The U.S. Air Traffic Control System May Not Be Broken After All

Cliff Owen  / Associated Press

In this Sept. 27, 2016, file photo, FAA Air Traffic Controllers work in the Dulles International Airport Air Traffic Control Tower in Sterling, Va. A new report from the GAO refutes claims that drastic air traffic control reform is necessary.
Cliff Owen / Associated Press

Skift Take: Expect a heated fight to privatize the U.S. air traffic control system as the Sept. 30 deadline for refunding the FAA approaches.

— Andrew Sheivachman

Efforts to upgrade the U.S. air-traffic system are on budget and steadily improving flight efficiency, a government watchdog has found, contradicting assertions by President Donald Trump and airline executives.

Just as the House is set to debate a bill that would separate the air-traffic system from the Federal Aviation Administration, a Government Accountability Office report requested by lawmakers shows that the existing system is performing well, undercutting one of the chief arguments by proponents of the change. The report was obtained prior to its release by Bloomberg.

New technology allowing airliners to fly more precise routes into major cities has saved airlines millions of dollars in fuel, the report found. In Atlanta, a separate FAA program bringing planes closer together allowed Delta Air Lines Inc. to increase daily operations by 6.8 percent.

The report is sure to become fodder in the debate over whether to split FAA’s air-traffic division into an nonprofit corporation, which is part of a House bill setting policy for the aviation agency that supporters hope to put up for a vote in coming weeks. The bill is needed to extend FAA’s funding and tax authority, which expires on Sept. 30.

Trump endorsed the air-traffic split in June, when he said the FAA had squandered $7 billion on new air-traffic technology and called the current system “a total waste of money.” A stream of airline executives have made critical statements about FAA, in speeches and congressional testimony, calling the agency’s current system outmoded.

Slow Motion

The sponsor of the bill, Pennsylvania Republican Representative Bill Shuster, has said one reason the changes are needed is because the FAA has been slow to adopt new systems.

The GAO’s findings are closer to those of the private-plane lobby, which has argued that the existing system has performed well and that there’s no need to create a private air-traffic organization.

The FAA is in the midst of a decades-long effort known as NextGen to improve the air-traffic system, allowing planes to fly closer together and incrementally reducing delays. It’s based on a suite of new technologies that will use more precise satellite data to track planes, replace some radio calls with email-like text messages and spread weather and other data more quickly through the system.

The report isn’t entirely positive for FAA. It notes that some efforts to make the air-traffic system more modern have had to be shelved and some early estimates of benefits were overstated. It also chronicles some earlier failures at FAA to modernize its system, which prompted the GAO in 1995 to put it on a “watch list” of high-risk federal programs.

Better Coordination

In recent years, however, the agency has done a better job of working with airlines and other in the aviation industry to prioritize where improvements are needed, and it hasn’t suffered any of the massive failures of earlier decades, according to GAO. The reviewers said they spent almost two years looking at the FAA and interviewed 34 aviation experts outside the agency.

The FAA is on schedule to at least accomplish its basic goals by 2025 and expects to do so within cost estimates from a decade ago, GAO said. The system is projected to cost the government $20.6 billion, including at least $5.8 billion that’s already been spent. Airlines and other aircraft owners will have to spend $15.1 billion to add new equipment to planes, GAO said.

Some of the challenges the GAO said the FAA faces in adopting the new technology may be cited by proponents of putting air traffic under a private organization. One of the chief issues FAA has encountered is a steady funding stream, according to the report.

The agency had to delay work on some programs in 2013 when its budget was slashed by automatic cuts known as sequestration. It has also had difficulty planning because Congress has repeatedly failed to pass bills outlining long-term strategy and budgets for the agency, according to GAO.

In the run-up to the debate on the House bill, a number of reviews of FAA have been issued and not all were positive. On Aug. 15, the Department of Transportation’s Inspector General concluded the FAA’s estimates of benefits from NextGen were “overly optimistic.”

In spite of Trump’s support, Shuster’s plan to put the air-traffic organization under a nonprofit corporation has faced intense opposition. The Senate Commerce Committee, which is drafting its own FAA legislation, won’t include the measure because too many senators in both parties oppose it, Chairman John Thune, a South Dakota Republican, has said.

©2017 Bloomberg L.P.

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Managing Business Traveler Anxieties in an Era of Global Uncertainty

Skift Take: It’s important to look at the challenges that come with managing business travel and traveler concerns when global turmoil is the new normal.

— Dawn Rzeznikiewicz

Travel managers are facing new sets of challenges as global risks––whether terror, climate, or health-related––seem to be increasing year after year.

Perhaps unsurprisingly, such events are affecting the ways business travelers themselves feel about their travel experiences. A 2016 survey from the Association of Corporate Travel Executives (ACTE) and Business Traveller found that two out of three travelers agree that there is a psychological effect on either them or their families when traveling to a region where they may not feel safe. The survey also found that 56 percent of business travelers were moderately to severely anxious about a terrorism threat during business travel, while 58 percent were more anxious than they were the previous year.

A 2016 survey from the Global Business Travel Association (GBTA) also looked at how business travelers feel about safety risks while traveling. According to the study, business travelers overwhelmingly perceive terrorism as the greatest concern they face on the road, with almost half ranking it as their top concern. The poll also found that more than half of business travelers feel safer traveling domestically for business than internationally, and that 40 percent of business travelers now book lodging at only approved hotels due to concerns about terrorism.

As Arnaud Le Masne, vice president, global sales & emerging markets at Egencia told Skift, “I spent the whole year talking about risk management. Things are different today compared to a few years ago. It almost seems like a major event happens every few days, whether in Stockholm, Manchester or Paris. Travelers are more eager to get information, and they’re much more anxious.”

Fortunately, travel managers are taking these concerns seriously. When ACTE asked respondents, “Is terrorism and unrest changing duty-of-care concerns in your organization?”, 44 percent of travellers and 51 percent of travel professionals said their organizations have made duty-of-care changes. And when GBTA asked travelers if they feel their organization cares about their safety when traveling for business, 91 percent agreed or strongly agreed.

A recent survey of travel managers conducted by Skift on behalf of Egencia also found that safety and duty-of-care concerns were top of mind for travel managers. When asked if they’d be willing to incur a higher cost for travel if it meant keeping their travelers safe during their trip, 28 percent agreed that they’d be willing to increase their spend within 10 percent of the hotel rate cap, while another 11 percent said they’d be willing to do so within 25 percent of the hotel rate cap.

Carly Jones, senior manager of global travel at David’s Bridal, agrees that she’s seen this new era of global uncertainty influence her concerns about traveler safety. “Focus on duty of care has moved up on the list for us. Unfortunately in our day and age it’s not ‘if’ but ‘when.’”

Terrorism and other global crises can never be fully anticipated or avoided. However, travel managers who proactively work to understand these risks, address the concerns of travelers themselves, educate travelers on procedures and policies, and better equip travelers with the right technological tools and preparations and precautions they should take before embarking on a business trip can help manage the risks travelers face and help alleviate the anxieties they may have.

To learn more about how travel managers are thinking about ensuring the safety of their travelers in an era of global uncertainty, download the Skift Insights Deck: “Bringing Satisfaction Back to Business Travel.”

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

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Hurricane Irma Is Poised to Erode Florida Beaches all Over Again


The U.S. Army Corps of Engineers just finished a $12 million project to rebuild some of Florida’s prettiest shoreline, including this stretch in Miami-Dade. Hurricane Irma is likely to inflict new damage. Bloomberg

Skift Take: Beach erosion won’t be the top concern if Hurricane Irma deals a direct blow to Florida. But the condition of the coast will be a long-term issue for the tourism-fueled state.

— Hannah Sampson

Six months ago, the U.S. Army Corps of Engineers finished a $12 million project to rebuild some of Florida’s prettiest shoreline. About 220,000 cubic yards of sand was poured onto tourist-friendly stretches of world-famous Miami Beach, widening it to 230 feet. It’s part of a 42-year-old federal program designed to combat gradual erosion and ensure there’s a buffer between inland communities and the leading edge of tropical storms.

Scientists will tell you that beaches and their shoreline cousins—wetlands, mangroves, bays, and sounds—are always on the move. They live at the whim of tides, winds, rivers, and waves. There have always been lovely beaches, historically speaking, but they haven’t always been where the iconic Fontainbleau hotel now stands in Miami Beach. This geographic reality didn’t hit home until people laid down beach towels, put up resorts, and cut navigation inlets.

As Hurricane Irma careens into Miami Beach’s neighborhood, the recently completed project is emblematic of the increasingly expensive chasm between what beaches are supposed to be, and what vacationers and property-owners want them to be. And global warming is fast expanding that gulf.

It only becomes “erosion” when you want to keep something the way it is, according to Robert Young, director of the Program for the Study of Developed Shorelines at Western Carolina University. He and other experts call changing shorelines just “shoreline change,” because it’s never going to stop. Proponents of fighting nature, meanwhile, call battling erosion the more healthy sounding “beach nourishment.” The problem with beach nourishment though is that it gets consumed—sometimes quickly.

“It’s not uncommon for a beach nourishment project to disappear—very shortly after it was placed—in a big storm,” Young said. “This happens all the time.” Like last year, when Hurricane Matthew brushed away a $30 million restoration project in South Carolina that was completed in 2014, stripping sand away from a shoreline called—wait for it—Folly Beach.

Accelerating sea-level rise and intensifying storms are speeding up erosion

There’s a slow-burning tension inherent in local economies built on disappearing beaches. Hotels build near the sand so guests will stay. The Corps or local authorities rebuilds beaches to protect hotels and everything else behind and around them. “That is why the berm [Corps shorthand for dunes and beach] is there in the first place, for that catastrophic event,” said Laurel Reichold, project manager for the Miami-Dade County Beach Erosion Control and Hurricane Protection Project. “That’s what takes the brunt of the storm, so your infrastructure behind it doesn’t take that big a hit.”

This cycle, however, seals in a political dynamic that runs counter to nature, which has a tendency of winning in the end.

Florida, with its $109 billion tourism industry and a shoreline length second only to Alaska among U.S. states, leads the country in beach-fixing. Almost 500 projects have spread 293 million cubic yards of sand over its shores, at a cost of $2.4 billion in real dollars, according to a database of 2,000 beach nourishment projects going back to 1923. These days, there’s even an international sand trade, one that’s become more lucrative as beaches around the world are slated for face-lifts.

More of Florida’s beach communities may be joining that list soon. Current projections suggest that Hurricane Irma will dogleg right toward Florida this weekend, putting state’s lengthy shoreline squarely in its path.

Days before meteorologists could say with high confidence where the storm might hit, the Dade County erosion project had already assembled an emergency team. Vessels were prepared to survey the 13 miles of shoreline it’s charged with monitoring in the aftermath of a hurricane. Shoreline damage that meets certain criteria may qualify for federal funds to pay for more beach nourishment. Parts of Miami Beach received such emergency restoration work after Hurricane Andrew in 1992, and twice between 2000 and 2010 in addition to planned projects.

It would be tough enough for shoreline communities if erosion proceeded at the same pace as it did in the late 20th century. More serious challenges, including accelerating sea-level rise and intensifying storms, have greeted them in the new century.

The global average sea level is rising at about 3.4 millimeters a year, thanks to higher temperatures, which melt ice sheets and cause water to expand. The world’s oceans don’t rise uniformly, though: Water sloshes around the planet, creating “hot spots.” The U.S. East Coast below North Carolina’s Cape Hatteras saw an unusual sea level increase between 2011 and 2015, rising three times higher than the global average, according to University of Florida research published last month. In southeastern Florida between 2011 and 2015, sea levels rose six times faster than the rate measured between 1996 and 2010. Anomalies like these, though not a function of human-driven climate change, make an already bad situation worse for a part of the U.S. particularly susceptible to hurricanes.

For decades, beach communities, local and federal governments, contractors, sand merchants, and the Army Corps have worked to keep beaches where and how people have grown accustomed to them. Whether coastline restoration can continue in the face of rising seas, from the northern tip of Maine to the southern tip of Texas, remains to be seen.

Back in Miami Beach, however, they’ve already run out of sand. The most recent beach nourishment projects brought the precious stuff in from mines near Lake Okeechobee, Florida’s largest inland lake.

©2017 Bloomberg L.P.


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Emirates Is Not Ready to Commit to More Airbus Super Jumbos


Emirates, the world’s biggest long-haul airline, is holding out for assurances about the future of Airbus SE’s A380 program before committing to an order for more of the double-decker aircraft. Pictured is an Emirates A380 jet. Bloomberg

Skift Take: Emirates doesn’t want to be stuck with low-value planes but it’s also seeing an uptick in demand and may have less wiggle room to keep stalling its Airbus order.

— Dan Peltier

Emirates, the world’s biggest long-haul airline, is holding out for assurances about the future of Airbus SE’s A380 program before committing to an order for more of the double-decker aircraft.

While Airbus is pushing for a deal at November’s air show in Dubai, where the carrier is based, the concern that the value of used A380s will plummet if the slow-selling model is canceled represents a major sticking point, together with the current list price, Emirates airline President Tim Clark said in an interview Thursday.

“I know they would like us to do something,” Clark said in London. “At the moment we are not in that state of readiness. We need copper-bottomed undertakings that they would do everything they needed to do to keep the program going. We don’t want to be left with aircraft that have no value.”

Airbus announced in July that it will slash A380 production to eight jets a year in 2019, down from 15 this year and 28 in 2016, casting doubt over the model’s future. That plan won’t change even if the Toulouse, France-based aircraft manufacturer gets another purchase contract before the end of this year unless the number of planes bought was unexpectedly high, Chief Executive Officer Tom Enders said at the time.

Emirates is already the No. 1 superjumbo buyer, with 97 A380s in operation out of firm orders and commitments for more than 140 planes.

Enhanced Version

Airbus offered an enhanced version of the A380 in June featuring fuel-saving winglets, which combined with an already-announced layout revision accommodating 80 more people would shave 13 percent from costs per seat. Emirates is exploring the upgrade with a view to buying 20 more planes, though Clark — who originally campaigned for a more significant upgrade featuring new engines — has said he doesn’t need the extra capacity.

Emirates also needs to consider how to deal with its oldest 25 A380s, which are due to be replaced by the last 25 planes of its existing order. It’s possible that the original airliners, some of which the carrier owns, may be retained to augment capacity, Clark said.

Airbus was already planning to slow A380 production to one aircraft a month as of May 2018. The reductions outlined in July mean that the company is no longer breaking even on a per-plane basis. Airbus gave up long ago on recouping the program’s 25 billion euros ($30 billion) in development costs.

Clark, who spoke at the 2017 Aviation Festival, said that Emirates plans to reverse reductions in U.S. capacity over the next six to nine months. The airline cut flights earlier this year following a slump in demand linked to curbs that U.S. President Donald Trump’s administration imposed in response to concerns about terror threats and security standards at Middle Eastern airports.

Emirates aims to restore twice-daily flights to Boston, Los Angeles and Seattle and a daily service to Fort Lauderdale, Florida, Clark said. The carrier has scaled back capacity through the early retirement of more than 60 aircraft, the executive said, with others used to increase offerings to destinations including the African cities of Lagos, Abuja and Luanda.


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Taj Hotels Has a New CEO

Steigenberger Hotels AG – Deutsche Hospitality

Puneet Chhatwal has been named as the new CEO of Taj Hotels. Steigenberger Hotels AG – Deutsche Hospitality

Skift Take: Taj Hotels has been around for more than a century but the company remains a smaller player. No doubt The Indian Hotels Company hopes Chhatwal can help the group become an even bigger global player by growing its portfolio and brand recognition worldwide.

— Deanna Ting

The Indian Hotels Company Limited (IHCL), the parent company of Taj Hotels Palaces Resorts Safaris, has appointed a new CEO and managing director: Puneet Chhatwal.

Chhatwal is currently CEO of Steigenberger Hotels AG – Deutsche Hospitality, with more than 30 years of experience in the hospitality industry. He became CEO in January 2013.

Chhatwal will replace former CEO and managing director Rakesh Sarna, who submitted his resignation for personal reasons earlier this year in May.

N Chandrasekaran, IHCL chairman, said in a statement: “Mr. Chhatwal’s extensive experience in the global hospitality sector including his ability to drive performance, turn around assets and build great teams will be very valuable for IHCL as it looks to strengthen and expand its position in the market.”

“IHCL has some of the most iconic hotel properties in India and at key gateway locations across the world. I look forward to working with the talented teams in IHCL and under Mr. Chandrasekaran’s leadership of the Tata Group to take this iconic company forward,” said Chhatwal.

The Tata Group is the larger global conglomerate under which the IHCL is one of many companies and brands. The Taj Hotels group comprises nearly 100 hotels around the world, and the company recently announced in February that it was consolidating its three brands (Taj, Vivanta, and Gateway) into just one.


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U.S. Transportation Department Won’t Punish United Airlines Over Passenger-Dragging Incident

Pablo Martinez  / Associated Press

The U.S. Transportation Department won’t take punitive action against United Airlines over a passenger-dragging incident earlier this year. In this Tuesday, May 2, 2017, file photo, American Airlines Senior Vice President of Customer Experience Kerry Philipovitch, second from right, testifies on Capitol Hill in Washington, before a House Transportation Committee oversight hearing. From left are: United Airlines CEO Oscar Munoz; United Airlines President Scott Kirby; Joseph Sprague, senior vice president of external relations, Alaska Airlines; Bob Jordan, executive vice president and chief commercial officer, Southwest Airlines, and Consumers Union aviation consultant William J. McGee. Pablo Martinez / Associated Press

Skift Take: Consumers typically don’t like to see companies’ – and particularly airlines – bad behaviors go unpunished. While United didn’t break any laws it did break the trust it had with many travelers that it’s still working to regain.

— Dan Peltier

Federal officials decided not to punish United Airlines over an infamous incident in which a passenger was dragged off an overcrowded plane.

The Transportation Department said it found no evidence that United violated David Dao’s civil rights in the April 9 incident in Chicago. There was also not enough evidence that the airline violated rules regarding bumping passengers to take the case further, the department said.

A Transportation Department lawyer told United about the decision in a May 12 letter but didn’t make the matter public. An advocacy group, Flyers Rights, released the letter on Wednesday after obtaining it through an open-records request.

Paul Hudson, the president of Flyers Rights, criticized the lack of penalties against United and questioned how the Transportation Department could conduct an investigation so quickly. He called the manhandling of 69-year-old Dao “egregious in every sense of the word.”

Airline agents called O’Hare Airport security officers for help in making room on a United Express plane for four employees who were traveling to staff a flight the following morning in Louisville, Kentucky.

Video of Dao being yanked from his seat and dragged down the aisle was viewed millions of times.

In the two-page letter to United, Transportation Department Assistant General Counsel Blane Workie said the agency takes action when an airline repeatedly or egregiously violates consumer-protection laws. She said United fixed one mistake in calculating compensation for another passenger, and failed to give Dao and his wife a required written notice of their rights only because they had left the airport to seek medical help.

“Therefore, we conclude that enforcement action is not warranted in this matter,” Workie concluded.

She said the agency found no evidence that United discriminated against Dao, who is Asian-American, on the basis of race.

United avoided a lawsuit by reaching a settlement with Dao a few weeks after the incident. Terms of the settlement were not disclosed.

The CEO of United Continental Holdings Inc., Oscar Munoz, apologized for initially defending the airline’s handling of the incident and blaming Dao, who lost teeth and suffered a broken nose and a concussion.

The airline apologized for the incident again Wednesday and said it has made changes to reduce overbooking.

“This incident should never have happened and we are implementing all of the improvements we announced in April,” spokeswoman Megan McCarthy said in a statement. “While we still have work to do, we have made meaningful strides” and have reduced the bumping of passengers nearly 90 percent since May 1, compared with the same period last year.

Airlines are allowed to oversell flights. When they do, they typically offer travel vouchers to encourage some people to give up their seats. They can also bump passengers — force them off the flight — but there are rules and necessary compensation.


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Hipmunk Goes After Unmanaged Business Travel Market


Hipmunk CEO Adam Goldstein, left, and co-founder Steve Huffman. Hipmunk is finally wading into business travel a year after its acquisition by Concur. Hipmunk

Skift Take: Despite the initial denials, we always knew Concur would bring Hipmunk into business travel. It’ll be interesting to see how the Hipmunk brand changes once it becomes known for more than just leisure travel.

— Andrew Sheivachman

It was a bit of a surprise last year when hotel-search site Hipmunk, which had been struggling in the face of larger competitors, was acquired last year by SAP-owned corporate travel giant Concur. But it makes sense when you consider that user experience, which Hipmunk excelled at, is one of the biggest problems facing corporate booking tools.

Concur is looking to leverage Hipmunk’s consumer-oriented user interface through a new service for small businesses dubbed Concur Hipmunk. The revamped Hipmunk-infused site would let business travelers receive discounts and have their itinerary and expenses tracked by Concur.

The new service is being tested by Concur partners, essentially in a private beta, and is slated to be available to the public later this year. Initial content partners include Carlson Wagonlit Travel’s RoomIt, United Airlines, American Airlines, and Avis.

“This new product is a lightweight offering that brings together Hipmunk, TripIt, Triplink, and Concur Expense, and starts to introduce these small businesses to some of the value of a managed travel program,” said Adam Goldstein, co-founder and CEO of Hipmunk. “It sits right on top of the consumer experience, which will work the way it always has.”

The new service has been in the works for nearly a year. Users of Concur Hipmunk would receive discounts from Concur partners on flights and hotels, after logging in with their Concur account, and bookings would be tracked through Concur’s existing tools. They can also use Hipmunk’s chatbot to make bookings and have information from their calendar integrated onscreen during the booking process, so they can make smarter decisions choosing a hotel. The goal, basically, is to ease the pain points experienced by small business employees when they travel while still enabling them to book their own travel without any kind of travel policy.

What signing into Concur will look like in Concur Hipmunk.

Bookings made on airline and hotel sites by business travelers would also be automatically populated in expense and itinerary management apps, as well, like they would for any other Concur traveler.

The unmanaged travel space for small businesses has received a lot of attention in the last year, including the launch of Jay Walker’s Upside. The expense management field, similarly, has undergone consolidation with an eye at unseating Concur as the top provider of expense solutions.

At the time of Concur’s acquisition of Hipmunk, the company claimed it had no plans to turn Hipmunk into a business travel company. Concur has a history of acquiring consumer travel tools, like itinerary management tool TripIt, and allowing them to languish after being integrated into Concur’s travel management stable.

Hipmunk, according to Goldstein, is still actively refining its technology and offerings for consumer users.

Concur is looking to solve the problem of attracting smaller companies into the fold, even if they don’t have the need for a more stringent managed travel program that would necessitate using Concur Travel.

“The problem is that while we firmly believe Concur Travel and one of our preferred travel management company partners is the best travel solution for our customers, we found that there are tens of thousands of small businesses that are not ready for a fully managed travel program yet,” said Tim MacDonald, Concur’s chief product officer. “It’s our largest and fastest-growing segment. For years our travel management company partners have been trying to sell managed travel into that segment, and they say they’re just not ready for it.”

There’s also the reality that travelers from small businesses are used to booking themselves with online tools and may not want to use a dedicated corporate booking tool. Concur Hipmunk essentially meets these travelers halfway by combining the consumer booking experience with the perks of a more robust corporate travel program.

“The biggest difference with travelers doing it themselves is that they’re particularly sensitive to how much headache they go through to book,” said MacDonald. “When you’re an individual who is left to himself to handle all of this stuff, you’re just overwhelmed by choices. If you only look in one place, you don’t know if the options you see are most convenient. It creates a huge burden through the paradox of choice.”

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Hotel Impossible Host Explains Why It Pays to Book Direct

Taylor Glenn  / Travel Channel via Associated Press

Anthony Melchiorri, the star of Travel Channel’s “Hotel Impossible,” says it’s always better for consumers to book directly with a hotel rather than on a third-party site. Taylor Glenn / Travel Channel via Associated Press

Skift Take: Hotel industry to Melchiorri, for his advice on direct booking: preach.

— Deanna Ting

You’d think a guy like Anthony Melchiorri, host of Travel Channel’s “Hotel Impossible,” would settle for nothing less than luxury hotels when he travels.

But Melchiorri, entering his seventh season as the fixer of failing hotels, says he’d just as soon stay in a roadside motel if it’s got good reviews online.

“Those are mom and pops that are working their butts off,” Melchiorri said in a recent interview with The Associated Press. “They live in the back of the hotel, they get up in the morning, they put out fresh flowers, they make you breakfast … I can’t wait to meet that owner. I can’t wait to have their breakfast. I can’t wait to sleep in that bed.”

Melchiorri, who’s got a new show called “Extreme Hotels” in the pipeline, also offered advice for getting good hotel deals and reflected on growing up poor. Here are excerpts from the interview, airing Wednesday on the AP Travel podcast “Get Outta Here !”

Growing Up Poor

“I actually grew up really poor. My dad died when I was 2 years old. My mom struggled to make a living. … We were on welfare, had the block of cheese. She couldn’t afford college. So I went into the military and got my college degree and got some hotel experience. It was the best way to grow up because you understand the struggles so when you do have some easier times, you still work like you’re getting a block of cheese on Thursday.”

Career Path

“I started my career at the Embassy Suites in Times Square. Then I was fortunate enough to work at the Plaza Hotel. At that time the current president (Trump) owned the hotel and it was in bankruptcy. We were brought in to help come off that, went to work at the Algonquin Hotel, the Lucerne Hotel and turned those hotels around with some of the greatest teams ever. … Even before I was on television, I was always the guy they called in when things couldn’t be fixed.”

“People say, what’s your secret. It’s that I can identify talent. … A kid that worked for me at the Plaza, who worked for seven years at McDonald’s, and no one would give him a shot as a bellman. Patrice. He was the best bellman I ever had in my career. The ability to recognize talent has been my key.”


“When you go online you have to be aware that all the ads on the side of the websites and all the ads on top, those are usually third parties. Say you put in the Algonquin New York. The Algonquin New York comes up but it says underneath the URL, You have to be really savvy about making sure you find the website of the hotel. That sometimes could take you to the second or third or fourth page. … You book with a third party, it’s really difficult to get your money back. The hotel’s hands are tied.”

“The hotel is guaranteed to have the lowest rate. Expedia is not allowed to have a lower rate than the hotel. When you go to the more opaque websites like Priceline and those, sometimes you can get a better deal. I hate to even say that. Those rates are hidden and sometimes the hotel will drop their rate last-minute, ridiculously low, just to fill up the rooms, but it’s always better to go to the hotels.”

Call the Hotel

“I’m so frustrated with visitors that are afraid to call the hotel. The hospitality field by definition, that’s what we do. We’re hospitable. We want to talk to our guests. … Make a personal connection. … That gives that person at the hotel ownership of your reservation. … It costs a lot to get you to my hotel. Once you get there, I want to keep you as my guest.”

“Ask for anything you want. You want flowers. You want an upgrade. You want to be by the pool. You want to be upstairs, downstairs, ask for everything. There are limits of what we can do. But it’s not whether we say no or yes. It’s how we say no. If we say no, that’s just a bad answer. If we say, ‘Unfortunately the upgrade is not available today, it’s available tomorrow if you want to change rooms,’ which most people don’t want to, at least you’re giving them an option. No one likes the word no. People do like explanations. If you’re explaining things to people, 99.9 percent of the time, people are understanding.”

How to Complain

“There’s three stages of complaint: polite complaint; direct aggressive complaint; third, go to the internet and blow the damn hotel up on the internet and tell them how bad they are. I am a very big proponent of giving hotels two chances to fix their problems. If they don’t, I am a huge proponent of going online and telling everybody in the world the hotel’s problems. … The training priorities, the passion has to be to take care of every single problem.”


“I got my badge of honor in Europe a couple weeks ago. I finally got bit by bedbugs.”

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Hotel-Tech Startup Alice Acquires Smaller Rival GoConcierge


Concierges and hotel staff in Ethiopia at Sheraton Hotel Addis Ababa, which uses GoConcierge to help manage its services. Alice has acquired the platform. GoConcierge

Skift Take: Expedia has famously grown by acquisition. Will Expedia-controlled Alice also try to do the same for its hospitality operations software business? If any concierges know, contact us. We’ll tip well for answers.

— Sean O’Neill

Alice, a New York startup that sells operations software to hotels, said today that it has acquired a competitor, GoConcierge, in a deal whose terms were not disclosed.

The move is only newsworthy because it comes on the back of last week’s announcement that Expedia has become the majority investor in Alice as part of a $26 million investment.Many interpret that decision as Expedia testing the waters about a possible push into offering more enterprise software for hoteliers — though Alice says that there are no plans for any changes to its business.

GoConciege’s upscale hotels clients in 60 countries include the likes of the Shangri-La Hotel in Sydney and the Four Seasons Hotel Dubai International Financial Centre. Founded in 2000 and based in Burbank, California, GoConcierge did not raise any venture capital. It has developed a worldwide roster of high-end clients that use ts Web-based software for tracking concierge tasks such as booking reservations at Muay Thai competitions or J Lo performances in Las Vegas.

The company has focused on tools for concierges, while Alice has built a horizontal platform of tools meant to work across departments, such housekeeping, engineering, security, and the front desk’s communication with guests and other employees.

GoCongierge’s co-founder and executive vice president Adam Isrow will join Alice and report to chief executive Justin Effron. So, too, will the other active co-founder Simon Kaltgrad, whose title will be director of concierge technology.

Isrow said it is “too early to comment on detailed plans” concerning whether GoConcierge clients would transition to Alice’s platform other than to say that the combined operation “will give hotels the continued value they are used to receiving from both solutions.”

The companies face competition from providers of all sizes — such as Amadeus Hospitality and Oracle Hospitality down to Quore and Knowcross.

Looking ahead, Alice plans to release new features to the combined customer base, including a tool to improve task management and an automation of SMS, or text-based, responses to routine guest questions.

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

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Artificial Intelligence Is Becoming a Priority for Airline IT Chiefs

Karl-Ludwig Poggemann  / Flickr

Artificial intelligence is transforming the world of business. Will airlines and airports be next? Karl-Ludwig Poggemann / Flickr

Skift Take: Airline chiefs are more likely to moan than talk optimistically about leaps in artificial intelligence. But a new SITA survey suggests they’re realizing that it can be the bedrock of their futures.

— Sean O’Neill

One of Skift’s travel megatrends for 2107 was that, after years of hype, travel companies are finally putting artificial intelligence (AI) to work.

A survey of senior IT executives by SITA, a Geneva-based aviation technology firm owned by airlines and airports, finds that 52 percent of airlines plan major artificial intelligence programs.

There are many ways to apply artificial intelligence, and chatbots are one of the most discussed for their potential to cut labor costs. The survey says that 14 percent of airlines and 9 percent of airports already use chatbots. Looking ahead three years, chief information officers at 68 percent of airlines say they intend to adopt artificial intelligence-driven chatbot services.

Exhibit A is Aeromexico, which since 2016 has been using a Facebook Messenger chatbot to answer routine questions from customers. Rather than a human agent reading from a phone transcript, the computer recognizes the natural language query and answers from a bank of about 500 responses.

Brian Gross, Aeromexico’s vice president for digital innovation and strategy, has been one of the industry’s leading proponents of adopting artificial intelligence. He told Skift’s aviation reporter a few months ago that Aeromexico’s platform serves about 1,000 Spanish-speaking customers per day, handling roughly as many inquiries as two full-time employees could but at a cheaper cost.

Skeptics may argue that airlines are focusing too much on artificial intelligence applications for customer service, where there may not be a great consumer benefit for such tools beyond reducing call center times for routine questions.

According to a different SITA survey on passenger behavior, more than four in five customers talk to agents to check their bags despite several airlines having self-service bag drops.

For airlines and airports, the revenue gains from artificial intelligence may be from operational, behind-the-scenes processes. On that front, SITA’s survey offers hope. Over the next three years, 80 percent of airlines “plan to invest” in prediction and warning systems, which rely heavily on artificial intelligence.

Even so, some critics question whether the industry is doing enough. There has yet to be an industry effort to collaborate in harvesting data generated by travelers anonymously and using it as a resource for artificial intelligence research — with the whole industry benefiting.

One might think that an organization like SITA might set up something like an artificial intelligence research laboratory — or at least do a special industry event to encourage best practices and the sharing of ideas among the various airline fiefdoms.

SITA CEO Barbara Dalibard has told Skift that she’s eager for SITA to evangelize for innovation, so perhaps the Geneva-based organization will claim a larger role in advocating for artificial intelligence.

In some ways, airlines overall were late to the mobile revolution, though there were a few exceptions like SAS that saw mobile’s potential early. Even today, less than 10 percent of airline sales come via smartphones or tablets.

Will the aviation sector learn its lesson as the new tech wave of artificial intelligence comes along?

Ryan Wolkov

PRC Time Shares

Author: Ryan Wolkov

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