Hyatt Isn’t Abandoning Expedia Just Yet as the Two Sides Reach Agreement in Principle

Ludovic Burtron  / Flickr

The Grand Hyatt New York. Hyatt Hotels & Resorts said it doesn’t anticipate any changes to its distribution on Expedia platforms. Ludovic Burtron / Flickr

Skift Take: The Hyatt-Expedia crisis seems to be averted, for now.

— Deanna Ting

As Skift predicted, it does not appear that Hyatt will be leaving Expedia anytime soon.

On July 31, the deadline for Hyatt and Expedia to reach a new distribution agreement, Hyatt confirmed that it has reached an agreement “in principle” on contract terms.

At least for now, it’s business as usual when it comes to being able to book Hyatt hotels on Expedia and its sister booking sites without any disruption.

Hyatt issued the following statement:

“We remain focused on growing the value proposition for our guests who book directly with Hyatt so that we can build stronger relationships with them. We also work with third-party distributors to reach guests who might not be frequent travelers or who otherwise have a reason to book through these sites.

Hyatt is in dialogue with all of our OTA [online travel agency] partners around the world as a regular matter. We recently agreed to build on our existing relationship with Booking.com by implementing new initiatives intended to reduce costs and increase flexibility while driving demand. Additionally, we’ve had productive discussions with Expedia and have agreed in principle on terms that address our concerns about distribution costs and flexibility. We expect that Hyatt hotels will continue to be distributed on Expedia platforms without disruption.”

In June, news broke that Hyatt had sent a notice to its hotel owners, warning them of the possibility that Hyatt properties may no longer be advertised on Expedia.

And in that same month, Hyatt signed a deal with Expedia’s biggest rival, Booking.com, presumably to gain leverage in its ongoing contract negotiations with Expedia.

Hyatt’s statement about the negotiations seems to affirm that it doesn’t foresee any changes to its distribution channels but there are some clues within that seem to suggest this is still a somewhat tenuous situation for both Hyatt and Expedia.

Notably, Hyatt mentioned its “existing relationship with Booking.com by implementing new initiatives intended to reduce costs and increase flexibility while driving demand,” as if to remind Expedia (and the rest of the travel industry) of their newly revised contract.

The statement also says Hyatt has “agreed in principle” with Expedia, but it does not say that a new contract or agreement has been signed. The company also “expect[s] that Hyatt hotels will continue to be distributed on Expedia platforms without disruption.”

According to a source, however, Hyatt and Expedia have agreed on key terms and have signed a letter of intent. These terms will then be incorporated into a master agreement between the two companies.

Skift reached out to both Hyatt and Expedia for additional comments but has not yet received a response from either company. Expedia did not immediately issue a statement about a resolution of the talks.

What will be interesting is seeing if, once an agreement between the two companies is finally signed, what the terms are, and how much more “flexible” and less expensive the new contract might be for Hyatt. Those new terms will no doubt have an influence of future contract negotiations that take place between the hotel chains and the online travel agencies going forward.

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Slovenia Says Its Melania Trump Tourism Bump Is Still Going Strong

Nicolas Vollmer  / Flickr

Slovenia has seen visits by U.S. travelers increase 15 percent since President Trump took office in January. Pictured is the seaside town of Piran, Slovenia. Nicolas Vollmer / Flickr

Skift Take: U.S. First Lady Melania Trump has definitely inspired some U.S. travelers to visit Slovenia in recent months. But in general, European destinations outside of Western Europe were already getting a bump before the inauguration.

— Dan Peltier

The tiny European nation of Slovenia is undergoing a tourism boom partly because it’s the native country of U.S. first lady Melania Trump.

The Slovenian Statistics Office said Monday that some 1,939,000 tourists visited the Alpine country of 2 million in the first half of this year, a 15 percent increase from the same period last year.

Analyzing the impact of the Slovenian-born first lady on the tourism growth, the statistics office said the number of U.S. visitors has risen 15 percent since Donald Trump took office in January.

The deputy director of the Statistics Office, Karmen Hren, said despite the overall growth on the national level, there was no particular change in overnight stays by visitors at Melania Trump’s hometown of Sevnica.

Born Melanija Knavs, the U.S. first lady left Slovenia in her 20s to pursue an international modeling career. The last time she is believed to have visited was in July 2002, when she introduced Donald Trump to her parents at the lakeside resort of Bled over a meal.

Slovenian tourist agencies have been organizing “on the footsteps of Melania Trump” tours showing the places where she lived, studied and worked. Websites promoting the nation of stunning natural beauty also say: “Welcome to the homeland of the new First Lady of the United States of America!”

Slovenia, which has become one of Europe’s hottest nature destinations after splitting from Yugoslavia in 1991, has both a coastline on the Adriatic Sea as well as a chunk of the Alps.

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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Lindblad Expeditions Launches Its First New Ship in Alaska

Michael Nolan and CT Ticknor  / Lindblad Expeditions

National Geographic Sea Bird is pictured in Alaska. Operator Lindblad Expeditions has just launched a new ship to sail Alaskan itineraries for the season. Michael Nolan and CT Ticknor / Lindblad Expeditions

Skift Take: As Alaska proves to be a consistently popular market, more cruise lines — ranging from expedition to mass-market to luxury — are sending new capacity to the region.

— Hannah Sampson

A new cruise ship is set for an eight-day expedition exploring Southeast Alaska.

The Juneau Empire reports (http://bit.ly/2uN916n ) Lindblad Expeditions-National Geographic launched the Quest, its first ever new build, Saturday from Juneau.

The ship left from Anacortes, Washington, for a shake-out cruise to Alaska, arriving in Juneau Friday. Its first passengers boarded at 5:30 p.m. Saturday.

The 100-passenger vessel originally was expected to debut last Wednesday. But the line scrubbed that cruise, citing problems with a launch attempt. Then a little over a month ago, the vessel was damaged as it slid from the launch ramp.

The Quest will operate expeditions in Alaska through mid-September. The ship will also sail in Costa Rica, Panama and through the Canal to Belize.

 

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Low-Cost Spirit and Allegiant Struggle to Fly On Time

Airbus

Flying on big-bargain airlines like Spirit and Allegiant has often meant delayed or canceled flights as they’ve struggled to run their operations reliably. Airbus

Skift Take: Allegiant and Spirit are giving the absurd excuse that an airline can’t be both low-cost and on-time. Wrong. In Europe, budget carrier Ryanair tops the rankings for on-time performance.

— Sean O’Neill

Anyone buying a ticket on one of the super-low-cost, low-fare airlines knows not to expect any frills. But in recent months, flying on big-bargain airlines like Spirit and Allegiant has often meant delayed or canceled flights as they’ve struggled to run their operations reliably.

Each has unique issues to address, from Spirit Airlines‘s labor meltdown with its pilots to a wholesale effort at Allegiant Travel to sharpen its aircraft maintenance policies and practices. Allegiant also replaced some employees at various airports this spring with “new faces and fresh blood,” said Scott Sheldon, the airline’s interim chief operating officer.

The low fares continue to fill the planes, and all three of the U.S. ultra low-cost airlines remain profitable. But the hassle factor has been as real for fliers as jet fuel bills are for the airlines.

“We sincerely apologize to our customers who were affected by the flight disruptions during the quarter,” Bob Fornaro, Spirit’s president and chief executive, said in a statement Thursday accompanying the airline’s latest results. Allegiant Travel Co. President John Redmond told analysts on Wednesday, “When you look at our operations [in the second quarter], we did not meet our expectations at all, and surely not those of our customers.”

An ultra-low-cost carrier will never, ever try to be as punctual as a big legacy airline. Being on time all or most of the time costs money. Delta Air Lines Inc., for example, has spent enormous sums in recent years to move toward the head of the industry pack in quashing delays. ULCCs can’t go all-out on that without risking their business model. Most try to settle somewhere in the middle—not so punctual that it boosts costs and not so delay-prone that they get a reputation and incur long-term customer wrath.

At privately held Frontier Airlines Holdings Inc., “we don’t necessarily believe that it’s cost-effective to end up in the top quartile for on-time performance,” Daniel Shurz, a senior vice president, said Friday in an interview. Frontier plodded along in 10th place in the latest federal on-time performance data, for May, as measured over the prior 12 months.

Spirit’s 1,500 Airbus pilots earn roughly 60 percent of their peers’ salaries at other airlines, according to their union, the Air Line Pilots Association. The company and pilots continue to meet with federal mediators. The labor rancor began to affect customers in April, when the airline says pilots began refusing to pick up open trips as part of their push for a new labor contract.

That led to as many as 25 flights a day being canceled by pilot shortages, a number that has swelled to about 800 and cost $25 million in the second quarter. In May, more than half of Spirit’s nearly 500 flights were canceled on 5 percent or more of the days they were scheduled to operate. Police at the Fort Lauderdale, Fla., airport had to handle hundreds of unruly or just plain enraged passengers after Spirit canceled flights amid the pilot contretemps.

That incident, and others, sent Spirit to federal court for a restraining order against its pilots, citing an “illegal work slowdown” by the group. The airline has said the problem has since receded, although Spirit still scrubs two or three flights a day due to pilot staffing. It is also forecasting a lower flight completion factor, 98 percent, for the rest of year than it posted in 2016.

Spirit officials say the labor dispute marred what had been notable gains in higher on-time performance and reduced customer complaints, dating to April 2016. In May of this year, customer complaints about Spirit to U.S. regulators soared. “We were clearly showing the most improvement on those two areas of any other airline, and we were rocking and rolling until this happened,” spokesman Paul Berry said.

Travel glitches on a carrier like Spirit or Frontier are often compounded because those airlines typically don’t fly their routes as frequently as the larger, network airlines. That means there may be only one flight a day, or even just a few a week, reducing passengers’ options. In cases of non-weather delays, the airlines will at times buy a customer a ticket on another carrier.

That’s why the carriers try to minimize the cancellations and keep completions as high as possible. Even if a flight is delayed by many hours, the airline wants to get customers to their destination and avoid expensive rebookings.

Frontier is risking more operational woes in the coming months as it embarks on a major national expansion, with additional connections in its hometown of Denver and a much larger flight schedule from Florida. The airline will add 21 new cities by next spring and nearly double the number of nonstop routes it flies, topping 300.

At Allegiant, many of the problems stem from maintenance procedures and the pains of transitioning from a fleet of aged McDonnell Douglas MD-80 aircraft to newer Airbus jets. Allegiant established a “forward recovery base” in Cincinnati to help reduce the number of aircraft out of service with a special team of techs available for quick dispatch to 18 stations in the Northeast when a plane breaks down.

Allegiant has another incentive to make its flight schedule more reliable. It has grown large enough that next year it must begin reporting monthly operating data to the Department of Transportation, which lays bare each month which airlines run late, lose bags, and draw customer complaints.

“Obviously we want to be aggressive,” Sheldon said, “to really pull this thing up” in the next six months or so.

Pull it up, yes, but not by outspending the ULCC cost advantage. As Einstein said of space and time, it’s all relative.

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

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Security Screening Intensifies in Australia Airports After Plot Disrupted

Dean Lewins  / AAP image via Associated Press

People crowd a terminal at Sydney’s domestic airport as passengers are subjected to increased security, in Sydney, Australia, Monday, July 31, 2017. Security remains heightened in airports around Australia with more intense screening of luggage after law enforcement officials said they had thwarted a plan to bring down an airliner. Dean Lewins / AAP image via Associated Press

Skift Take: Australia’s terrorism threat level has been at “probable” for awhile and the recent plot will make authorities even more vigilant.

— Dennis Schaal

Security remained heightened in airports around Australia with more intense screening of luggage after law enforcement officials thwarted what a police chief described on Monday as a “credible attempt to attack an aircraft.”

Prime Minister Malcolm Turnbull and Border Protection Minister Peter Dutton declined to comment on newspaper reports that Islamist extremists planned to kill the occupants of a plane with poison gas and that a homemade bomb was to be disguised as a kitchen mincer.

“Police will allege they had the intent and were developing the capability,” Turnbull told Australian Broadcasting Corp.

Turnbull announced on Sunday that “a terrorist plot to bring down an airplane” had been disrupted, but revealed few details.

Four men arrested in raids in Sydney late Saturday — two Lebanese-Australian fathers and their sons — had yet to be charged.

Australian Federal Police Commissioner Andrew Colvin said a court ruled Monday that the four could be detained without charge for seven days from their arrest under counterterrorism laws.

“We believe we have disrupted a legitimate and credible attempt to attack an aircraft,” Colvin told reporters without elaborating.

Colvin has repeatedly described the threat as a “device,” without mentioning whether it was explosive.

“The plot that we are investigating we believe was an attempt to put a device onto an aircraft, but beyond that the speculation is just that — speculation,” he said, adding that police had “many working theories.”

Colvin and the government will not comment on media reports that the suspects were not previously known to Australian security officials and that their arrests followed a tip from a foreign intelligence agency.

“Australians can be assured that we have very fine intelligence services and we moved extremely quickly on this one and, as you can see, with the right outcomes,” Turnbull said.

The Australian newspaper cited multiple anonymous sources saying that the plotters were constructing a “non-traditional” explosive device that could have emitted a toxic, sulfur-based gas to kill or immobilize everyone on the aircraft.

Sydney’s The Daily Telegraph newspaper reported that the plotters planned to make a bomb from wood shavings and explosive material inside a piece of kitchen equipment such as a mincing machine.

Police raided five homes Saturday and removed a domestic grinder and a mincer used to make sausage, the newspaper said.

The plot involved smuggling the device onto a flight from Sydney to the Middle East, possibly Dubai, as carry-on luggage, the newspaper said.

Fairfax Media reported that the bomb was found in a home in the inner-city suburb of Surry Hills, a few doors from the local mosque.

Turnbull declined to say whether the group was guided by someone overseas.

“It’ll be alleged that that this was an Islamist extremist, terrorist motivation,” the prime minister said.

Dutton, the border protection minister, urged travelers to arrive at Australian airports two hours before domestic flights and three hours before international flights to allow time for more screening. Luggage should be kept to a minimum and those accompanying travelers should not enter secured parts of terminals.

He declined to detail the threat that the security staff were searching for.

“There’ll be lots of speculation around what the intent was … but I don’t want to add to that,” Dutton told Nine Network television. “Our focus now really is making sure that people who are planning a terrorist attack are thwarted.”

Security has been increased at Sydney Airport since Thursday because of the plot and has since been increased in all major Australian international and domestic terminals.

Turnbull would not speculate on how long airport security would remain elevated. “They will be required for as long as the threat is assessed as requiring them,” he said.

Australia’s terrorist threat level remained unchanged at “probable.”

Australia is a staunch ally of the United States and partner in military campaigns in the Middle East. The Islamic State group has highlighted Australia as a Western target.

The plot was the 13th disrupted by police since Australia’s terrorist threat level was elevated in 2014. Five plots have been executed.

This article was written by Rod McGuirk 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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Building Traveler Satisfaction: Voices from the Front Lines of Corporate Travel

Skift Take: Most travel managers agree that traveler satisfaction is more of a focus now than it was even just a few years ago, as it’s becoming increasingly clear that it drives compliance, productivity, and overall employee engagement.

— Dawn Rzeznikiewicz

The importance of business traveler satisfaction and how it affects employee productivity and retention is becoming a major focus in today’s corporate travel industry. Traditionally, travel expense has been top priority for corporate travel managers and their procurement departments, but there’s been elevating concern over the last few years around how frequent business travel can lead to wear and tear, or “friction” on the traveler, and in turn, cost companies.

Traveler satisfaction means different things depending on the travel manager and the industry they work in. However, most travel managers are in agreement when it comes just how important traveler satisfaction is. The topic was discussed in-depth at the 2017 Global Business Travel Association Convention on the panel “Tackling Traveler Satisfaction: True Stories From Travel Managers.” As panelist Michael Robertson, Vice President, Americas Sales and Account Management at Egencia explained, “Without traveler satisfaction, engagement, usage, governance, duty of care, data insight and analytics, and savings quickly lose their value.”

Skift, in conjunction with Egencia, recently conducted a survey of more than 60 corporate travel managers to learn more about the evolving business travel landscape and how traveler satisfaction fits in. Respondents opted into the survey via Skift’s Corporate Travel Innovation Report newsletter.

In the survey, 51 percent of travel managers agreed that improving traveler satisfaction has become a bigger priority in the past one to three years, compared to 36 percent who said it’s stayed the same, and 13 percent who believed it hasn’t become a major priority yet, but will in the future. Despite the growing focus on satisfaction, 45 percent of travel managers said that cost savings has been their biggest priority in the past one to three years, compared to the 25 percent of travel managers who said that traveler satisfaction was their biggest priority.

Also on the panel, Priscilla Campbell, Global Travel Manager at Akamai, explained how to best manage when a company’s focus on limiting travel expenses has the potential to impede satisfaction. She warns, “When faced with the need for cost reductions, discretionary and high cost travel naturally fall on the chopping block. This means you need to be prepared with creative alternatives and positive messaging and be focused on creating an optimistic narrative, if or when the tides change at your company.”

When it comes to the frustrations that might hinder traveler satisfaction, disrupted and delayed flights, along with inconvenient booking tools are the most common, according to the survey. While there’s not much that travel managers can do to control flight disruptions, many travel managers want the mobile tools they provide their travelers with to be better equipped to manage such situations. Ninety-two percent of travel managers agree or strongly agree that business travelers want to book or manage travel across all of their devices, while another 90 percent agree or strongly agree that business travelers want to do even more with their mobile phones, such as check into a hotel and rent a car.

Understanding that business travelers are not all one in the same is also key to help ensure traveler satisfaction. Carly Jones, Senior Manager of Global Travel and Events at David’s Bridal was also on the panel at GBTA, and emphasized this point. “One size does not fit all. You need to understand the unique needs of individual travelers. That means finding solutions to help the store manager who’s a single mom, who may feel that traveling for business is going to add a lot of stress to her life––as well as the executive who’s looking forward to a four-star hotel stay and getting points on his credit card.”

Improving traveler satisfaction while keeping costs in check is undoubtedly challenging, but as new tools and technologies become available to help empower business travelers throughout the entire travel journey, it’s becoming increasingly easier to eliminate friction. To learn more about how travel managers are achieving business traveler satisfaction and thinking about other issues top of mind, download the Skift Insights Deck: “Bringing Humanity Back to Business Travel.”

This content was created collaboratively by Egencia and Skift’s branded content studio, SkiftX.

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Anbang May Be Forced To Sell Waldorf Astoria Hotel and Other Overseas Assets

Associated Press

Anbang Insurance Group, which owns the historic Waldorf Astoria hotel in New York City, may be forced to sell the hotel and it other foreign assets. Associated Press

Skift Take: Anyone want to buy a historic hotel in midtown Manhattan? The Chinese government’s desire to curb foreign investments may have a big impact on the U.S. travel industry and especially hotel companies.

— Deanna Ting

Chinese authorities have asked Anbang Insurance Group Co., the insurer whose chairman was detained in June, to sell its overseas assets, according to people familiar with the matter.

The government has also asked Anbang to bring the proceeds back to China after disposing of holdings abroad, said the people, who asked not to be identified because details are private. It is not clear yet how Anbang will respond, the people said.

“Anbang at present has no plans to sell its overseas assets,” the company said in a WeChat message. “Currently, Anbang’s various businesses and operations are all normal, and the company has ample cash and sufficient solvency capabilities.” A representative for China’s insurance regulator had no immediate comment when reached by phone.

Anbang was among the most prominent of Chinese insurers that went on a buying binge across the globe, fueled by soaring sales of investment-type insurance policies, with its 2014 acquisition of New York’s Waldorf Astoria hotel catapulting it into the public eye. Chairman Wu Xiaohui has been detained for questioning since mid-June, while the policies fueling its growth have been all but banned by regulators.

Several prolific Chinese buyers of foreign assets have come under regulatory scrutiny recently as leaders sought to limit capital outflows and clamp down on pricey, debt-funded deals. The other firms include Fosun International Ltd., HNA Group Co., Dalian Wanda Group Co., and the buyer of the AC Milan soccer club, whose acquisition loans have been under the scrutiny of the nation’s banking regulator.

At a twice-a-decade conference on financial regulation convened by President Xi Jinping this month, policy makers pledged to rein in corporate borrowing and said that preventing systemic risk was an “eternal theme.”

Anbang’s rise in recent years was fueled by sales of lucrative investment products that offered among the highest yields compared with peers. China’s insurance regulator this year started clamping down on what it termed “improper innovation” and tightened rules on high-yield, short-term investment policies. Anbang and other aggressive insurers such as Foresea Life got caught up in the crackdown.

One Anbang product, called Anbang Longevity Sure Win No. 1, boosted the firm’s life insurance premiums almost 40-fold in 2014 by offering yields as high as 5.8 percent. That helped provide fuel for the firm’s more than $10 billion of overseas acquisitions since 2014 and equally ambitious investing in the domestic stock market.

In October 2014, Anbang agreed to buy the landmark Waldorf Astoria in New York for $1.95 billion, a record for a single American hotel. Anbang bought real estate and financial services companies in Asia, Europe and North America, including the purchase of Strategic Hotels & Resorts as well as an office building in midtown Manhattan to house Anbang’s U.S. headquarters.

–With assistance from Zhang Dingmin

©2017 Bloomberg L.P. This article was written by Bloomberg News from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Altour Joins Travel Leaders Group in Latest Travel Agency Consolidation Move

Travel Leaders Group

Altour and Travel Leaders Group are planning to merge. Travel Leaders Group CEO Ninan Chacko is pictured here. Travel Leaders Group

Skift Take: The big are getting even bigger. The combined entity of Travel Leaders Group and Altour will be a strong competitor in the U.S. and abroad.

— Andrew Sheivachman

Consolidation has heated up in the travel agency space in recent years, but no move may be as impactful as a merger between Travel Leaders Group, one of the largest travel agencies in the U.S., and Altour, another major player.

Altour will be held by Travel Leaders Group Holdings, which owns Travel Leaders Group as well. With a combined $24 billion in annual sales between the two, the plan is to continue operating under separate brands with the same leadership. Financial terms of the deal were not disclosed.

Ninan Chacko will continue to run Travel Leaders Group as CEO while Alexandre Chemla, Altour president and CEO, will remain in his role. Chemla will also join Travel Leaders Group’s board and become a shareholder in Travel Leaders Group Holdings.

Both companies have successful corporate travel arms along with leisure and luxury divisions. Altour also has a strong presence in the UK, where it is one of the country’s most successful travel agencies, and has a strong general focus on luxury travel.

“Historically, as I think about our business, it’s got lots of different parts and pieces to it,” Chacko told Skift. “Two of the most interesting pieces are ProTravel and Tzell Travel; they index very heavily at a luxury level, they’re both corporate and leisure, and they have fascinating business models because they hugely embrace the independent contractor model. They distinguish themselves from our other units. In my fairly new perspective, in looking at the landscape there was probably only one other agency of size [doing the same thing]: Altour. It was really completing the trifecta for us of finding someone who had broadly the same characteristics: independent contractors, luxury, spanning leisure and corporate.”

Travel agencies combine or sell for a variety of reasons. Often, the aging owner of a successful agency wants to make some money before the market turns. Other times, combining can create a competitive advantage in the market based on commission earnings and marketing.

“There are agencies looking to expand through acquisition and looking to increase profitability,” said Robert Joselyn, a consultant and founder of TAMS, a service providing financial guidance to travel agencies, last year. “By combining volume, they may be able to generate more revenue from sales.”

Travel Leaders Group, the largest U.S. travel agency by volume and number of agents, is known to be extremely active in acquiring and merging with agencies, perhaps more than other players in the space.

Moving forward, a major focus will be on developing technology tools that can be used across both companies.

“Ultimately over time we see [the merger as allowing us to] create best-in-class programs,” said Barry Noskeau, executive vice president and chief operating officer of Altour. “More so, we see over time the importance of technology; technology is moving fast so quickly and it needs a tremendous amount of business investment.”

The separate companies, according to Noskeau, will retain their individual relationships with travel providers. He said the companies expect the merger to become official sometime in mid-August and each of the companies’ individual brands to remain intact. Sometime in the future, they’ll reevaluate their supplier relationships based on their new scale, though there is “no rush,” according to Chacko.

For Travel Leaders Group, the merger will help the company ease its way into the international marketplace. The company recently restructured, eliminating some of its brands, including the well-known Vacation.com.

International expansion is one Chacko’s priorities going forward, two years into his stint at Travel Leaders Group.

“When I first came onboard, an accurate word would have been opportunistic,” said Chacko, in terms of the company’s stance on acquisitions. “We’ve been more specific and directive in terms of where we want to put our focus. We’re not solely limited to the U.S. and definitely broadening our scope and screen in terms of geography. We’re really pleased with the complimentary aspect [of Altour] on the West Coast and in the UK. Our perspective and focus on international opportunities has probably existed independently [of this deal].”

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AccorHotels Finds Competing With Expedia Is Harder Than Expected

AccorHotels

Pictured is Accorhotels’ Pullman Bangkok King Power hotel. Separately, Accor’s CFO said an effort to add independent hotels to Accord websites has struggled to attract Web traffic. AccorHotels

Skift Take: The candid comments of the Accor CFO show just how difficult it is for hotel companies to compete with the big online travel agencies. You can’t do it half-heartedly and AccorHotels will have to decide how much effort it is willing to put in to the initiative.

— Patrick Whyte

AccorHotels plan to take on the likes of Expedia and Booking.com by opening up its booking platform to independent hotels appears to have suffered a setback.

Accor CEO Sébastien Bazin announced the “marketplace” initiative in 2015, saying: “We need to stop having the perception that the lowest price is on the online travel agent sites. We need to disseminate this truth.”

Marketplace brings independent hotels onto the AccorHotels platform and not only adds extra revenue through commission but also in theory would attract additional customers.

However, two years later and it appears as though AccorHotels is still searching for a winning formula.

Speaking after the release of its first-half results, Jean-Jacques Morin, the company’s chief financial officer, said that although there were around 2,000 hotels “onboarded” with a similar figure signed-up and waiting for implementation, the offering was not generating enough traffic.

“The issue that we have on marketplace is the traffic that is appearing at the AccorHotels website level because now we have the hotels but we need to increase the traffic,” he said.

Part of the problem, Morin said, was that last year the company had to spend a considerable amount of its marketing and digital effort looking after its own franchisees.

AccorHotels now has to make up its mind whether it will kill the program or push ahead, the latter of which would surely require an increase in marketing spending. The Priceline Group and Expedia spend billions of dollars each year with Google to drive traffic to their websites and their offering is already established. Expedia along increased its direct sales and marketing spend 25 percent in the second quarter to some $1.4 billion.

Morin said that AccorHotels now needed to decide how much effort it would put into publicizing the product “because today you’ve got the hotels but there are not enough people aware of it and hence the traffic is not at the level we would like it to be.”

First-Half Results

While AccorHotels’ attempts at becoming an aggregator might be faltering, the rest of the company is in good shape.

Revenue across the business increased by 34 percent to $1.1 billion (€922 million). The company said its slew of recent additions, including the likes of Fairmont, Onefinestay and John Paul had a positive impact of $194.9 million (€165.9 million). Net profit increased by 13 percent to $112 million (€95 million).

Bazin, said: “AccorHotels’ results for first-half 2017 are particularly solid. They reflect growth in our hotel business, the rapid integration of recently acquired brands, our persistently dynamic development and the ramp-up of our new businesses.”

AccorHotels is in the process of spinning off its owned hotels into a separate entity — a process many of its rivals have gone through. It will retain a stake in what it is calling AccorInvest but will at the same time look to raise funds by brining in others.

“The separation of AccorInvest into a standalone legal entity has been completed. Discussions about the opening of this business to outside investors are ongoing. Our pursuit of this growth strategy enables us to aim for another year of record growth in 2017,” Bazin said.

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Skift Global Forum Takes on the Restaurant Industry

Skift Take: Skift’s focus on guest experience encompasses all aspects of travel and hospitality, including restaurant dining. This year’s speakers are at the top of the industry, and best positioned to talk about its future.

— Rafat Ali

Just before last year’s Skift Global Forumwe announced our expansion into covering the food and beverage sector. Our plan was to bring you the big picture view on the future of dining out, just as we have done for the travel sector.

Since then we’ve acquired Chefs+Tech, brought on veteran journalist Kristen Hawley and put out a twice-weekly newsletter featuring news, innovation, and ideas concerning the modern restaurant industry.

And we’re excited that for the first time ever, we’ll be bringing these themes to life at Skift Global Forum in New York City, on September 26-27, 2017.

Register for 2017’s hottest event

Travel and dining out go hand in hand, and at this year’s event we’ll have a couple of key sessions exploring this intersection. You might have already heard that René Redzepi, founder and head chef of nomawill share his insight into the creativity, innovation, and forward thinking that have earned him international acclaim. During its 14 years on the Copenhagen waterfront, noma changed the tourism landscape of its city and country, putting Denmark on the map as an international culinary destination.

Since then, Redzepi has ambitiously created international residencies of the restaurant in Tokyo, Sydney, and Tulum, Mexico, focusing on ingredients local to each destination and further proving the power of food to drive tourism. In recent years, he has partnered with local and international chefs to open more restaurants in the Danish capital. His new noma concept is scheduled to open later this year.

We’re also thrilled to welcome Danny Meyer, CEO of Union Square Hospitality Group, to the stage this year. He’ll discuss the current state of the restaurant industry, the business of operating restaurants, and share his unique insight from over 30 years in the New York City hospitality industry. Meyer is not only the founder of Shake Shack, the reimagined fast food restaurant that’s gone global, he’s the operator of some of New York’s most beloved restaurants, including the recently reopened Union Square Cafe and the iconic Gramercy Tavern. Meyer has also pioneered a no-tipping policy at many of his restaurants, a program that has seen great results so far.

Don’t miss your opportunity to see one of our first on-stage forays into the business of dining out. As we continue to grow and expand, our promise to you will remain the same. Skift Global Forum will be unlike any other event you’ve ever been to, and will always include today’s leading innovators in travel, restaurants, and beyond.

Secure Your Spot

We couldn’t bring our event to life every year without the support of our incredible sponsors: Accenture, AIG, Amadeus Airlines, American Express, Button, Criteo, Fareportal, ITP, KDS, Mapbox, SmartlingSojern, The Points Guy, and Travelsify.

To become a sponsor or for any other questions you may have, email forum@skift.com.

 

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

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