The Ecosystems Around the Wealthy’s Third and Fourth Luxury Vacation Homes

Airbnb

A home in a residential area of Miami rented on Airbnb. Miami is a popular market for multiple homeownership. Airbnb

Skift Take: Multiple homeowners are a growing segment of the luxury travel market, so learning to speak and appeal directly to their unique desires is a necessity for any luxury travel provider.

— Samantha Shankman

There is a shadow hospitality infrastructure outside of the traditional hospitality sector that powers luxury consumers’ third or even fourth homes. It includes personal staffing agencies, smart home devices, private transportation providers, developers investing in spec homes, and, of course, the economies where these home are located.

Although U.S. homeownership rates in 2016 dropped to the lowest — 62.9 percent — since 1965, many of these homeowners own more than one home.

Nearly one in five homeowners, or 18 percent, own an additional property beyond their primary residence, according to research from digital real estate database Zillow. This is comprised of investment properties and vacation homes, and nearly half of those with a second home rent them out.

“Most of these homes are an investment as well as a form of pleasure,” explains Leonard Steinberg, President of Compass, a technology-driven real estate platform.

Personal enjoyment and potential to increase capital are the two driving factors for purchasing additional homes, echoes Douglas Elliman’s 2017 Wealth Report.

“Ultra-high-net worth individuals are investing in safe markets such as the United States and purchasing multiple homes that offer a different climate and environment. This includes the beach in markets like the Hamptons, Malibu, Miami, and Palm Beach; ski resort towns such as Aspen and Snowmass; pied-a-terres in Manhattan for non-residents who are constantly traveling,” explains Scott Durkin, COO of Douglas Elliman.

The median home purchased today in the U.S. is a three-bedroom, 2.2-bathroom, single-family home for a median price of $222,000, according to Zillow. But fourth-home owners are not the median and their expenses go far beyond.

For example, the average price for purchases throughout the Hamptons was $2.38 million for the fourth quarter of 2016, up 16 percent from a year earlier, according to Douglas Elliman. Of the 613 total sales, 62 were for properties priced at $5 million or more.

“Buying a home is one thing, but maintaining a home is a whole other thing. Real estate taxes, lawns, repairs, staffing. It becomes a much bigger commitment,” says Steinberg, highlighting the many costs that come along with multiple homeownership.

When Home Is a Business

Staff consist of one of the biggest costs of a owning multiple homes, with many homeowners turning to agencies or individuals to manage their staff and coordinate everything from freshly cut lawns to stocked fridges.

“There are wealthier clients of mine that pay an estate manager to coordinate the multiple homes and that involves staffing. If you have eight on staff, that requires management. They’ll contract that to a company or they have a full-time house manager who makes arrangements. It’s a pretty massive infrastructure,” says Steinberg.

There are dozens of local personal staffing agencies in every city and other agencies such as Quintessentially People, which has six offices across Europe and the U.S. Staff can be paid upwards of $100,000 annually for taking care of often vacant homes.

“Personal staff will be hired to coordinate the individual, the family, the estates, the grounds of the estates, automobile maintenance, yacht maintenance, equestrian facilities, and more,” explains Durkin.

Tech’s New Tools

Technology, however, is in some cases being used to replace full-time staff members.

The size of the smart home market is varied with reports ranging from $14.6 billion to more than $47 billion today and growth projected up to $121.7 billion by 2022 in the U.S.

Home automation and security are the fastest growing segments.

“High-technology security is necessary in each home to protect luxury goods and assets while the home is vacant,” says Durkin.

There are indoor and outdoor security cameras from Nest, smart thermostats that control the temperature of a home remotely from Ecobee3, robot vacuums from Neato that can be turned on with an app and remote sprinkler controls from Rachio. Although this technology does not come cheaply, it does cut costs on personal staff and gives multiple homeowners more control over their properties no matter where they are.

“Technology is very meaningful as it helps you remotely control the home, especially in place of a full-time staff,” says Steinberg.

Technology has also played a role in creating a more global workforce in which people are working no matter where they are or traveling more often for work. Executives living between multiple cities find it a better investment to buy a home rather than rent when traveling for work, or if traveling often with their family between destinations.

“If you look at the price of six bedrooms at hotel, then the price of owning a home is less in comparison. The wealthy know that the home ownership over the long run is a wise place to park capital,” says Steinberg.

Who Is Buying Where

Overall urban areas are the most popular for multiple homeownership with the most growth occurring in the usual suspects of Los Angeles, Miami, New York, and Paris. Urban destinations are popular because they offer both business and culture, but they are also the safest investment in terms of value.

“The greatest growth markets for multiple homeowners in the United States includes South Florida and New York,” according to Dunkin.

Douglas Elliman’s 2017 Wealth Report predicts that U.S. cities will benefit from increased property investment on the back strong economic growth. Investors and the new wealthy increasingly want to move money to safe markets such as the U.S., leading to the purchase of multiple homes.

The value of a city-based luxury home increased by 2.4 percent on average last year while a ski home by comparison saw 1.9-percent growth and a beach or coastal property slipped marginally by 0.5 percent, according to the report.

Steinberg notes that the Chinese are particularly bullish on urban homeownership.

Almost a third, or 32 percent, of China’s ultra-high-net-worth individuals will invest in offshore real estate in the next two years, reports Douglas Elliman. Chinese investment in U.S. residential property has risen from barely $300 million in 2006 to over $30 billion in 2015 and now accounts for nearly one in every five foreign purchases.

“The world’s wealthy are a footloose group, and the place they call home is only a starting point when trying to unravel the locations that most resonate with them,” summarizes the report, but it’s not just the Chinese who are buying overseas.

Ultra-high-net-worth individuals from Saudi Arabia, Taiwan and Malaysia own an average of four homes and individuals from UAE, India, Russia and even Italy own an average of three.

On average, 30 percent Douglas Elliman’s ultra-high-net-worth individuals expect to buy a third or fourth property, all which suggests that the market for third and fourth home ownership will continue to grow as the wealthy demographics in these countries grow.

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Airlines Say They’ll Try Harder to Do Better — Skift Business Traveler

Spirit Airlines

Interior of a Spirit Airlines plane. The airline’s CEO recently stated that the carrier had room to improve. Spirit Airlines

Skift Take: Paying employees more, apologizing for a poor product: This is the season for resetting passenger expectations at airlines.

— Grant Martin

What to Know Now

We are impressed that we just made it through a weekend without some social media-fueled airline outrage. From dragged passengers to weaponized strollers to dead giant rabbits, it’s been an interesting few weeks.

But last week ended on two notes that, while they may have been informed by the outrages, weren’t about PR-friendly responses to problems. The first was American Airlines’ move to give some of its employees raises outside of the normal labor negotiation period. CEO Doug Parker told investors and analysts that the move “might surprise and even dismay some of you because it adds costs to our airline,” but employees, and the passengers who will encounter much better compensated employees, will be happy.

Over at Spirit, CEO Bob Fornaro admitted that his airline has long been synonymous with both cheap airfares and a totally crap passenger experience. He promised on his company’s first quarter earnings call that “friendly service” is coming soon.

We’ll believe it when we see it. Actually, someone will have to tell us about it because we try to avoid Spirit at all costs.

Social Quote of the Day

15-hour flight. No recline & next to the toilet. Booked months ago. For this, we pay our corporate travel agent a $75 booking fee.

@mccoubr | Canuck geek dad. Public intellectual/idiot. Freelance h0t taeks CAD5 /column-inch

AIRLINES

Alaska Air Focuses on Customer Experience and Loyalty as it Integrates Virgin America: It’s good to see Alaska still placing a major emphasis on customer satisfaction after its Virgin America acquisition. Read more at Skift

Flyers Shouldn’t Expect $10,000 When Bumped From a United Airlines Flight: If you’re suddenly hatching schemes to snare ten large by purchasing a ticket on a peak Monday morning or Friday night flight, you may want to hold off. There is no “$10,000 jackpot” at the airport waiting to be hit. Not really. Read more at Skift

United Ends Cooperation Agreements With 5 Middle East Airlines: United Airlines is canceling basic cooperation agreements with five Middle East airlines, including Qatar Airways and Emirates Airline, as the Chicago-based carrier continues to complain that the largest airlines in the region compete unfairly by taking massive government subsidies. Read more at Skift

Freddie Awards Pick the Year’s Best Traveler Loyalty Programs: In the poll, 4.2 million frequent travelers worldwide ranked loyalty programs. The poll comes just as a few U.S. major airlines have overhauled their frequent flyer rewards. We were curious at the results: Would the move from a miles-flown to a revenue-based model make the legacy players less popular. The short answer, it turns out, is no. Read more at Skift

Airports

The Paparazzi-Proof Airline Terminal: The new Private Suite at LAX offers a high-end, backdoor way for VIP travelers to get onto and off of commercial flights. Read more at The Wall Street Journal

The 5 Most Ridiculous Items Passengers Wanted to Carry On in April: Every week, the TSA blogs about items (mostly weapons) that agents have confiscated at airports around the country, and the agency posts some of the crazier ones on its Instagram page. Read more at The Points Guy

Tech

Lyft Is Beating Its Financial Goals But Faces Long Road to Profitability: Lyft Inc.’s bookings and ridership surged in the first quarter, suggesting the company benefited from user defections and management turmoil at larger rival Uber Technologies Inc. Read more at Skift

Emirates CEO Still Perplexed at U.S. Laptop Ban: The chairman and CEO of Dubai’s long-haul carrier Emirates said Tuesday he “can’t dig into somebody’s mind” to understand why the U.S. instituted a ban on laptops and other personal electronics in carry-on luggage from 10 cities in Muslim-majority countries. Read more at Skift

Amadeus Tests Virtual Reality as a Travel Booking Option: Navitaire, a reservation system for low-cost carriers that travel technology giant Amadeus acquired in 2015, is debuting a “proof-of-concept” of how travel searching and booking could work using virtual reality headsets. Read more at Skift

Hotels

Airbnb Debuts Business Travel Search Tool: Since debuting in 2008, Airbnb Inc. has marketed itself to adventurous vacationers looking for unique and cheap accommodations. Next week, the San Francisco-based travel upstart will get a bit more buttoned up. Read more at Skift

Hilton Launches Points Pooling for Its Honors Loyalty Program: Hilton, which overhauled its Honors Loyalty Program earlier this year, launched a new tool for members to share points this week. Called Points Pooling, the program allows up to 11 members of the program to pool points into one account, potentially making it easier to book high-ticket items like free award nights or swanky Hilton Experiences. Read more at Skift

Wyndham Is Finally Harnessing Its Global Scale Via Loyalty: Wyndham Worldwide’s first quarter earnings were, as CEO Stephen P. Holmes noted, “right in line with our expectations” and those expectations support a major strategy designed to synergize all three of the company’s businesses: hotels, timeshares, and vacation rentals. Read more at Skift

Starwood Founder Launches New Extended Stay Brand Uptown Suites: The select-service, extended stay portion of the hospitality industry is getting a new brand from the founder and creator behind W Hotels and, most recently, luxury eco-boutique brand 1 Hotels. Read more at Skift

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New York Launches Ferry Service to Better Connect the Boroughs

Mark Lennihan  / Associated Press

Passengers on board a NYC Ferry watch the Manhattan skyline as they approach the Wall Street pier, May 1, 2017, in New York. The new ferry connecting Rockaway, Queens, Brooklyn’s Sunset Park and Manhattan inaugurated service Monday. Mark Lennihan / Associated Press

Skift Take: This new ferry service could end up helping tourists as much as locals. Not only can it relieve some pressure on overcrowded trains and buses, but tourists love views of the city and everyone wants a more pleasant trip to Rockaway Beach in Queens in the summer.

— Sarah Enelow

New York City has launched its new ferry service.

The NYC Ferry service started Monday with a Rockaway, Queens, route . The area got priority because residents there have some of the city’s longest commutes.

The launch also included a previously existing East River route with refurbished ferries.

NYC Ferry will get a South Brooklyn route on June 1. An Astoria, Queens, route begins in August, followed by Lower East Side and Bronx routes in 2018. An estimated 4.6 million passengers a year are expected to use the ferries, which will cut travel times by as much as two-thirds.

A ride costs $2.75, the same as the subway, and includes transfers.

The ferries accept MetroCards. Riders also can buy tickets on their smartphones.

The ferries are WiFi capable, and will serve snacks and alcoholic beverages.

This article was from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Violent Attacks Push European Tourism to Extremes

Christophe Ena  / Associated Press

French riot police patrol on the Champs Elysees boulevard, with the Arc de Triomphe in background, in Paris. Christophe Ena / Associated Press

Skift Take: Turkey, Egypt and Tunisia have all been devastated by terror attacks in recent years and they are all well down on their previous highs. The reluctance of tourists to visit is having unintended consequences while other destinations such as Barcelona are experiencing a boom.

— Patrick Whyte

One week before the UK Prime Minister triggered her country’s departure from the European Union, and less than two weeks before our inaugural Skift Forum Europe, we launched a series of four stories devoted to Resetting Transatlantic Travel.

One of our 2017 Megatrends called this year one of reckoning for European tourism. With the pending departure of the UK from the EU, the growth of low-cost carriers like Norwegian Air, multiple violent acts in major European cities, and the rise of neo-isolationism in the United States and some European countries, it’s indeed a year of large-scale shifts for the most popular region in the world for tourism.

Our third story looks at how violence in and around Europe is changing the market and the impact it is having on certain countries.

When Nick Wrightman, a tour operator with almost 30 years’ experience in Turkey was travelling through the southern city of Marmaris last year, he was struck by how few people there were.

The area enjoys a hot Mediterranean climate, has plenty of hotels, and is a relatively good value: It should have been heaving with tourists from all over Europe. The same pattern could be seen all over the country – 2016 was a very, very bad year for tourism in Turkey.

“We’ve got properties in the Bozburun Peninsular [and] you sometimes have to go through Marmaris to get to it. That’s why I noticed that it was much quieter last year,” he said.

Turkey is in the middle of a tourism slump. According to official figures from the Ministry of Culture and Tourism, the number of foreign visitors fell by 30 percent to 25.4 million. The decline can largely be explained by violence and other geopolitical factors. A series of attacks — some of which have killed tourists — over the past couple of years have put off many people about going to the country.

Turkey is not alone in this respect. Countries popular with tourists such as Egypt and Tunisia have been targeted as have European cities such as Paris, London, and Berlin. Fear and uncertainty are reshaping the landscape, at least on a temporary basis, which is turning some places into ghost towns, while others are dealing with altogether different consequences.

Overtourism in action

People cool off at Sant Sebastia and Sant Miquel beaches in Barceloneta neighborhood in Barcelona, Spain, August 16, 2015. REUTERS/Albert Gea

The Spanish city of Barcelona is suffering a very different problem than Marmaris, Turkey. Cheap flights and the total package of beaches, mountains and culture have helped it become one of Europe’s tourism hotspots. This winning combination resulted in 9.1 million tourists staying in the city’s hotels in 2016 – a 9.2 percent increase on the previous year.

In the peak summer months La Rambla, the 1.2 kilometer thoroughfare that runs all the way to the sea, is packed from morning well into the evening with bars and restaurants selling overpriced sangria to tourists happy to be part of the crowd.

“In terms of tourists, I think in Barcelona, for the last three years we have had a new record every year,” said Guillermo Gaspart, the founder of micro hotel stay company ByHours, which is based in the city.

The statistical increase is also born out in Gaspart’s own experience.

“It’s more busy than usual but at the same time if you are walking around La Rambla today you can see for example that there are a lot of police. Even the though we haven’t received any kind of terrorist attack, we are at the maximum alert here in Barcelona.”

Gaspart calls some of tourists “borrowed,” in the sense that they might not have come to Barcelona had it not been for problems elsewhere.

Most other cities can only look on enviously at Barcelona’s ability to keep on drawing the crowds and, although we can’t know the motivations of each individual tourist, it seems likely to have benefited from the reluctance of some to travel to areas that have experienced violent attacks in the recent past.

But this continuing popularity is causing overtourism problems in Barcelona.

“Every day this discussion is bigger in Barcelona between locals and people doing business with tourists… because it’s not only the hotels… it’s taxis, shops, it’s everything that’s taking advantage of tourists,” Gaspart said.

Although the city obviously benefits from the spending that comes from millions of foreign tourists, the question of how it is managed has become a huge issue.

Around 18 months ago a group of neighbourhood associations came together to form the Assemblea de Barris per un Turisme Sostenible (ABTS) to facilitate the change they thought was necessary.

“What we do is mainly we criitcize and denounce and try to find and put on the table alternatives to the touristic model we have in the city right now and [that we’ve had] for a long time,” said Daniel Pardo a member of the organization..

For the ABTS it’s not simply the number of tourists, it’s the “conflicts created by mass tourism” in neighbourhoods across the city. Residents are being displaced by hotels and alternative accommodation providers. The shops that may be more use to locals are being swapped for ones aimed at tourists, and these new stores “are obviously useless for everyday life,” Pardo said.

There’s also the problem of what to do with waste from this mass consumption.

The protests earlier this year and the general movement is not a vendetta against tourists but part of a bigger issue.

“This is something that is not usually well understood by some media, which is the conflict is not neighbours/tourists it is city/tourism industry and it is a conflict between public interest and private interests,” he said.

At the moment the associations have the support of the city’s mayor, Ada Colau, who doesn’t want the city to become a cheap souvenir shop aimed just at tourists. She is driving a campaign to ensure that the money raised from tourism actually benefits locals.

The €1.2 million ($1.3 million) dividend from Barcelona’s tourism tax is being used to lay on extra buses during the busy summer months and improvements will also be made to squares in Gràcia and the Collserola Natural Park.

Not everyone in Spain is keen to talk up the problems associated with overtourism.

The country’s tourism minister Álvaro Nadal referred it it as “tourismphobia” and said it was only found in two places: the Balearic Islands and Barcelona.

“I think that Spain has always been a very open country, let me say this to you. We always pride ourselves on being good hoists. That’s why tourism is so important in Spain, not only because our supply has quality and our prices are very good… but also because in the mood of the people is this openness to all foreigners,” he said.

“So I would say that I don’t feel right thinking about this phenomenon of tourismphobia I think its something that should go down. I hope this is more or less something that will pass over with time. But in the meantime we have to work in order to make more attractive the idea of tourism. “

Spain’s popularity is nothing new. Northern Europeans have been flocking to the Mediterranean coast since the 1950s – it is just that it in recent years it had more competition. But violent attacks elsewhere have driven up the demand.

Empty hotels

Tunisian police officers guarding Imperial Marhaba hotel during visit of top security officials of Britain, France, Germany and Belgium in Sousse, Tunisia, in 2015. (AP Photo/Darko Vojinovic, File)

Violent attacks and the wall-to-all news coverage that invariably follows — typically labeling them as terrorism when they hit Europeans or Americans — have dealt a brutal blow to the tourism industries of many countries in and around North Africa and the Middle East.

Despite the worries associated with the Arab Spring, which started in Tunisia in late 2010, the country was steadily growing its tourism industry by offering a cheaper alternative to Southern European destinatinations.

French, Germans, Italians and British travelers were flocking to its beaches in increasing numbers. Two attacks – one at a museum and one at a beach — in the space of just over three months in 2015 killed 60 people, most of whom were tourists. Following the second in Sousse, tour operators decided they couldn’t take the risk anymore and largely pulled the plug.

The latest government figures show that between January and September last year Tunisia booked $750 million in tourism receipts, down 8.4 percent on the previous year and 34.1 percent on 2014.

Although arrival numbers have risen slightly, the total is still down on previous years. Things are even worse for Turkey and Egypt, both of which were reliant on European tourists.

According to Euromonitor International, arrivals (not just Europeans) are down year-on-year in both Turkey and Egypt and although Tunisia has bounced back slightly, its 2016 total is way down on 2013.

“It’s well-documented that there is just obviously for mostly geopolitical [and] terrorism reasons there are countries like Egypt, Tunisia, Turkey which have been hard hit. And obviously good alternatives especially for Europeans who go to these countries is to go to other countries, which offer a similar product especially Spain, that’s perfromed very well because it offers [a] similar relatively cheap beach destination experience. Spain, Italy, Greece have been performing relatively well,” said Wouter Geerts, senior travel analyst at Euromonitor.

Not only has Egypt suffered from tourists shunning its Red Sea beach resorts but cultural tourism to Cairo and Nile cruising have also declined.

The suspected bombing of Metrojet Flight 9268 in October 2015 led many European governments to ban flights from Sharm el Sheikh, Egypt. Gradually these were lifted with only two countries retaining the ban to this day. One of these is Russia, where the majority of the 224 passengers killed were from, the other is the UK. There is no ban on travel to Cairo and Luxor in the UK but the perception because of the headlines generated by the Sharm el Sheikh ban is that the country is unsafe.

Across Europe there is no coordinated approach to deciding if a country is safe for tourists to visit. That’s why occasionally you get the seemingly contradictory approach taken by a pan-European company like TUI Group, which may offer holidays from certain countries but not others. This is normally because insurance policies are voided if a country’s government says it is unsafe to travel.

Philip Breckner, is the commercial director at small specialist tour operator Discover Egypt, and he believes the country’s reputation at least in the UK is being tarnished by the flight plan to Sharm el Sheikh.

“We get people that call up and say ‘are the Nile cruises operating or have they started operating again’ and we say ‘well they’ve never stopped operating’,” he said.

Brits and Russians might be absent but it is not all bad news, according to Breckner.

“Egypt has been booming in the last few months with tourism from other counties primarily from the east: China, India [as well as] some other European countries, all of which have reintroduced tourism to Sharm el Sheikh.

“On the Nile cruise that we operate there are weekly and regular American groups on board. Usually the Americans are deterred by these things but they’re still traveling.”

City targets

It isn’t just counties in the Middle East and North Africa that have had their tourism industries devastated by violence targeted for maximum media impact. Several European cities have suffered their own attacks in recent years.

France has been hit multiple times, most notably with the coordinated strikes in November 2015, which left 130 people dead, including 89 at the Bataclan theatre, while more than 80 people were killed in an attack in Nice in July 2016. Brussels and most recently London have suffered too.

According to hotel research company STR, each market has been affected differently and the level of subsequent disruption largely comes from the severity of the attack.

“We’re seeing now that the way a hotel market reacts to an attack really does depend on the severity,” said Thomas Emanuel, STR’s director of business development. “Of course, any time innocent lives are lost or people are injured, it’s tragic. But this most recent attack in London and even the December attack in Berlin have not had much of an impact on hotel performance.

“When there is a larger number of casualties, as was the case in Nice, Brussels and Paris over the past two years, it takes a longer duration without additional incidents for tourism confidence to grow. This is also what we’ve noticed in Istanbul, as it remains to be seen when the market will be deemed a safe destination again.”

Violence is an issue across Europe but historically it is at a lower level than through much of the 20th century. The difference is perhaps that the targets have changed and that 24-hour rolling news coverage as well as social media manage to magnify everything.

“It’s not specifically going after tourists but just places where tourists are likely to be. So places like transport hubs, airports [like in the] Brussels attack. Again where tourists are moving through, although they aren’t a specific target…” said Jesper Cullen, a senior analyst covering Europe and Sub-Saharan Africa at Risk Advisory Group.

What happens next?

Europeans, especially those in the north of the continent, are loath to give up their annual two weeks in the sun. What violence and other geopolitical problems do, is cause a recalibration with tour operators — and subsequently tourists — moving elsewhere.

Thomas Cook has added capacity in smaller destinations such as Bulgaria and Croatia to replace others that have fallen out of favour and rival TUI Group has made a similar move.

The problem for Turkey, Tunisia and Egypt is exacerbated by the fact that the issues, however old, are still getting an airing.

The beach attack in Tunisia, which took place in 2015, was in the news again during a long-running inquest into the deaths of the thirty Britons killed. The country is effectively still a no-go zone because of advice from the UK Foreign and Commonwealth Office.

Egypt too still has its problems. Israeli authorities warned of a possible attack on tourists over the Passover holiday just last month. Turkey’s problem is slightly different, stemming instead from the growing power of President Erdogan, in what seems to be an increasingly divided country.

“The attacks that are happening in Turkey have definitely had an impact and you also had the coup and we’ll have to see how the referendum, that Erdogan just won, if that’s going to have any impact on how the country’s being governed and ruled and if that has on impact on how open it is to tourism,” said Euromonitor’s Geerts.

“But its likely that Turkey remains open for tourism because it is a very important part of their economy and the question is just how well they are responding to the attacks that have been happening and also the question especially with Turkey is how do people perceive the attacks.

“And is there a case especially with Turkey where people are getting used to them a bit more and it is becoming part of the decision making process when you decide to go to Turkey that you know that there are attacks but that those attacks tend to be in the major cities and the beach resorts might be relatively safer and therefore you might still be able to go to say Antalya, Alanya places like that.”

In Europe the vacation season is still young with most people, not heading off until June, July and Augusts and Wrightman remains hopeful that there could be a recovery.

His own business, The Discerning Collection, which focuses on the upmarket end of travel, is on a par with last year but that is still down on previous highs.

“I think it’s going to be slightly better this year than last year. I can see what Thomas Cook and Jet2 are doing purely by the number of aircraft they’ve got going into Dalaman so thats a good indication, the same with Monarch. I can only judge that by the number of aircraft going and because they’re quite busy.

“So if you look now actually at trying to get a high season flight to Dalaman for example, [it’s] quite expensive. So it seems to have sold. I suspect and I’m pretty sure from my bookings alone that it’s going to be busier than last year.”

This is the third in a series of stories called Resetting Transatlantic Travel. Articles include:

Part one: The European Union’s impact on travel
Part two: The business of transatlantic flying
Part three: Violence and European travel habits
Part four: Neo-Isolationism and transatlantic tourism

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Florida Tourism Officials Are Fighting for Funding as Cuts Loom

Visit Florida Facebook

Visit Florida faces a big funding cut this year. Shown in this promotional photo from the organization’s Facebook page is Bikini Beach Resort in Panama City Beach. Visit Florida Facebook

Skift Take: If legislators ultimately slash funding for Visit Florida — and the state’s governor signs off on the budget — will the private sector step in with more cash? Or will the organization be forced cut its marketing efforts as competition heats up for international tourists?

— Hannah Sampson

Visit Florida’s new CEO made a desperate plea to lawmakers Friday morning as they prepare to pass a budget that would slash the marketing organization’s funding by 67 percent.

The request from Ken Lawson, who was named to the job in January, was backed by statements from Florida Gov. Rick Scott and Roger Dow, president and CEO of the U.S. Travel Association.

“We need you to fund Visit Florida, not just because it’s an organization,” Lawson said. “Because we’re a state and we’re a brand and we’ve got to fight the competition that’s coming after us.”

Leaders from the Florida House and Senate this week agreed to a budget deal that would allocate $25 million to the tourism marketing corporation for 2017-18, down from $76 million this fiscal year. Earlier this month, Scott asked legislators to set aside $100 million for Visit Florida in a surprise increase from his earlier request.

The political wrangling follows a tumultuous stretch for the organization, which came under fire for a lack of transparency over a $1 million contract with the Miami rapper Pitbull. Three top executives, including former CEO Will Seccombe, were forced out, and the Florida House of Representatives threatened to pull funding altogether.

“A number of states have made ill-advised cuts to their tourism offices,” Dow said in his statement. “The economic consequences of this risky, discredited experiment are swift, severe and can take decades to recover from.”

Before the budget deal was reached, a dozen representatives from destinations throughout the state gathered at a Visit Florida-organized media luncheon in New York City early this week to pitch the beaches, theme parks, rocket launches, and other attractions in their various locales.

It was a routine get-together in what has been a not-so-routine year.

“We never thought that [funding] was going to completely go away,” said Nicole Stacey, director of marketing and communications for Visit Pensacola. “This is the worst it’s ever been, the fear.”

At this week’s event in New York City, representatives for the destinations said the organization helps them expand their reach — “for instance, this event,” one pointed out — but also gives a crucial boost to international efforts.

Visit Florida helps overseas journalists travel to the state, joins forces with local groups on advertising campaigns, and creates incentives for airlines to fly to local airports, among other initiatives.

“We would not be able to pay the airfare for all the journalists that Visit Florida brings in,” said JoNell Modys, public relations and communications manager for the Naples, Marco Island, Everglades Convention & Visitors Bureau. “It’s a phenomenal opportunity that would just disappear if Visit Florida’s budget were cut.”

Modys said her bureau is facing the prospect of reduced funding for marketing dollars at the county level as well.

“There are people who just do not understand the power of destination marketing,” she said. “If you don’t have a message in the marketplace directed at today’s travelers, you’re nowhere. They’re going to react to someone else’s message and go there.”

Canada, the UK, Germany, and Latin American countries including Brazil are all important sources of foreign visitors for Florida, and that international market is increasingly fragile as the strong dollar makes visits more expensive. Still unknown is how much the Trump administration’s rhetoric and policies might discourage visitors. Emirates, for example, has already announced it is scaling back the number of flights to Fort Lauderdale and other U.S. cities due to actions taken by the administration.

On Friday in Florida’s capital, Lawson warned legislators that other states including California, Georgia, and Texas were already trying to capture the state’s tourists. And he said thousands of jobs could be lost if funding is cut to $25 million.

“If we fail to properly fund Visit Florida and be an arm to market these small, medium, and large comunities across the country and world, we’re going to see it in our revenues,” Lawson said. “We’re going to see people unemployed, we’re going to see business not growing and we’re going to feel the pain of a philosophical discussion that could have gone another way.”

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Ranking Customer Satisfaction With Airlines, Hotels and Online Travel Agencies

JetBlue Airways

JetBlue Airways was the top rated airline for U.S. customer satisfaction this year according to the annual ACSI Travel Report. JetBlue Airways

Skift Take: When it comes to airlines, customers care more about price than anything else, it seems.

— Deanna Ting

When it comes to customer satisfaction, it’s clear that American consumers have different sets of expectations for airlines, hotels, and online travel services.

That’s the message delivered by the results of the annual American Customer Satisfaction Index (ACSI) report, which is based on interviews with thousands of U.S. consumers over a 12-month period ending in March 2017.

While rankings for all three categories are fairly consistent with data from years past, certain trends are emerging.

Low-Cost Carriers Are Preferred and Legacy Airlines Are Trying to Compete

Overall, despite some of the troubling stories of passenger experiences as of late, it seems that overall customer satisfaction with airlines has risen. Passenger satisfaction with airlines is up 4.2 percent to 75 out of a scale of 0 to 100, up from a score of 72 in 2016.

The top-ranked airline was JetBlue Airways, with a score of 82, followed by Southwest Airlines (80), and Alaska Airlines (78). All of those airlines, as well as American, Delta, United, and Allegiant saw improvements in their scores compared to the year before. Satisfaction with Frontier (63) and Spirit (61) declined.

The recent incident involving the forced removal of a passenger from a recent United Airlines flight was not included in the report results but United was the lowest ranked of the three main legacy carriers, the other two being American and Delta.

As the satisfaction scores show, however, it seems that more passengers are motivated by price than other factors, which seems to support the legacy carriers’ recent decisions to offer “basic economy” fares that allow them to better compete with low-cost carriers.

As far as improvements in customer experience goes, airlines saw the highest customer satisfaction ratings for the ease of the check-in process (82); ease of making a reservation (82); courtesy and helpfulness of flight crew (81); timeliness of arrival (81); and website satisfaction (81). They were least satisfied with loyalty programs (76); quality of in-flight services such as beverages, food, movies, and music (74); and seat comfort (71).

Hotels Are Held to Higher Expectations Than Airlines

Overall guest satisfaction with hotels is up 2.7 percent to a score of 76 out of 100. However, because the hospitality market is so fragmented with so many brands and options to choose from — not to mention the growing popularity of vacation rentals and short-term rental platforms like Airbnb — it can be more challenging for hotels to exceed customers’ expectations, which the ACSI report acknowledged as being higher than those for airlines. Not only that, but the largest 50 hotel chains in the U.S. only account for only 45 percent of the total market share for lodging.

When it comes to guest satisfaction by hotel company, Hilton scored highest with an ACSI rating of 81, which was the same score it received last year. It was followed by Hyatt (80), Marriott (80), Starwood (now Marriott) (79), and InterContinental (78). Hotels in the economy and midscale categories, such as Best Western (76), La Quinta (75), and Choice (74), generally scored at or below industry average for guest satisfaction. Wyndham was the lowest rated major hotel chain at 71, and G6 Hospitality (Motel 6) was the lowest rated with a score of 65.

When specific brands are examined, the top brands in terms of customer satisfaction were JW Marriott (85), Hilton Garden Inn (84), and Hyatt Place (84). The lowest ranked hotel brands were Choice’s Econo Lodge (66), G6 Hospitality’s Motel 6 (64), and Wyndham’s Super 8 (63).

In terms of what guests like most about the customer experience, they cited ease of making a reservation (86), ease of check-in process (85), and courtesy and helpfulness of staff (83). They were least satisfied with the quality of amenities such as the pool, spa, fitness room, and business center (74); quality of food services (74); and loyalty programs (73).

Online Travel Services Need to Innovate More

Customer satisfaction with online travel agencies (OTAs) is unchanged from last year, with an ACSI score of 79. But the data showed respondents prefer booking direct with hotels, given a customer experience benchmark of 86.

Of the major OTAs, Expedia was ranked highest for customer satisfaction (80), up 4 percent from last year. It was followed by Expedia’s Orbitz (78), Priceline (77), and Expedia’s Travelocity (77).

In its report, ACSI pointed out that customer satisfaction with OTAs has remained stagnant from 2016 to 2017 while satisfaction levels with airline websites and hotel websites has increased during the same period. This seems to suggest that OTAs, while rather dominant, may need to look at ways of improving their overall customer experiences.

In terms of customer service benchmarks for OTAs, respondents gave ease of booking and payment process a score of 84, compared to scores of 86 for hotels and 82 for airlines. OTAs also saw declines in customer satisfaction from 2016 to 2017 related to helpfulness of customer-generated reviews (from 79 to 78); helpfulness of customer support (from 79 to 78); usefulness of site-generated recommendations of other travel services (from 77 to 75); and loyalty programs (from 76 to 74).

Download the entire report here.

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New Speakers Join the Skift Global Forum Lineup

Skift Take: You’d be a fool not to register for the hottest conference in travel.

— Rafat Ali

If you attended our main event last year, you know that Skift Global Forum NYC 2017, our flagship conference happening on September 26-27, is poised to have one of the most stacked speaker lineups in travel of the year.

Just a couple weeks ago we announced our first batch of incredible speakers including the CEOs of Delta Air Lines, Royal Caribbean, Marriott, Hilton, Wyndham, Expedia, TripAdvisor, and The Priceline Group.

Secure Your Spot

And today, we are thrilled to announce a slew of additions to our speaker list. Our speakers come from all backgrounds and sectors within the world’s largest industry. They’re the decision-makers leading us into the future of travel and breaking down silos as technology, marketing, UX, and design collide.

  • María Claudia Lacouture, Minister of Commerce, Industry and Tourism of Colombia
  • Lina Annab, Minister of Tourism and Antiquities of Jordan
  • Roland Fasel, COO of AMAN
  • Sven-Olof Lindblad, CEO of Lindblad Expeditions
  • Julie Cary, CMO of La Quinta Inns & Suites
  • Lisa Ronson, CMO of Tourism Australia
  • Jen O’Neal, Founder & CEO of Tripping.com
  • Eric Breon, CEO of Vacasa
  • And more!

If you’ve made it this far, you should know, we have 12 Early Bird Tickets Left! Don’t wait to register at $800 OFF. The price will increase on 5/5.

Register Now to Hear From These Speaker + Save $800

And if you’re interested in sponsoring the event, drop us a note at forum@skift.com. You’ll join the likes of Sojern, The Points GuyButton, Criteo, and Smartling.

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How Women in the Travel Industry Are Tackling Gender Discrimination

Women in Travel Summit

A Women in Travel Summit panel discussion on April 23, 2017 in Milwaukee, WI about getting more women into leadership roles resulted in much storytelling from female professionals in the audience. Pictured is moderator Laura Mandala, founder of Women in Travel & Tourism International. Women in Travel Summit

Skift Take: Grassroots activism is now the go-to tactic for achieving gender equality in the travel industry. Lobbying male executives one-on-one isn’t working, so women are employing their collective influence, reminiscent of recent movements like the Women’s March in Washington, D.C.

— Sarah Enelow

Travel industry executives are overwhelmingly male, and these days, women aren’t just discussing the topic openly, some are mobilizing for change.

Not unlike participants in the Women’s March, which took place in January in Washington, D.C., as well as cities around the world, many women in the travel industry seem ready to actively take on gender discrimination.

Laura Mandala, founder of Women in Travel & Tourism International and managing director of Mandala Research, spoke on a panel at the Women in Travel Summit (WITS) in Milwaukee on April 23, and suggested that women take collective action, in part by using rallying cries like #grabyourpurse, which is associated with boycotting Trump-owned businesses.

“Every time we see an organization or an entity where women are not being treated equitably, we can point it out, we can send [the hashtag] out… We’re encouraging women: Grab your bag, work somewhere else, grab your bag, go travel somewhere else.”

Mandala said that at the Priceline Group, 27 percent of the senior management team is women; at Amadeus 20 percent; at Disney 14 percent; at Delta 11 percent; and at Hilton eight percent.

It should be noted that at the Priceline Group, the CEO of its most important brand, Booking.com, is a woman as is the CEO of its OpenTable unit, while the Group president is male.

“We did an analysis and found that there were a dearth of women in most senior leadership roles in this industry,” Mandala said. “Women are making 70 percent of all travel decisions, 72 percent of all travel agents are women, and yet only 33 percent are leading a travel organization like the American Society of Travel Agents.”

Mandala mentioned North Carolina’s controversial “bathroom bill,” which resulted in a significant loss of tourism revenue for the state. Out-of-state organizations “are boycotting North Carolina, it’s kind of grab your bag, grab your wallets… we’re taking our dollars elsewhere… that’s one way that we can work together and be really powerful,” she said.

One of the attendees was Katie Henly, founder of Yes Way! The company highlights women-owned businesses in various travel destinations, and furthers the idea that women can and should vote with their actions and dollars.

“What was pivotal in my career was getting engaged in a completely male-oriented association,” said Holly Agra, panel speaker and president of Chicago’s First Lady Cruises.

She recounted attending an industry association meeting earlier in her career. “They had the chairs in the front and then a rope, and they said all the women will sit on the other side of the rope because they won’t be voting members. Well my husband didn’t attend the meeting so I sat in the front with all the men, and that was really the beginning for me.”

“We have nurtured and promoted several women to be [tour boat] captains, which is a very male-oriented business,” said Agra.

In an interview with Skift, Marissa Sutera, executive chair of WITS, noted the importance of social media and digital community when it comes to “uncovering the companies that are not doing it so well.”

The panel speakers identified themselves as older than many of the women in the audience, with social influence being a major differentiator as well as a crucial tool in the 21st century.

“Our idea of success was always measured by a title, profits, volume, etc.,” said Cathleen Johnson, principal of Cathleen Johnson Tourism Consultants, formerly having created the travel and hospitality practice at Edelman. “The definition of success is very different these days, and the biggest measure I think is influence. That’s where you all have such an advantage because you are already in the business of influence.”

Sutera said much of the WITS audience is comprised of influencers.

One audience member recounted a venture capital pitch competition in which she momentarily froze in front of an all-male panel and was told by a panelist that he expected her to run out of the room crying. Another described attending an industry event and being asked whether she was hired as a model for the event rather than being an entrepreneur.

Another was told by coworkers that she had a cute voice and needed to put lipstick on to meet with a journalist.

“Maybe Bill O’Reilly will teach some people a lesson,” said Johnson of the Fox News host who was ousted in April amid sexual harassment allegations. Along those lines, in the travel sphere, a former Uber employee recently brought much attention to sexual harassment allegations at the ride-hailing company. Uber president Jeff Jones resigned in March.

Getting down to the basics — dealing with everyday discrimination as opposed to propelling a broader women’s movement — Johnson asked, “How do you reach salary parity in a better way? …When men get a raise their response is, ‘Is that it?’ When women get a raise they say ‘Oh thank you!’ I think we have to learn to be more bold. I would say being bold, to me, has really gotten me where I’m going.”

Sutera took up the theme. “There could always be more of stepping outside your comfort zone… taking action and working on building up, building out,” said Sutera, who also mentioned that WITS would like to continue this conversation at future events.

“Challenging men who say things like wear lipstick or say things like you’re so cute. Challenge them. Don’t let anything go by the board because every time you swallow it, you’re allowing that to be considered as good behavior,” said Johnson.

Disclosure: Cathleen Johnson is the managing director of public relations firm Percepture Travel, which counts Skift as a client.

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Travel Industry Leaders Say Overtourism Caused by Lack of Planning

World Travel & Tourism Council  / Flickr

Travel industry leaders feel sustainable sustainable practices still have a long way to go at their companies. Pictured is Christine Duffy, president of Carnival Cruise Line, speaking about the topic at the World Travel & Tourism Council Global Summit in Bangkok on April 27, 2017. World Travel & Tourism Council / Flickr

Skift Take: In many destinations, tourism profits are “found” money with no strings attached. That’s great for short-term gains, and so very terrible for long-term thinking.

— Dan Peltier

With hype for the United Nation’s international year of sustainable tourism for development in 2017 encouraging conversations with major travel brands, many leaders within the travel industry feel they’re still not doing enough to address issues of overtourism and unsustainable impacts of travel around the world.

Attendees of the World Travel & Tourism Council Global Summit in Bangkok this week were asked, “How well does the travel and tourism sector actively tackle the issues of mass tourism and its impact?”

The result: more than 50 percent of respondents polled during a Summit session indicated that the industry “isn’t doing very well” in addressing this issue. “Badly” garnered the second highest percentage of votes with many respondents C-suite executives and key decision makers of some of the world’s largest and most influential travel companies.

“Badly” garnered the second highest percentage of votes as many respondents were C-suite executives and key decision makers of some of the world’s largest and most influential travel companies.

Lack of planning by travel brands and government officials has been the biggest misstep in why sustainability and overtourism are increasingly dire concerns of the industry, said Alex Dichter, a senior partner at McKinsey & Company who is currently conducting research on tourism’s impact on destinations.

Some 1.8 billion people crossing international borders each year within the next decades won’t be an issue, said Dichter. “The issue is that while tourists come from everywhere they don’t go to everywhere,” he said, speaking during the Summit on April 27.

Cities such as Venice, for example, have front row seats to the problem. “In Venice, some days there are nearly twice as many tourists as residents,” said Dichter. “Clearly in some places where there isn’t an actual problem, there’s a perceived problem. In Barcelona and Venice, locals are reacting quite aggressively to the influx of tourists. It puts strains on public transport and infrastructure.”

Places like Machu Pichu, said Dichter, are both historical assets and economic assets. “Having a plan is a good start yet 96 of 229 natural UNESCO sites don’t have a tourism management plan in place. “The sense that we’re getting from interviews we’re doing with industry leaders is that there are a wealth of ideas here,” he said. “We just need some structure around these ideas and I do see the beginning of a path forward.”

Not Having a Tourism Plan

Greediness and ignorance are to blame for some destinations and governments without any tourism management plans in place, said Edmund Bartlett, the minister of tourism for Jamaica. “Unfortunately, tourism that has done so much for the economies of so many countries over the last 50 years has had the least attention paid in terms of policy formation, strategy, planning and allocative arrangements,” he said while speaking at the Summit.

Many countries have only recently begun to structure tourism as its own ministry within the government. The U.S., for example, still lacks an official secretary of tourism. ” In many countries, tourism is connected to the ministries of economic affairs, culture, science, commerce and so on,” said Bartlett. “Very few countries have stand-alone cabinet ministers for tourism. That’s part of why things are just happening now.”

But while travel brands are — in theory — meant to work with government officials to implement sustainable practices, their hands are tied in some cases.

“We’re still waiting for Venice to decide what they want to do with large cruise ships and cruise ship visitors,” said Christine Duffy, president of Carnival Cruise Line, at the Summit while addressing concerns that cruise lines are some of the biggest culprits for tourism problems. “We voluntarily no longer bring ships into Venice that are more than 96,000 tons. And in Barcelona, for example, most of the visitors to the city aren’t cruise visitors.”

Duffy said Carnival’s work with destinations is a partnership and that the cruise line considers whether a port has a tourism management plan in place before it decides to sail there. “I think frankly as we’ve grown rapidly during the past 10 years, we do need to take a level of accountability and responsibility to make sure that when destinations or governments don’t have a plan, we need to understand what their plan is before we jump in,” she said.

“I think frankly as we’ve grown rapidly during the past 10 years, we do need to take a level of accountability and responsibility to make sure that when destinations or governments don’t have a plan, we need to understand what their plan is before we jump in,” said Duffy.

Duffy’s claim that accountability is important is particularly relevant in China and why the cruise line continues to expect strong results for Asian sailings. China is one of the fastest-growing cruise markets as “130 million Chinese outbound travelers are a new phenomenon,” she said.

With Jamaica, however, there was little accountability in the past. “We just wanted the cruise ships to come in, the planes to arrive and hotels to be built,” said Bartlett. “And so we didn’t pay enough attention to carrier capacities and key sustainability issues. You don’t realize that you also need to build the infrastructure to support tourism.”

“Tourism happened, it wasn’t planned,” he said, especially at some of the island’s top beach resorts. “Now we’re trying to recover ground and reorganize ourselves.”

Humans, of course, aren’t the only ones impacted too many tourists. Biodiversity and how wildlife and plant life, in some instances, are suffering from tourism is often left out of tourism discussions, said T.P. Singh, deputy regional director of Asia for the International Union for Conservation of Nature, while speaking at the Summit.

Carnival’s Attempt to Curb Overtourism in Some Destinations

With many Venice and Barcelona residents are furious about the crush of tourism, Carnival has already taken steps to bring ships to other ports traditionally underserved by tourism.

The cruise line still sales to Venice but also sales to smaller ports such as Bari in Southern Italy, for example, said Duffy. “But people don’t necessarily want to go to Bari,” she said. “For many people, Venice is the place to go and the place that’s been marketed.”

It’s always been about having a marquis destination on cruise itineraries, said Duffy. “The draw is if I’ve not been to Europe or Italy, I want to see Venice,” she said. “But I’m happy to see all of these other places. How do we find the right balance?”

Duffy said 25 million people will take cruises this year and that even in Barcelona, Carnival is still encouraged to bring in ships. “We’re opening a new cruise terminal in Barcelona and while the people of Barcelona may be up in arms, we’ve been working with the port authority and government officials in Barcelona for some time to build this new terminal,” she said.

There is a Silver Lining to Overtourism Discussions

Duffy said she’s optimistic about combatting overtourism but Carnival and other cruise lines and travel brands had many challenges in the last couple of years and shifting ports and itineraries are often more connected to crises and disease outbreaks, for example, than the need to spread tourism to new areas.

“If we don’t consider the impact that we have, then what do we have to offer as a company that provides the experience of seeing the world?” said Duffy.

The fact that sustainability is being discussed at all is a positive sign that the industry is moving forward on the issue, said Maria Damanaki, global managing director of oceans for The Nature Conservancy and former European Union Commissioner for Maritime Affairs and Fisheries.

“Ten years ago for the tourism industry, sustainability was not talked about as a real challenge,” Damanaki said while speaking at the Summit. “It’s also easy to put the blame on governments but the private sector has to do its own part. The biggest challenge for Venice in the next decade won’t be tourism, it’ll be climate change.”

And Carnival and some other travel brands already fly, sail or have opened properties in tertiary destinations generally off the beaten path that could positively benefit from increased tourism. “The first step is you have to have a view on capacity,” said Dichter. “Certainly in tourists sites that are wonders of geography such as the Galapagos, capacity controls are really the only answer. But if we look at cities, part of the answer has to do with spreading the wealth.”

Southern Italy’s economy could use more tourists, for example, as cities in the region aren’t typically on most travelers’ bucket lists, Dichter said. “The spreading the wealth notion is not just about taking the pressure off overtouristed destinations but also giving a benefit to undertouristed destinations.”

Travel brands, however, can’t force travelers to go where they have no desire to go and the decision makers in distributing tourism to new areas will ultimately be travelers — not brands desperate to tell a new story.

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