance Discussion to Tonight’s Meeting Agenda

According to Jennifer Foutch, Government Affairs Director at the Baldwin County Association of Realtors, the proposed ordinance for vacation rentals was added to tonight’s city council work session agenda for comment. Here is the ordinance: OB enforcement ordinance Proposed in the ordinance is a vacation rental license increase to $1000, posting of the license inside the rental, […]

The post Orange Beach Adds Vacation Rental Ordinance Discussion to Tonight’s Meeting Agenda appeared first on VRM Intel.

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Frontier Airlines Will Codeshare With Mexico’s Volaris in a Unique Arrangement

Alan Wilson  / Flickr

Volaris, a Mexican discount airline, will codeshare with Frontier Airlines. Pictured is a Volaris Airbus A320 at Los Angeles International Airport. Alan Wilson / Flickr

Skift Take: Passengers should cheer news that Volaris and Frontier will codeshare, as it should help Americans visit many more Mexican destinations at cheap prices. But will Volaris and Frontier cooperate enough to make the process seamless for passengers? We’ll soon find out.

— Brian Sumers

U.S. discounter Frontier Airlines plans to codeshare with Volaris, a Mexican airline with a similar no-frills model that seeks to coax travelers off buses and onto planes, in what the carriers say is the first codeshare agreement between two ultra-low-cost carriers.

Under the proposed agreement, the airlines will sell tickets on each other as soon as this spring. That will make it possible for a customer to fly from Mexico City to San Antonio on Volaris, and catch a Frontier segment from San Antonio to Atlanta, for example.

If the deal is approved by regulators, as expected, Volaris estimates its passengers will be able to reach 20 more U.S. cities than they can today.

Frontier customers, meanwhile, will gain access to many of Volaris’ 40 destinations in Mexico. Today, Frontier only flies to three cities in Mexico —Cancun, Los Cabos and Puerto Vallarta.

Larger global airlines, including as United Airlines, American Airlines and Delta Air Lines, often codeshare with foreign carriers, allowing their customers to reach destinations where they do not fly. But low-cost, and ultra-low cost airlines generally have not sought such agreements, calculating that the costs do not outweigh benefits from the added revenue these agreements produce.

‘Costly and Complex’

That is beginning to change, however. In the past couple of years, more low-cost and ultra-low-cost airlines have begun cooperating with other carriers, though few have gone so far as to codeshare with other airlines. Last year, EasyJet created what it calls Worldwide by EasyJet, a program that makes it easier for customers flying WestJet, a Canadian low-cost airline, and Norwegian Air, to connect to EasyJet flights.

But EasyJet’s program is not a traditional codeshare, and it puts more onus on customers to make sure the connections work, requiring them to book at least a 2 hour and 30 minute connection, far more time than is typical for codeshare agreements. In a release outlining its plans, EasyJet criticized traditional codeshare agreements as “costly and complex.”

Indeed, airlines must clear considerable logistical hurdles to make codeshares work. First, carriers must ensure their reservations systems can correspond with each other, permitting them to share customers. Second, airlines must make sure they can accept and transfer each other’s baggage, so crews in San Antonio can efficiently transfer bags from Volaris to Frontier. Third, the airlines must take care of each other’s passengers when flights are delayed or canceled.

Many discount carriers don’t like to sell connecting itineraries at all — even when both flights are on their airline — because they worry costs will creep up as passengers miss connections, and they’ll need to accommodate them on another airline or at hotels. Frontier generally prefers selling non-stop flights, though recently it expanded the number of connections its customers can make. 

Still, Volaris and Frontier are closer than most airlines, as Frontier’s majority owner, Indigo Partners, also owns a substantial portion of Volaris, a publicly traded company. Late last year, Indigo negotiated with Airbus for a massive 430-aircraft order to send new planes not only to Volaris and Frontier, but also to two other discount airlines affiliated with Indigo.

This is not the first time Volaris has sought a codeshare agreement with a U.S. airline. In 2008, Southwest said it intended to codeshare with Volaris within two years. But the airlines never created a seamless ticketing process. Instead, they briefly allowed customers to essentially combine two tickets — one on Southwest and one on Volaris. By 2013, the airlines stopped cooperating.

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Why Travel Agents Should Rethink the Sharing Economy in Luxury Hospitality

Skift Take: The sharing economy has typically been connected with budget or mid-range travelers looking for a deal along with a unique experience. But in recent years, luxury services have moved into the space, offering new opportunities for travel agents working with the most discerning travelers.

— Dawn Rzeznikiewicz

The sharing economy has always been associated with a flexible, self-service style of travel, from young discount-seekers crashing in spare bedrooms to mid-market urban explorers discovering the quirks of other people’s kitchens. But as the sharing economy matures, it’s finally catching up with luxury travelers who expect all-encompassing, guest-centric experiences.

For travel agents, this is an exciting opportunity, as companies and services in the space are providing curated, intensely vetted properties, as well as personalized, best-in-class customer and support services. Agents can partner with these providers to construct personalized vacations that satisfy the needs and expectations of high-end travelers.

Luxury Experiences for the Discerning Individual and the High-End Group

While a traditional sharing economy traveler looking to splurge on a once-in-a-lifetime getaway may be content to book a “villa stay with personal chef and butler services” on their own, high-end travelers with exacting expectations will be more likely to turn to a travel agent who can ensure that the villa is well-maintained and meets their privacy requirements, the cook makes excellent food, and the butler speaks their language.
This type of traveler is not just looking for a beautiful property with a few extras, but a full-surround, elevated travel experience. They expect to work with agents who understand their perspectives and will provide personalized service and offerings throughout the booking process and the vacation.

“Authenticity matters to them” says Amr Younes, vice president of revenue optimization at Luxury Retreats. “They want their experience to be unique, individualized, and different from other trips.” This intensive curation can create trips of a much higher quality than a straightforward stay on a high-end property, bringing about a true luxury travel experience.

The growing availability of curated luxury rentals via the sharing economy also offers new options to groups who may find economy and appeal in larger-scale accommodations such as villas and castles. Travelers drawn to these types of unusual luxury accommodations are unique globetrotters on the lookout for experiences that go beyond the typical glossy travel brochure, and travel agents would be savvy to take note.

A castle or villa may be an ideal site for a family reunion, small corporate retreat, or friend-group getaway. Noteworthy, beautiful, spacious, and accommodating, these options can be paired with services on par with five-star hotels. And when rented for a group, they can be even more economical per person per night than a high-end, or even mid-range, hotel.
While some planners of such group events may want to book rentals themselves, others will realize that working with a professional travel agent can help them create the most effective package for the occasion. Agents, often in collaboration with personal concierge teams, can help planners discern which location, type of accommodation, and services will be the best fit for the group’s needs, how to best arrange for group transport to out-of-the-way countryside locations, and whether to add on excursions or cultural experiences.

Luxury Rentals for Elevated Experiences

The types of enhanced experiences high-end travelers now look for go beyond the quality and style of the accommodations involved, though those accommodations will always be central to such curated vacations. All other elements of the trip start with and emanate from a basis of exceptional lodgings, and expand into travelers exploring the world with the people who matter to them most.

Sharing economy companies that are engaging with the high-end market focus on providing fully vetted, secure, and distinctive properties to satisfy these needs. At Luxury Retreats, for example, fewer than five percent of applicant properties are accepted to the site after a 240-point inspection. Once the homes are listed, they’re regularly re-inspected to ensure high levels of quality, security, and cleanliness.

Particularly fitting for the luxury sharing economy market are rentals of magisterial, historic, and unique properties that can provide travelers with unique, authentic getaways. Villas, castles, country estates, and upscale condominiums are solid options for this segment and increasingly available through sharing economy platforms and service providers.

Additionally, even more unusual properties in destinations around the world are increasingly enticing to high-end travelers who want something as unique as it is luxurious, especially in the age of social media where the most extraordinary experiences serve as social currency. The options are creative and diverse, ranging from cliffside Hawaiian villas surrounded by rainforests and waterfalls to luxury ski lodges to coastal Mediterranean estates overlooking on vineyards and orchards.

Luxury properties make up a small portion of sharing economy offerings, and many travelers will opt to book such accommodations on their own. But there’s a strong and growing segment of the travel market comprised of agents skilled at leveraging these resources for high-end travelers and groups. Those who take advantage of the opportunity will be at the leading edge of luxury travel.

To learn more about how travel agents can take advantage of the sharing economy in luxury hospitality space, visit Luxury Retreats.

This content was created collaboratively by Luxury Retreats and Skift’s branded content studio SkiftX.

Ryan Wolkov

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Amsterdam’s Schiphol Airport Is Growing Faster Than Its Big European Rivals

Schipol

Schipol airport. The airport is adding a third terminal in 2023. Schipol

Skift Take: Schipol is turning the screw on other airports in Europe. It seems inevitable that London’s Heathrow will eventually lose its top spot unless authorities build a third runway.

— Patrick Whyte

Amsterdam’s Schiphol airport added 4.8 million passengers last year with the help of a six-runway setup that’s unique in Europe, putting it almost level with Paris Charles de Gaulle as the region’s second-busiest hub.

Schiphol, home base to KLM, attracted 68.4 million travelers, consolidating its lead over Frankfurt and putting it within 1 million of the total at Charles de Gaulle, which is the headquarters of the Dutch carrier’s parent Air France.

London Heathrow remained Europe’s leading airport despite the constraints of only two runways as airlines turned to bigger planes to boost capacity. The U.K. hub isn’t due to get a third strip until 2025 at least.

Amsterdam lifted passenger numbers 7.7 percent in the 12 months, the most among Europe’s top bases, following 9.1 percent growth in 2016. That’s contributed 10.2 million more travelers in just two years, the equivalent of adding an entire airport such as Glasgow’s main hub.

Schiphol led a surge in passenger numbers across European airports. Charles de Gaulle itself posted a 5.6 percent gain after a flat 2016 as tourist visits to France rebounded from a string of terror attacks, while Frankfurt’s 6.1 percent growth rate, the fastest in six years, was helped by labor peace at Deutsche Lufthansa AG and incentives that brought Ryanair Holdings Plc to the airport.

While Schiphol plans to open a third terminal in 2023, when Frankfurt will also add a new building, its advance could be stymied by a cap on flights at 500,000 a year aimed at curbing noise and pollution. The Dutch hub had almost 497,000 plane movements in 2017, 22,000 more than at Heathrow, aided not only by its multiple runways but the ability to operate 24 hours a day — a freedom many of its European rivals are denied.

Istanbul’s Ataturk hub rebounded from a passenger decline that followed a foiled coup in Turkey in 2016, though it will close once the city’s new airport, slated to open in October, is able to handle sufficient traffic. The replacement hub will start with two runways but has plans for six.

 

©2018 Bloomberg L.P.

This article was written by Richard Weiss from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Stockholm Has Too Many Hotel Rooms

Mikael Sjoberg  / Bloomberg

The Old Town section of Stockholm. The city’s recent influx of new hotel supply is leading to lower hotel room rates and lower stock prices for the country’s biggest hotel companies. Mikael Sjoberg / Bloomberg

Skift Take: Now seems like a great time to score a deal on a hotel room in Stockholm. Its current situation demonstrates the careful balance required between supply and demand in the hotel business.

— Deanna Ting

It’s not just Stockholm’s housing market that is feeling the weight of a surge in supply. Profitability among hotels is also under pressure as demand fails to fill a raft of new rooms in the Swedish capital.

That prompted Scandic Hotels AB, the Nordic region’s largest hotel chain, to warn on Tuesday that adjusted fourth-quarter earnings before interest, taxes, depreciation and amortization would drop from a year earlier, mainly due to a decline in earnings at its Swedish operations. Scandic, as well as peers Pandox AB and Rezidor AB, slumped in Stockholm trading.

“The decline in earnings is primarily attributable to operations in Stockholm, where the market was weak in the quarter, and costs were not fully adjusted in line with the weaker like-for-like sales development,” Scandic said.

While the number of hotel stays in Greater Stockholm rose in October and November from a year earlier, the addition of new hotels meant that the occupancy rate fell to 68.2 percent in November 2017 from 68.5 percent a year earlier. In October, it dropped to 68.5 percent from 70.7 percent a year earlier.

“Swedish performance has been particularly weak in Stockholm due to high supply growth and a slowdown in demand,” Morgan Stanley said in a note after the profit warning from Scandic, a stock it rates underweight.

The number of available beds in the Greater Stockholm area jumped 5.9 percent from a year earlier to 70,571 in November, and is up some 16 percent in the past five years, according to data from Statistics Sweden. New hotels that recently opened include Nordic Choice Hotels’ At Six and its sister hotel Hobo as well as Scandic’s Downtown Camper.

Pandox, whose hotel-property portfolio consists of 143 hotels in 15 countries, declined to comment on the Stockholm market as it’s in a so-called silent period before fourth-quarter results on Feb. 15.

Instead, it referred to its third-quarter report, in which it said that while the Nordic countries continued to benefit from a good economic trend in that period, the inflow of new hotel capacity in Stockholm “had a dampening effect” on revenue per available room, which decreased by 3 percent. Although underlying demand remained good in the third quarter, “it was unable to compensate in full for the increase in capacity,” Pandox said then.

Rezidor said in its third-quarter report that like-for-like RevPAR declined 4.2 percent in Sweden in that period, “negatively impacted by renovations and softening of demand” in Stockholm and Malmo. The company plans to report earnings for the fourth quarter on Feb. 21.

Scandic tumbled as much as 20 percent by 12:58 p.m. in Stockholm Tuesday. Rezidor dropped as much as 4 percent and Pandox 9.8 percent.

The abundance of hotel rooms bears similarities with Sweden’s residential market, where an increase of new homes has pushed supply beyond demand, prompting prices to fall the most since 2008.

©2018 Bloomberg L.P. This article was written by Hanna Hoikkala and Niklas Magnusson from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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