Luxury Is Evolving But Consistent Themes Connect Old and New

Pullman Hotels and Resorts

At Pullman Hotels and Resorts, the morning can start with room service as seen for guests on January 11, 2017. Pullman Hotels and Resorts

Skift Take: This evolution of luxury will require brands to adapt products and experiences consistent with consumers’ new definitions of quality, comfort and elegance.

— Samantha Shankman

With so much changing in the luxury consumer mindset, many marketers and executives are naturally curious about the difference between the values of today and those of the past. That’s why it may be a relief to discover luxury continues to be defined by many long-standing characteristics like quality, comfort and elegance.

In the new Skift Trends Report: The Luxury Evolution, these three attributes emerged as the qualities most consistently associated with luxury from survey of more than 12,000 people across five global markets.

Quality

Quality is one of the major tenets of luxury, but its expression is shifting away from the opulent toward a more authentic conception of quality – one in which we place more value on a hand-crafted product with its own unique story.

In other words, quality is no longer simply a standard of an item measured against similar things. In today’s luxury consumer environment, the relevant comparison is less often against another external product and more often against who we were in the past. It is an attribute that we are looking to embody through relationships with high-quality brands — brands that deliver goods and experiences that help customers fulfil their desires to becoming higher quality people. Quality therefore, as it is understood today, is not necessarily the most expensive, but it does have a newness, a good story, and a sense of innovation.

Luxury consumers are drawn toward brands that communicate a purpose beyond existing just to sell something. Brands are positioning themselves as platforms to show travelers a new perspective of the world and developing experiences and messaging that illuminate their individual place within a global context.

Quality lends itself to comfort, on a physical and psychological level.

Comfort

The luxury value of comfort is no longer only the thread count of the sheets, but the sensation that you are in a safe place. Its expression is shifting from the tactile to sensual.

The prodigious horsepower and exquisite shape of the Bugatti Chiron relays comfort of the most luxurious kind because of the quality of design embodied at an aesthetic and mechanical level, and the pride one feels from owning such a prestigious vehicle. A Loro Piano Cashmere sweater will keep one physically warm as well as feeling confident and stylish. There is no doubt that you will sleep well on the bed of a Ritz-Carlton suite, but you will also feel cared for by the staff, and psychologically comforted by the backing of a global brand that’s spent years developing meticulous standards of quality and service.

Consumers’ desire for physical and psychological comfort is further compounded in today’s environment by the permanxiety of our current sociopolitical and economic realities. Skift has declared this the Age of Permanxiety, with consumers enduring a barrage of worries about terrorism, security, neo-isolationism, racial tension, technology and its adverse role, the widening economic gap, culture wars, climate change, and other geopolitical and local issues.

Luxury’s promise in this age of destabilization is to be an antidote to this anxiety. Think of a time when you looked at a beautiful photograph of a beach, or even beautifully-designed restaurant, and felt a sense of calmness come over you, an assurance that tranquility and beauty do exist and one day you would arrive there — physically or spiritually.

Today’s luxury brands can capitalize on that feeling.

Luxury brands want to bestow a sense of psychological comfort from the moment you open your web browser to research a luxury product until after the experience is done and you feel safe within your memories of it. In all phases of the purchase cycle, from inspiration to research to purchase and post-purchase, luxury brands are relaying a sense of psychological comfort from the affable tone of the customer service representation to the thick monogrammed envelope in which your receipt appears.

However, luxury brands must ask themselves whether today they can exist in a sensory deprivation cocoon. Can one market safaris to Western Africa without taking a stand against President Trump’s (brief) ruling to allow elephant trophies in the U.S.? Or sell wedding rings without celebrating Australia’s legalization of same-sex marriage?

Luxury brands today face the challenge of balancing comfort and adventure and play with this delicate juxtaposition of tranquility and thrill, relaxation and risk every day in its marketing. The duality of a being a luxury brand in a turbulent times requires brands to offer something more.

Elegance

One step beyond comfort is elegance.

Elegance is perhaps the most nebulous of concepts that luxury brands attempt to epitomize. Whereas elegance once referred to the ambience of a five-course meal, the curvature of the stairway at the opera or the impeccable service at a five-star hotel, today luxury can be better expressed through the ease with which we experience the world. How seamlessly a car arrives with a tap of the button, the sincerity of a master chef describing his field-to-fork philosophy, or the serenity that comes with knowing the concierge can be trusted with the planning.

We’re not implying that physical elegance exhibited by superior craftsmanship, refined taste, and superior materials are not important. But the concept of elegance has grown to encompass its physical and abstract presentation. Taking it a step further, elegance can refer to a state within ourselves, the actualization of our idealized self which is both poised and productive, composed but committed, enjoying while excelling.

Ryan Wolkov

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The Rise of Luxury Outposts on Mainstream Cruise Ships

Norwegian Cruise Line

The Haven Courtyard onboard a Norwegian Cruise Line ship. Cruise company’s have tried to accommodate luxury passengers on mainstream ships Norwegian Cruise Line

Skift Take: Will a traveler who only expects the finest ever decide to board a mass-market cruise ship? Well, the marketplace has spoken and it says, “Maybe, but only under certain conditions.”

— Laura Powell

Cruise ships catering to thousands of passengers at a time have always had a variety of choices when it comes to room products: inside cabin, outside cabin, suite. But these are merely different rooms offered at varying price points.

On the other hand, some mass-market cruise lines are now doubling down on a strategy of creating segregated luxury outposts, where guests can hide away from the crowd and experience top-notch service, exclusive amenities, and privacy.

Oversized suites in these sections come complete with private concierge and butler services. Other amenities may include private pools, restaurants, lounges, and observation decks. On a typical ship with around 2000 staterooms, special sections usually house in the neighborhood of 70 to 80 suites.

Norwegian Cruise Line (NCL) was the first to bring the concept of a ship within a ship to fruition. After Hong Kong-based Star Cruises bought NCL in 2000, some of the ships that had been on order to cater to the Asian market were delivered instead to North America. These new ships came with 5,000 square foot garden villas.

“At first, we thought we might not get the dollars per square foot, but we kept them, as their existence made a statement,” said Andy Stuart, NCL’s Chief Executive and President.

After a few years in operation, though, NCL discovered the rooms made both a statement and plenty of money.

The success of the garden villas caused the line to take a closer look at the affluent market, where it noticed a gap.

“The luxury cruise ships were designed for older travelers. They were more sedate ships that puttered around the world for two weeks or more. We thought there might be demand among affluent couples and families looking for more fun, for nightlife, for entertainment,” said Stuart.

The Haven concept was introduced on NCL’s Jewel ships in 2005. Aside from a collection of suites, each area had a private courtyard, a pool and a private concierge. By 2010, a new and improved Haven concept added a private bar and restaurant to the mix. At this point, ten of the line’s 14 ships have a Haven, with suites selling for about 25 percent more, according to Stuart, than the highest-priced cabin in the main section.

In the meantime, Switzerland-based MSC Cruises introduced its Yacht Club concept ten years ago, when its Fantasia class of ships started sailing out of Miami.

“We wanted to develop a ship within a ship to attract luxury travelers who usually go to Silversea. We started with a separate environment with limited number of suites, plus a private lounge, pool, and butler service,” said Roberto Fusaro, president of MSC North America.

The concept evolved so that Yacht Clubs include a dedicated restaurant, plus extra amenities such as private in-suite shopping opportunities and exclusive shore excursions. Fusaro said that compared to the best cabin in the main section, “prices in the Yacht Club can be 50 to 100 percent higher, a price point competitive with luxury cruise lines.”

But the question is, why would luxury travelers opt for a huge ship when the Regents, Silverseas and Seabourns of the world cater specifically to their every need?

Kimberly Wilson Wetty is co-owner of Valerie Wilson Travel. Her agency’s clients tend to prefer luxury ships because “they are more personal and intimate (generally housing in the neighborhood of 400 to 600 guests), and more likely to be filled with like-minded people.”

Wilson Wetty isn’t at all convinced her clients would ever travel on their own on a mass market ship, even if ensconced within a special section. However, she does see a large opportunity when it comes to multi-generational trips. Grandparents who are accustomed to cruising in luxury can do so, while other generations of the family with tighter budgets can opt for lower-priced cabins elsewhere on the ship. A trend that also chimes with MSC’s Fusaro.

“Our experience as we grew the Yacht Club is that the extended family segment is a very important segment for us. It’s an interesting niche that passengers were telling us they needed – that they couldn’t invite their families on a luxury cruise ship,” he said.

The fact that the bigger MSC ships have special programming for kids, plus features ranging from aqua-parks to Formula 1 simulators, makes them more suitable for generational sojourners.

For Stuart, multi-gen is a significant part of the Haven’s client base, but certainly not the only one. He believes the ship within a ship concept may also appeal to luxury travelers new to cruising.

“There’s a whole segment of older luxury travelers who haven’t cruised because the only choice was the traditional luxury lines. They didn’t want the homogenous crowds and more sedate environments that luxury ships offer,” he said.

In addition to appealing to these more active older travelers, Stuart said the Haven attracts younger luxury travelers, some of whom have children who enjoy the amenities of the mass market ship. As Fusaro pointed out, “When they cruise, they can duck in and out of the big-ship experience and have children entertained for the week.”

According to Wilson Wetty, in today’s society, the mass market is looking for entry-level luxury.

“More people are craving private access and exclusivity.  So, these areas provide a great opportunity for mass-market cruisers to step up to the high end.”

Both Stuart and Fusaro agreed that the refuges give regulars a chance to trade up.

“We want to keep our clients for as long as possible,” said Stuart.

After all, offering a more exclusive option as a client moves up the travel food chain budget-wise, can help keep loyalists on board.

Ryan Wolkov

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JFK Airport Is Getting an American Express Centurion Lounge

American Express

A rendering of the Centurion Lounge that American Express plans to build at New York JFK, opening in early 2019. American Express

Skift Take: Insiders often say airport real estate is some of the most expensive in the world. This is likely a massive investment for American Express, but the company has probably calculated it’s worth it. People love airport lounges, and American Express knows it needs to keep its customers happy.

— Brian Sumers

American Express, which uses a network of luxury airport lounges to help it attract and retain high-spenders, often in larger markets, soon will open its first club at New York’s John F. Kennedy International Airport.

The company announced it Tuesday, promising its largest-ever Centurion Lounge in Terminal 4, shared by Delta Air Lines and more than 30 international carriers. It will have more than 19,000 feet on two levels, and should open by early next year.

“We chose our locations based on where our cardmembers travel the most,” Josh McKay, vice president and general manager for global benefits and services at American Express, said in an interview. “We have chosen JFK because New York City is the No. 1 location we see our card members traveling to.”

The Centurion lounge is perhaps American Express’ most effective tool to win wealthier, travel-focused cardholders, willing to pay the high annual fees for cards. The Platinum card costs $550 per year, while the more exclusive Centurion costs $2,500 plus a $7,500 initiation fee, according to American Express’ website. Cardholders get many perks, but McKay called lounge access, “the No. 1 travel benefit in the eyes of our customers.”

A decade ago, American Express had a near lock on high-end cardholders. But in recent years, Chase, Bank of America and Citibank have sought to attract the same consumers with travel-focused cards. The most formidable competitor is probably Chase Sapphire Reserve card, introduced in August 2016, which is especially popular among younger customers.

The three big competitors do not have their own airport lounges, however. Instead, they contract with existing lounges and lounge networks, such as Priority Pass, so cardholders can access clubs at most airports.

American Express also has contracts with Priority Pass and existing lounge operators — cardholders can access Delta lounges when flying Delta, for example — but its the American Express Centurion clubs tend to be more popular. They’re often more opulent, — with gourmet food, complimentary bar and shower suites —than traditional airline or third-party operated clubs.

The JFK lounge, according to American Express, will also include “special new features” to be announced later.

American Express now has nine lounges, though it has yet to build one in Chicago or Los Angeles, and has only one one, in Hong Kong, outside the United States. McKay said American Express is looking to add more lounges abroad and in the United States, but while at one point it had teased a new lounge for Los Angeles, none is imminent.

“Los Angeles remains an attractive target for us,” he said.

Ryan Wolkov

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Yotel Expands Into Branded Residences With an Extended Stay Element

Yotel

A rendering of the YotelPad in Park City. Yotel is launching the new YotelPad as a brand that caters to extended stay travelers and people looking for vacation condominiums or branded residences. Yotel

Skift Take: We have our reservations (pun intended), but if the popularity of pod-like hotels is any indication, perhaps this might just work for YotelPad and its experiment in reviving the condo hotel concept.

— Deanna Ting

Yotel, the hotel company known for its compact rooms and its penchant for a high-tech guest experience, is bringing its expertise to a new sector: branded residences that will be marketed for extended stay travel.

Yotel CEO Hubert Viriot has long sought to create an entity such as YotelPad, which might be considered a hybrid of an Airbnb and an old-school hotel. He sees YotelPad as a solution for travelers who need a stay that’s longer than two or three nights.

“It’s a natural extension for our brand,” Viriot told Skift. “We’ve been very focused on very short stays for the past four years, with YotelAir at airports and with Yotel in cities. They specialize in two- to three-night stays maximum, and they’re designed for busy travelers looking for efficiency and being on the move, jumping form one city to the other.”

But Yotel realized that its current hotels might have lost customers who were looking for longer stays.

As the CEO of Raimon Land PLC, a Thailand-based real estate developer, from 2009 to 2013, Viriot helped develop ultra-luxury condominiums.

“I always thought we should do the same at a very affordable price,” Viriot said. “My super luxury customers hardly even used the facilities. What if I brought this to a younger generation that’s dynamic and wants to be in the right location, but can’t afford the big price of central London or New York City? I’m sure it would fly. The idea had been with me for years. When I was invited to take over Yotel, I thought, ‘I have to do this one day.’”

It was Yotel’s multiple developer partners who convinced Viriot and his team that this idea could indeed become a reality, taking the brand’s guiding design principles and applying it to condominiums.

The first property, a branded residence in Park City, Utah, is scheduled to open in December 2019, with four other residences in the works in Dubai, Miami, and Geneva Lake, Switzerland, where there will be two.

Condo Hotel, Extended Stay Hotel, or Branded Residences?

To be frank, the messaging around this newest Yotel brand is very confusing and muddled, making it difficult to define exactly what YotelPad is. All we can surmise is that it is, essentially, a condo hotel that accommodates extended stay guests.

When Skift spoke to Viriot by telephone, he said, “With the Park City YotelPad, it will be condos and some will come back into the rental pool. In other cases, it’s more traditional extended stay. We have both formulas available. The objective is the ability to achieve both.”

That statement suggests there will be some projects, such as the Park City YotelPad, that will be purely condominiums or branded residences, and other projects that would operate just as any other extended stay hotel brand would.

Additionally, the marketing materials Skift received with details about the new brand use the term “extended stay” and “longer stay” several times.

But in a later conversation with Yotel’s vice president of brand, Jo Harrington, she said the majority of the brand’s initial developments will primarily be condo hotels, or branded residences. That means that the individual units will be sold to owners, either individuals, corporations, or institutional investors, and then those owners have the option to put those units into the rental market on any platform they choose.

When they do book their units, these owners will also pay a commission to Yotel for servicing/managing their units. And in marketing those units, it appears that Yotel will be marketing these condominiums to an audience of extended stay guests.

Harrington said, “It’s not extended stay hotels. It’s for the extended stay market. It’s for anyone who wants a longer stay. The vast majority of the projects we’ll do are ones where you own an individual unit. There may be some pockets in the world where we don’t do that, however. The projects we’re working on now, like Park City and Miami, [are ones where] owners will be able to buy those units. The Miami project will be on top of the hotel [a Yotel hotel property, as part of a mixed-use development.] Where we have a hotel [and we have these types of units], we may brand them as YotelPads and they may not be individually owned.”

This concept, also known as the condo hotel, is not new to the accommodations industry.

“Extended stay and branded residences are not new,” said Mark Skinner, a partner in the Highland Group, a lodging consulting firm based in Atlanta. “It’s a condo hotel. It’s been done before. Because they are residential condos they have kitchens and they are capable of catering to an extended stay guest. It’s like an apartment, but it’s owned and put back into a rental pool. There’s nothing new about that. This trend peaked in 2006. There are examples of that all around the country and they are branded.”

For that reason, Skinner thinks the company could be taking a risk with this new brand.

“It’s a big jump in the positioning of the brand to go from what Yotel is known for and getting into extended stay and condo hotels,” he said. “The condo hotels have very much gone out of favor. To be successful they would have had to have worked both as a condo and as a hotel so a lot of them were developed on the basis that the sale of the condos would provide revenue for the hotel side and it didn’t always work. What happens if the condo sales don’t go as projected?”

Skinner said that if Yotel wants to give YotelPad a fair chance to succeed, it would be better to ensure that its individual YotelPad properties are either solely an extended stay hotel or a branded residence project.

“It’s easier to manage if they keep branded residences and extended stay separate and also, from a zoning standpoint, you could probably develop that on residential land if you only do branded residences,” Skinner said. “If you rent out rooms for less than 30 nights you may run into some zoning challenges in some areas.”

A rendering of the kitchenette area of a YotelPad in Park City. Source: Yotel

Thinking Small

There are, however, some features that make YotelPad a compelling brand to watch, whether you’re talking about extended stay or branded residences.

The first is the fact that YotelPad’s rooms are much smaller than typical branded residences and extended stay hotels. A standard “Pad” is approximately 215 square feet and goes up to about 570 square feet for some larger units to accommodate up to six people.

The tech-driven rooms, Viriot said, maximize the space with smart design and flexible, even mechanical furniture. This includes Yotel’s adjustable and foldable SmartBeds, en-suite bathrooms, fully equipped kitchenettes, a Technowall, and storage space. Communal areas include a 24/7 gym, bike and gear storage, Amazon lockers, laundry, a home cinema, library, and a Club Lounge for co-working, meetings, and entertaining guests.

“You can retract the beds and move furniture depending on what usage you need them for. The room can turn into a lounge area during the day. The dining space can become more of an office. The combination of an app, smart devices, and mechanical furniture allows us to move things around easily makes the Pads exceptionally multifunctional and very user friendly,” Viriot said.

Viriot and his Park City developer partner, Replay Resorts, don’t see the smaller rooms as being a hindrance.

Todd Patrick, director of marketing and sales for Replay Resorts, said he thinks there’s a desire for small but efficient homes like the ones Replay is building with Yotel because of “what’s happening in the prefab movement, or the tiny home movement.”

“Big homes are becoming things of the past,” Viriot said. “I’m exponentially confident about that. We see the same trend all around the world for exponential growth of micro homes, or the tiny home movement.”

Why is he so confident? Viriot said, “For various reasons, one being purely real estate and congestion of cities but also because of new generations who have very different lifestyles and prefer living in small places in good locations close to city centers. There’s now much more acceptance of smaller places. We’ve already seen it with the Yotel brand in hospitality and the same applies to longer stay accommodations now, too.”

Yotel isn’t the only brand to be experimenting with smaller rooms. Other brands doing the same include Pod Hotels, Marriott’s Moxy Hotels, and Ian Schrager’s Public Hotels.

Smaller living areas, Viriot said, benefit from good design and quality. “It needs to have that quality and experience element and that’s why I think we have such an opportunity with this brand, to apply what we’ve learned in the hotel business and bring it to extended stay.”

However, Skinner remains skeptical about how these smaller rooms will manage to appeal to extended stay guests. “You can’t get a kitchenette in a 250-square-foot room. You have to add on a little bit to that. Even the economy extended stay product out there is larger than that.”

Bringing Affordable Luxury to the Condo Hotel Market

The smaller unit sizes also impact another defining feature of YotelPad: its relative affordability. Launching YotelPad lets the company branch out into urban markets and even into resort destinations, as the first YotelPad in Park City demonstrates. And it’s in these more established leisure destinations where a brand like YotelPad can offer a more “affordable luxury” type of experience that’s in stark contrast to the multimillion-dollar branded residences that you might usually find.

“In some hotels, you can buy a condo and feed it back into a rental pool and that’s been around for a while, but it’s been privy to luxury condominiums,” Viriot said. “Why should it only be for the super-luxury hotels of the world — only for Four Seasons or St. Regis? Why can’t we bring this experience and bring the price down significantly lower to a much larger and younger crowd?”

The price range for a YotelPad unit in Park City, Patrick said, will likely range from $250,000 to $350,000, which can be half the price of other condominiums for sale in the area.

“I don’t know of anyone doing this type of extended stay hotel model at that economy price point that Yotel does,” Skinner said. “In extended stay, the majority of travelers are business travelers. Economy extended stay does very, very well in the U.S. for sure and elsewhere where it’s present. But there are not a lot of economy extended stay properties in urban areas because the development costs are too high to appeal to that traveler.”

When it comes to pricing, Viriot said it’s too early to state specific rack rates for the rentals, but that “The idea is to be very competitive with what you may find on Airbnb and being much more in line with that market segment than your typical serviced apartment. The projects are just being launched, so it’s premature for me to put a price on it.”

Viriot said he thinks the brand has cross-generational appeal, but will be attractive first to “younger generations who don’t see the need of having a very large apartment, or someone who values community more than the real estate.”

Tech-Driven Pads

Viriot said Yotel has spent quite a bit of time examining the guest experience for a YotelPad, ensuring that it stays true to the company’s overall brand DNA but also works for longer stays.

Controlling much of the guest/resident experience is the YotelPad app, which acts as a digital concierge, as well as a digital key. Yotel said guests can use the app to order amenities and food to go. But beyond the app, Yotel is also working on enhancing the technology behind the guest experience.

Viriot said the company is “also working closely with a number of tech companies to get our Pads ‘smart’ in so far as the utilization of lighting, temperature control, and sound.” He said, “We’re also looking at how we can connect and how we utilize voice control to control those Pads.”

One item to note is that YotelPad has no connection to Yotel founder Simon Woodrroffe’s Yo! Home, which boasts a similar emphasis on building space-saving homes that utilize mechanical furniture.

“We are not involved in Yo! Home and I think it’s very interesting,” Viriot said. “The only commonality is that the founder of Yo! Home is the former founder of Yotel. It’s a much more residential project, and it’s much more U.K.-focused rather than being a global brand [like YotelPad].”

The Next Big Disruption in Longer Stays?

Aside from expanding Yotel’s reach, this move helps the brand remain competitive. Viriot sees YotelPad serving as a disruptive — and needed — force in the traditional extended stay and branded residence markets. He added that Airbnb’s impact on the entire lodging industry is not lost on Yotel and the development of this new brand.

“Airbnb disruption is also one of the reasons why we decided to go into this segment. It’s a source of inspiration to some extent,” Viriot said. “With the growth of Airbnb and how it’s disrupting the entire rental market, I always thought, ‘what’s missing?,’ You’re never sure of what you are going to get with Airbnb; you rely on pictures on the site and there’s generally no service and no experience because you’re on your own. With YotelPad, we could build something to take that into account. You know what you are going to get. … It’s something I have been thinking of for a long time, and YotelPad might have just put that all together and hopefully, I am right.”

Viriot said that most traditional extended stay product consists of “very large and very luxurious” accommodations, but that they “lack experience.” Because of that, traditional extended stay is finding it challenging to compete against offerings like Airbnb.

“The only thing an extended stay can do better than Airbnb is about serving and providing services and an area to develop a sense of community,” Viriot said. “That’s why there’s still huge potential in the extended stay segment. It needs to be more affordable and more flexible and the element of the community is critical. At the end of the day, what customers are looking for is an experience. With YotelPad, we inverted the rules. The studios or pads are very compact and very well designed and we invest a lot into the communal areas.”

The extended stay market is indeed changing, and pivoting more toward approaches that emphasize communal living or even co-living as an answer to the popularity of platforms like Airbnb and HomeAway.

Extended-stay hotels are also a particularly bright spot in the hospitality industry, with demand at record highs in the U.S. Extended-stay hotel demand growth outpaced the change in supply in the most recent third quarter in 2017, according to The Highland Group.

Skinner said, “Occupancy in extended stay hotels has been in record territory for four to five years now in the U.S., despite thousands and thousands of rooms being added. The fundamentals for extended stay are very good because the economy is expanding, jobs are being created, and there’s a lot of construction going around all across the country.”

He said that the industry’s focus on experiential lodging is “definitely growing” and that it adapts well to the extended stay experience. “Extended stay lends itself to that because you are there in the neighborhood for a long time, because you’re there on an extended assignment,” he said.

One thing that YotelPad will not be, however, is an experiment in co-living, Viriot emphasized. He said he still believes that people still prefer to have their own living quarters and the option to decide what they want to share in the community.

“You have your own Pad, and there’s not someone else with you in there. It has everything you need — a kitchenette, bathroom, etc. but you can open the door and access the communal areas and decide when and where you want to share and co-live,” he explained. “We purposefully made this decision.”

A Closer Look at YotelPad Park City

YotelPad Park City’s developer, Replay Resorts, is a resort developer whose executive team was formed from Intrawest, a leading destination resort developer that was influential in developing the ski resort of Whistler, among others. It was Replay’s decision to work with Yotel to bring YotelPad to Park City as a branded residence concept.

“We had this idea of bringing what’s happening in the urban market, the micro concept, and bringing that to the resort market,” said Patrick. “Hot resort destinations in North America are expensive for ownership and they are becoming unaffordable. With YotelPad, we’re bringing affordability and reinventing, in some way, resort living.”

Patrick said Park City is easily one of the largest and most accessible ski resorts in all of North America and because the resort hasn’t seen much condo development in recent years, now seems like the optimal time to launch a product like YotelPad and to “revitalize” parts of the resort.

In developing the Park City property, Replay’s Patrick said “every inch has been planned” and it was important to them that the property be close to the main gondola, as well as close to amenities such as bars, restaurants, and shops in the ski village. Just as important were the indoor and outdoor amenities that the residences will have, including outdoor fire pits, a hot tub, a Club Lounge, fireplace hearth room, games area, gym, and terrace. All units are fully furnished.

People who choose to buy a unit at the YotelPad Park City can choose to live in it 365 days a year or they can rent it out whenever they choose to. It’s a very similar concept, in fact, to the one being used at Niido Powered by Airbnb whereby residents are encouraged to rent out their apartments on Airbnb when they are not using them and, when they do, the landlord, Niido, benefits with a commission.

Skinner said that Airbnb’s partnership with Niido is something the entire lodging industry should be paying close attention to, and that Yotel would do well to take note of what Airbnb is doing with those apartment-hotels, which are scheduled to open later this year.

“Airbnb is a wonderful booking engine,” Skinner said. “Their name alone will draw people to their website … I think that them branding a building, from a marketing standpoint, is a very good idea. There’s no reason that Yotel couldn’t leverage their own brand on extended stay accommodation, too”.

Patrick said that he thinks the YotelPad concept will appeal to many markets, and that Replay has plans to bring the concept to other resort locations in the future.

Can YotelPad Succeed?

We won’t know until the first YotelPad opens in 2019 if the brand will prove to be successful but, not surprisingly, Viriot and Patrick are optimistic about its prospects.

Given Yotel’s recent $250 million in investment from Starwood Capital, Viriot thinks the company’s overall future is bright, and especially so for YotelPad, which was already in development prior to Starwood’s investment.

“Starwood Capital also has its own extended stay brand, but it’s positioned very differently,” he said, referring to Uptown Suites. “But it shows they are also big believers in the extended stay space, as we are. They gave us confidence to go deeper into it.”

A Yotel expands its brand portfolio to three, he said a loyalty program is “also in the works” but that it won’t resemble the hotel loyalty programs we’ve become accustomed to. Instead, it’ll be more like a customer resource management system.

“We will come up with our own program,” he said. “Having loyal customers is key and for me it means having program that allows us to recognize them and personalize their stay and give them immediate rewards rather than never-ending point accumulation.”

And to market the new brand, Viriot said the team is focused on digital marketing. And for distribution, well, he’s open to a number of channels, including Airbnb.

“We might use online travel agencies. Will we put them on Airbnb? I don’t have the answer yet, but I’m thinking about it with a smile,” he said.

Advertising YotelPad on Airbnb certainly aligns with a larger strategy that Airbnb is currently pursuing, as it attempts to bring more traditional accommodations — hotels included — onto its platform.

As for the future of YotelPad, Viriot said, “I’m passionate about how our business is being disrupted and how residences via apps like Airbnb everything are changing. I think this brand, YotelPad, has enormous potential because it ticks boxes from so many perspectives. It’s so flexible. It might be the ultimate hybrid between a hotel and a residence.

“Having said that, and as passionate as I am, I haven’t set a specific target for it. When I speak to my owners and developers they all like it a lot. We already have the first five or many, and many more will be announced soon. You never know — it might be our largest brand, but I don’t want to jinx ourselves. Let’s start with five and see what happens.”

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European Tourism Had One of Its Best Years While U.S. Had One of Its Worst

Dan Peltier  / Skift

European tourism made a rebound in 2017. Pictured are tourists walking the Royal Mile in Edinburgh, Scotland. Dan Peltier / Skift

Skift Take: Europe’s 2017 tourism story is nearly the opposite of its 2016 downward twists and turns. It wasn’t a perfect year and some destinations on the continent are still struggling, but it’s also a sign that many Europeans are choosing to travel closer to home to stick to their budgets.

— Dan Peltier

After economic shocks and terrorist attacks roiled Europe in 2016, international visitor arrivals made a notable comeback in 2017, making it the strongest year for the region’s tourism in seven years.

By contrast, according to the latest international tourism data from the the United Nations World Tourism Organization, the number of international visitors to the U.S. is expected to drop compared to 2016.

Asia-Pacific has had some of the highest growth rates in tourism arrivals for the past few years, with regions like South Asia (10 percent) and Southeast Asia (8 percent) showing high growth rates. Southern and Mediterranean Europe (13 percent) was the region with the highest growth rate and raw numbers in the world last year, increasing from more than 228 million to more than 258 million visitors. North Africa also saw 13 percent growth, but its increase was from a much smaller number — 18.5 million to nearly 21 million.

Western Europe, which includes some of the world’s most visited countries such as Spain and France, had 7 percent growth in arrivals after having virtually no growth in 2016.

Europe, the world’s most visited region, had about 51 million more tourists last year than it did in 2016 (671 million compared to 620 million, respectively), and the region as a whole grew 8 percent year-over-year.

The Americas was the weakest world region for tourism growth last year at 3 percent. South America led the way with 7 percent growth, but North American only saw 2 percent growth. That resulted from strong demand in Mexico and Canada but a decrease in arrivals in the United States, historically one of the world’s most visited countries (see chart below). Some travel industry organizations like the U.S. Travel Association feel that President Donald Trump’s anti-immigrant rhetoric and policies are partly to blame for the poor performance but that a stronger U.S. dollar is also at play.

The U.S. Department of Commerce has said that international visitor arrivals were down 4 percent through July of 2017, the latest month for which it has released information. The UNWTO said its results are based on preliminary data as reported by destinations and estimates for figures not yet reported.

Overall, some 1.32 billion people crossed international borders and made overnight trips to destinations in 2017, a 7 percent increase over 2016. That growth is above the 4 percent growth rate for each year since 2010 and a sign that any downturn from Brexit or terrorism, for example, wasn’t long-lived. That means that of the 89 million additional people who traveled internationally in 2017, more than half (57.3 percent) of those arrivals went to Europe. And many European destinations appear to not only have recovered from losses that marked the past two years, but also exceeded previous visitor records.

U.S. Travel Association CEO Roger Dow said in an interview last month that one reason for the general growth in European tourism could be the rise of European low-cost carriers incentivizing travelers with low fares to regional destinations they feel they can’t pass up.

UNWTO Secretary-General Zurab Pololikashvili, who took office earlier this month for the 2018-2021 term, said in a statement that results were partly shaped by more positive global economic trends and strong outbound demand from many traditional and recovering source markets such as Brazil and Russia.

After a year filled with examples of citizens, particularly in Europe, protesting against overtourism and crowded city centers and infrastructure, Pololikashvili also acknowledged that tourism shouldn’t be a zero-sum game. “Yet as we continue to grow we must work closer together to ensure this growth benefits every member of every host community, and is in line with the Sustainable Development Goals,” he said.

The goals were adopted by the United Nations in 2015 and include three tourism-specific measures such as ensuring that tourism growth leads to job creation and to take steps to protect the environment from any negative impacts from tourism.

The UNWTO projects that international tourism arrivals will grow by 4 to 5 percent in 2018 and that the momentum from last year will continue. But if recent history has been any guide, there are too many factors such as currency or security concerns that could either inflate those numbers or cause them to spiral down.

INTERNATIONAL TOURIST ARRIVALS BY REGION IN 2017

Numbers are in millions

Region Arrivals in 2016 Arrivals in 2017 Percent Growth
Europe 620 671 8.00%
Northern Europe 79.7 83.6 5.00%
Western Europe 179.6 192.1 7.00%
Central/Eastern Europe 131.8 138.3 5.00%
Southern Europe 228.6 258.3 13.00%
Asia-Pacific 302.9 324 6.00%
Northeast Asia 153.9 158.5 3.00%
Southeast Asia 113.3 122.3 8.00%
Oceania/Australia 15.6 16.6 7.00%
South Asia 20 22 10.00%
Americas 200.9 207 3.00%
North America 132.2 134.8 2.00%
Caribbean 25.1 26.1 4.00%
Central America 10.9 11.3 4.00%
South America 32.7 34.9 7.00%
Africa 58.2 62 8.00%
North Africa 18.5 20.9 13.00%
Sub-Saharan Africa 39.6 41.5 5.00%
Middle East 53.6 58 5.00%

 

Source: UNWTO

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Airbnb Follows HomeAway’s Lead By Not Requiring Full Payments in Advance

Airbnb

Airbnb is now allowing guests to pay less up front when booking an accommodation on its platform. Airbnb

Skift Take: As the professionalization of homesharing progresses, adding a payments feature such as this makes a lot of sense.

— Deanna Ting

First came split payments for groups. Now it’s flexible payments.

Today, Airbnb announced a new and more flexible payments policy called Pay Less Up Front. Now, when people book an accommodation on the Airbnb platform that costs $250 or more, they have the option of first paying a deposit — generally 50 percent — and then paying the remainder closer to their check-in date.

To qualify, bookings must also be made at least 14 days prior to the check-in-date. If a guest can’t fulfill the second payment, his or her booking will be automatically cancelled.

Before this new feature, users had to pay 100 percent of the cost of their Airbnb accommodation up front.

Flexible payments in the homesharing and vacation rental space, however, aren’t anything particularly new. For instance, sister companies HomeAway and VRBO, both Expedia-owned, offer this type of flexible payment option. But by adding this feature, in addition to offering split group payments, Airbnb is making its platform particularly appealing to cash-flow sensitive travelers.

Airbnb said it decided to add this feature primarily because it not only benefits guests but hosts, as well. In its testing of flexible payments, the company found that 40 percent of its guests, if given the option, would choose to pay less up front and pay the remainder later, and when they did, they would generally opt for higher-value accommodations.

In other words, with Pay Less Up Front, guests would spend more on their Airbnb stays, generating more revenue for hosts, and for Airbnb, too. For every booking made on its platform, Airbnb collects a three to five percent fee from hosts and a five to 15 percent fee from guests.

Airbnb also said that it found that with this payment feature, customers made bookings with nearly double the lead time, meaning hosts were able to confirm and manage their bookings more easily. This feature also helps guests who may have been previously wary of booking a particular listing further in advance because of having to pay 100 percent up front.

Cancellation policies, of which Airbnb has three standardized versions, will not be impacted if a guest pays with the deposit, the company said. So, if a guest who uses Pay Less Up Front cancels his or her booking, that should not have an impact on how much the host collects. Airbnb said that its hosts don’t receive payment until approximately 24 hours after a guest checks in; the company collects both the deposit and the final payment prior to check-in. The company also said it will honor the payouts specified in the cancellation policies that a host has instituted.

What happens if a guest fails to make his or her second payment will also depend on the cancellation policy that a host has chosen. An Airbnb spokesperson told Skift that, generally, if the second payment falls through, Airbnb will follow up with the guest to request another form of payment and the guest will have approximately 72 hours to resubmit another form of payment to keep the booking. It’s not clear, however, if there are additional ramifications for a guest who misses his or her final payment.

Andrew McConnell, CEO of Rented.com, which helps homeowners find rental managers for their vacation homes, said this new feature seems like an all-around win not only for Airbnb hosts and guests but for Airbnb, too.

That’s, of course, if this payments policy change indeed leads to the increase in bookings that Airbnb envisions.

“It’s a win for the host because more bookings mean higher occupancy and revenue,” he said. “It’s a win for guests, especially since there’s no financing fee. It seems like a no-brainer even if you are a billionaire to only put a portion down instead of the whole thing. And for those guests who are cash-strapped, this could be the difference in being able to make the booking or not. And it’s a win for Airbnb because more bookings and lower upfront costs mean happier customers, more repeat customers, more bookings, and thus more booking fees.”

McConnell said this symbolizes the “maturation of Airbnb as well as of the industry” as some differences between hotels and homesharing get diminished.

“[Airbnb] really becomes more and more of a good substitute for hotels,” he said. “When you book a hotel, unless you do prepaid non-refundable rates, you don’t’ have to put anything down and it makes it much easier to book a room. When people feel more comfortable booking, they book more frequently. That’s more revenue for booking channels, and more money for hosts because they get more people coming in. For guests, it gives them that piece of mind. It also opens up travel more for people who may not be sitting on a lump sum today but need to plan vacations more ahead of time.”

While many hotels require guests to pay for the cost of their accommodations when they arrive at the hotel, more and more hotel brands are also, interestingly, adopting tougher cancellation policies.

An Airbnb Host’s Perspective

While industry experts like McConnell see this flexible payment option as a win-win situation for both Airbnb guests and hosts, one host said she’s not entirely convinced. Melanie Meharchand, an Airbnb host based in Monterey, California, who lists two properties on Airbnb, said that while she understands how this can be beneficial for hosts, there may also be “some downsides,” too.

She expressed concerns over how flexible payments might impact cancellation policies, adding that it might lead to some confusion for hosts.

“The availability settings in the system even for a host are so complicated right now that sometimes it’s very hard for hosts to figure out how much they get paid once something is paid,” Meharchand said. “You don’t know exactly at the end of the day how much you will get paid.”

However, Airbnb disagreed with this notion. “This doesn’t impact the way — how, when, or how much — a host gets paid at all,” an Airbnb spokesperson said. “Hosts won’t notice a difference, except perhaps they are getting longer stays and bookings secured further out, which hosts like.”

Still, Meharchand isn’t so convinced.

“It could mean that payments paid partially in advance or two weeks before or in combination with a cancellation policy could mean that hosts could not have any payment at all,” Meharchand said. “[Hosts] may be making time for a guest who may not ultimately end up making a booking. There’s very little compensation for hosts with Airbnb’s move toward a penalty-free cancellation policy.”

Meharchand also wondered about the flexible payments introduction given current hotel industry trends.”It’s interesting that Airbnb is doing this when you see other hotel companies moving toward stricter cancellation policies,” she said.

The ability of hosts to screen potential guests has been diminished, Meharchand said. There are two sides to that proposition though: While that can be a good thing because it reduces the likelihood of discrimination, it can also be a bad thing for hosts who want to know more about who is staying in their homes.

“If Airbnb thinks this feature will help people pay for properties they might not otherwise have been able to afford because they are paying in two installments, that puts a red flag in my mind,” she said. “We might be getting groups who might not be able to afford a property and might be less careful about a property. Part of the credit card system and having to pay everything in advance just meant you got a higher quality of guest overall. Airbnb could be opening itself up to slightly more risk with lower-quality guests being able to book. The screening mechanisms for hosts are being taken away.”

Flexible payments, Meharchand believes, is one of many steps the company is taking to make it easier for people to book a stay on Airbnb, and one of those includes the company’s push toward expanding Instant Booking on its platform. Of its more than 4 million listings worldwide, more than 1.9 million are instantly bookable, including Meharchand’s two listings.

“I did opt into Instant Book for both of our listings,” Meharchand said, “because the penalty for not being in Instant Book is that you are far less likely to get booked on.”

Said Meharchand: “Making homes more accessible by easier payments schemes is great, and it’s part of a whole scheme to make homes more accessible, but it can also be worrisome for some hosts because it reduces hosts’ ability to screen guests for people who would be appropriate for our homes.”

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Launching: Skift Table Daily Newsletter

Skift Take: Don’t miss out on all the news you need to better understand the business of dining out.

— Jason Clampet

Today Skift Table is taking its newsletter daily for our nearly 10,000 subscribers.

The Skift Table Daily newsletter covers the latest news, ideas, trends, and most relevant and interesting stories of the day. Like our travel coverage, Skift Table looks at changing consumer behavior in the industry — in this case the business of dining out.

We announced the change to existing subscribers earlier this month and began offering people the opportunity to hear from us five days per week or just once, on Wednesdays. To subscribe to either list, visit our subscription page.

What to Expect

Daily content is made up of Skift Table originals and stories syndicated from Bloomberg and the Associated Press coupled with the best of the industry and consumer media. What matters to us is that the headlines and stories deliver great insight into how people in the industry do their jobs and the technology, innovation, and ideas that will move the industry forward.

Our perspective on the business of dining out is broad, and is informed by the experience we’ve had remaking how the travel industry views itself through a Skift lens. We tackle topics such as how people are choosing where to eat, which in-restaurant technology really matters, and how restaurateurs make the small decisions that net big impact.

The Wednesday newsletter, which both Daily and Weekly subscribers will receive, dives deeper into three or four top and timely issues as you’ve come to expect from our previous coverage. All of the newsletters will arrive in your inbox every day at 10am EST. You can find many of our stories at table.skift.com, too.

Contact Skift Table senior editor Kristen Hawley at kh@skift.com regarding stories or email our GM Jason Clampet with any business suggestions, ideas, or feedback at jc@skift.com.

Subscribe now to the Skift Table Daily

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Smart Speakers and Hotel Rooms Aren’t an Easy Fit

Skift

A Google Now and smart refrigerator adveritsement outside CES 2018 in Las Vegas. Skift

Skift Take: Technology companies are embedding smart speakers into all kinds of household devices, ranging from toothbrushes to refrigerators. A strong use case for hospitality, however, has yet to emerge.

— Andrew Sheivachman

Smart speakers powered by artificial intelligence could be reaching the apex of their hype cycle.

Vendors displayed dozens of them at CES 2018 in Las Vegas last week, with many embedded into household devices instead of standing alone as a consumer product.

In the hospitality space, smart speaker adoption has been limited. Wynn Las Vegas, for instance, added an Amazon Echo unit to each hotel room in early 2017, while chains like Best Western and Marriott have also installed units in a small number of hotels.

There are still many issues, however, that hinder the proliferation of smart speakers in a hospitality environment.

Foremost is ensuring the privacy of guests. There have already been scandals based on errors causing smart speakers to constantly listen in to the conversations around them, and problems like these give hoteliers pause.

Josh Weiss, vice president of brand and guest technology at Hilton Hotels and Resorts, told Skift that while his team is constantly experimenting with voice controlled devices, the company as a whole is more focused on using the Hilton Honors app as a digital tool instead of voice control.

He likened the security concerns with smart speakers to installing a webcam for meetings in hotel guest rooms. Even if the camera is off, or physically covered, a guest will still feel like their being monitored with the device in the room.

Marriott, on the other hand, plans to make a wider push using smart speakers and voice control technology.

The fragmented nature of hotel ownership, branding, and franchising is another obstacle. Hotel owners simply may not be willing to make the investment for 200 or 500 Amazon Echo devices with no clear path towards monetization, even if their brand is touting the devices.

The process of installing devices, as well, is different for every hotel; older hotels may not have the information infrastructure to handle the devices, while new-build properties do but may prioritize other aspects of the guest experience.

Even if a hotel brand claims to have installed these devices in dozens of hotels, it’s hard to see a path forward toward widespread adoption without a clear case for return on investment, particularly when hotels can use that money toward renovations and other products improvements.

The Connected Future

There’s also the reality that consumer devices like Google Home and Amazon Echo don’t interface with back-of-the-house hotel systems.

Sensors can tell a hotel whether a room is occupied, for instance, and lower the temperature to save on energy costs. Soon guests will be able to establish a profile including their preferred room temperature and what time they’d like to wake up in the morning, which will be reflected automatically in their room. Automation has the capability to become a powerful tool for hoteliers in the future.

Hotel technology startups, however, are working on hardware that bridges the divide between guest-facing tools and behind-the-scenes technology.

“Hotels are hard,” said Michael Cohen, head of business development for Angie Hospitality, because the kinds of devices that are ending up in homes don’t really meet the needs of hoteliers.

The guest room device from Angie Hospitality, which is being deployed in hotels in the U.S., provides guests with a private, secure Wi-Fi connection along with voice control capabilities for their room and searches powered by artificial intelligence. The system can also provide voice-over-internet-protocol phone connections, essentially replacing the traditional phone in a guest room.

On the hotel end, the device can connect into hotel back-end systems governing energy management, revenue management, and housekeeping. Hoteliers will have visibility into guest preferences and be able to better tailor the hotel experience to guests based on data.

The vision is to allow hotels to create a customized experience for guests, perhaps suggesting a hotel’s restaurant instead of nearby local options or providing customized content for conference attendees.

But given the scale of the global hospitality industry, it seems like the voice controlled future is still in its nascent stages.

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Travel Startups Work With Breakthrough Technologies That Could Threaten Industry Leaders

Consumer Technology Association

The latest in augmented reality and virtual reality was on display at CES 2018 in Las Vegas. Consumer Technology Association

Skift Take: Emerging technologies, like artificial intelligence and blockchain, have yet to make the leap from buzzword to mainstay, but have the potential to disrupt travel incumbents. The big players will have ample opportunity to adapt, though, and leading startups can play a role in helping executives grapple with when and how to implement these technologies.

— Seth Borko

Venture capital companies invested a record amount of money — $5.3 billion — in travel startups in 2017. In its latest report, Skift Research analyzes the rapidly evolving market for travel startups and their venture capital backers.

Breakthroughs in artificial intelligence, blockchain, virtual reality, and other technologies threaten to pressure and even unseat long-time incumbents. However, startups working in these areas often face challenges both in commercializing their tech and in convincing a sometimes-skeptical audience.

Startup founders in these emerging technology fields should work on bridging the knowledge gap, ensuring that there is real value in their products and services, and then attempting to get C-Suite buy-in at larger corporations.

Last week we launched the latest report in our Skift Research service, Venture Investment Trends and Startup Opportunities in Travel 2018.

Below is an excerpt from our Skift Research Report. Get the full report here to stay ahead of this trend.

Skift’s state of startups survey asked which technology was likely to be most disruptive to the travel industry.

Artificial Intelligence and the closely related field of machine learning/predictive analytics topped the list. These technologies continue to advance and are poised to disrupt a wide range of industries.

Going to the source: where startups see the greatest technology potential

Source: Skift + Amadeus State of Travel Startups Survey

Preview and Buy the Full Report

Close behind was blockchain technology, which has been the spotlight this year as the technology underpinning for virtual currencies like bitcoin. However, we expect that much of the true innovation will come not from the currency itself but from the protocol’s ability to decentralize areas such as distribution and contracts. Legacy IT systems could be left behind if they don’t adapt.

Bonny Simi, president of JetBlue Technology Ventures, agrees. She sees potential from distributed databases and smart contracts around payments, distribution, and loyalty systems. A smart contract is a self-executing, self-enforcing contract embedded in software. In this context, a smart contract could perhaps be used for programming automatic settlements.

Virtual and augmented reality also had a strong showing in our survey and are likely to play a large future role in travel. Erik Blachford, venture partner at TCV and former CEO of Expedia, observes that no one has yet “figured out how to integrate … higher-order functions [like virtual and augmented reality] into the travel experience.”

Despite the potential of augmented reality and virtual reality technologies, many established players indicate that implementation is not on their current roadmaps.

What will be key here, as with all new tech, said Simi, is a continued effort to bridge the cultures of new companies and legacy giants. “It’s hard for them to grasp a new economy and new ways,” she said, regarding organizations that have been in the industry for decades and rely on older technology.

Preview and Buy the Full Report

Despite the potential of augmented reality, virtual reality, blockchain, and voice-based search, for that matter, the success of these technologies and the startups going to market with them is far from a foregone conclusion. We find that many travel executives are hesitant about their potential. For instance, almost half of those we polled were not sure when, if ever, they would incorporate blockchain into their business models. Yet, just seven percent said that they would “never” integrate blockchain into their tech stacks. We believe that most are waiting to see a stronger use case for these new products before committing.

The travel tech roadmap: executives most uncertain about blockchain, VR/AR

Source: Skift Research

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This is the latest in a series of research reports, analyst calls, and data sheets aimed at analyzing the fault lines of disruption in travel. These reports are intended for the busy travel industry decision maker. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 200 hours of desk research, data collection, and/or analysis goes into each report.

After you subscribe, you will gain access to our entire vault of reports, analyst calls, and data sheets conducted on topics ranging from technology to marketing strategy to deep-dives on key travel brands. Reports are available online in a responsive design format, or you can also buy each report a la carte at a higher price.

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British Airways Finally Improves Its Catering — Business of Loyalty

British Airways

British Airways is improving its catering on long-haul routes. This comes after the airline had cut what customers received on some routes. British Airways

Skift Take: After so much bad news for passengers flying on British Airways, there’s finally a bit of improvement coming to the airline — but only for international travelers.

— Grant Martin

An upgraded meal service is coming to British Airways, reversing a long campaign of cuts to the airline’s in-flight experience.

The upgrade is focused on long-haul economy service, for the cabin it calls World Traveller. Starting January 17, in what the airline says is a “multi-million pound investment,” passengers will be served an improved, four-course meal while upgraded snack baskets will be circulated throughout the flight.

Some of the improvements include replacing the plastic water cup served with the meal with a bottle of water and upgrading the second meal to a pizza wrap.

For many, the catering improvements can’t come soon enough. Under Alex Cruz (a CEO hired from Spanish low-cost carrier Vueling) and amid tight competitive pressure, British Airways has cut dramatically over the last few years. On short-haul flights, the carrier stopped giving free snacks last year, choosing to sell packaged goods from Marks and Spencer. That move initially irritated travelers but enraged them when the carrier started regularly running out of food.

Cabin design has also suffered. British Airways recently confirmed it will introduce a series of ultra-dense cabins on short-haul flights with seats that don’t recline, leading many to compare the airline directly to the low-cost carriers premium travelers despise.

In addition, British Airways is moving to a revenue-based loyalty program this year, meaning some frugal but loyal flyers may earn fewer points than before.

Perhaps to counter some of the negative sentiment regarding its brand, in November the airline embarked on a campaign to return to the “glory days” of air travel. Among other improvements, British Airways committed to expanding Wi-Fi, adding new aircraft, and improving catering. 

Despite the renewed effort, it remains to be seen whether the improvements are enough to curry favor with travelers.

Most major carriers in the United States invested heavily in catering through 2017, taking some of the profits generated from ancillary fees and relatively cheap fuel to strategically upgrade meals on high-value routes. So while British Airways may have improved catering, it still won’t be better than the competition.

— Grant Martin

Skift Stories and More Expert Insight

Bag Fees Were the Most Successful Airline Business Model Change of the Past Decade: In the past decade, airlines have successfully convinced flyers to pay for everything from seat assignments to checking bags. But some of their most loyal customers are fuming.

The Airport of the Future May Evolve From Transport Hub to Attraction: It’s not happening fast enough for many travelers, but many of the world’s airports have over several years morphed into community spaces, where travelers can spend time in a yoga room, beer hall, butterfly garden, or children’s playground before they fly.

Airlines Turn to Private Messaging to Avoid Social Media Blowups: Nothing has made airline social media managers more nervous over the past decade than a Twitter rant from a customer with hundreds of thousands or even millions of followers. But even the most angry travelers are more often taking complaints directly to airlines and bypassing public forums.

World’s Busiest Air Route in 2017 Was to Tiny Island Off South Korea’s Coast: The world’s busiest air route isn’t London to Paris or New York to Los Angeles, but the trip between Seoul and a tiny island off the coast of South Korea.

IHG Changes Best Rate Guarantee Policy, Gets Rid of Free Nights: IHG made changes to its terms and conditions, completely changing its Best Rate Guaranteed policy. According to the new policy, guests who successfully submit a Best Rate Guarantee claim will now get a varying number of IHG points rather than a free first night.

Silvercar Launching Audi Q5 Service: Silvercar, an upscale car rental company owned by Audi, announced a new addition to its premium family: the Audi Q5.

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