Corporate Travel Got Even More Complicated in 2017

Beverly Yuen Thompson  / Flickr

This photo shows protests at John F. Kennedy International Airport over the Trump administration’s first travel ban in January. The ban — a third version of which was allowed to go into effect late in the year — was one of many disruptive forces in business travel in 2017.
Beverly Yuen Thompson / Flickr

Skift Take: Business travelers coped with a range of surprises, including disruptive natural disasters and sudden shifts in government policy. Expect more uncertainty.

— Hannah Sampson

From a controversial U.S. travel ban to questions about the implementation of Brexit to a devastating Atlantic hurricane season, the past year required business travelers to adapt and change course, sometimes at a moment’s notice.

At the same time, global economic growth finally looks healthy a decade after the financial crisis, according to the Skift 2018 Global Travel Market Outlook. High consumer and business confidence is likely to motivate businesses to hire employees and to encourage them to travel.

Skift asked executives in corporate travel — travel management companies, technology providers, organizations, and others — what affected their business in 2017 and the biggest industry breakthroughs this year. We also asked about their priorities for 2018, which will appear in a story in the coming weeks. They responded by email and in phone interviews.

A Year of Surprises

While tropical storms and other natural disasters are to be expected every year, many executives said one of the biggest shocks in 2017 was the extraordinary hurricane activity in the Atlantic. The region recorded 17 named storms, the highest number of named hurricanes since 2005. Together, they caused an estimated $188 billion or more in damages, according to AccuWeather.

“I don’t think anyone foresaw the scope of the Atlantic hurricane season, and it caught quite a few people and companies by surprise,” said Gabe Rizzi, chief sales officer and president of Travel Leaders Corporate. Both leisure and business travelers saw their plans disrupted. The Caribbean is a popular destination for meetings and events, Rizzi noted, “and the strong hurricane season caused a domino effect for air travel.” Travel Leaders Corporate worked both to move travelers out of danger and to transport employees to affected areas to help with cleanup or to maintain business operations.

In addition, corporate travel executives had to scramble to deal with an outbreak in Madagascar of the plague, a disease from the Middle Ages that killed more than 200 people in the country from August to mid-November. “Who would have thought you needed a plan for the plague?” said Dr. Myles Druckman, senior vice president and Americas regional medical director at International SOS, a medical and travel security services firm.

Druckman said the spate of disasters also highlighted weaknesses in preparation by businesses and travel companies. “Continually, what is a bit of a surprise is that a lot of organizations have health as a major priority, yet they struggle to find good ways to implement their plans globally,” he said.

Disasters and disease weren’t the only surprises. The political disruption that emerged worldwide in 2016 continued to affect corporate travel over the past year. Brexit has weakened the pound and damaged the confidence of UK businesses. Meanwhile, President Donald Trump’s travel ban created turmoil at airports and added to geopolitical uncertainty for business travelers. In early December, the U.S. Supreme Court allowed the third version of the ban, which bars residents of six majority-Muslim countries from traveling to the United States, to take effect while legal challenges continue.

The Global Business Travel Association has run shock scenarios covering everything from an Ebola outbreak to spikes in oil prices to terror attacks, and business travel has always shown resiliency, said Michael McCormick, executive director and chief operating officer of the association. “Yet the uncertainty factor in the past year has created both an immediate impact and the potential for a negative long-term impact as well, unlike anything we have seen,” he said.

Greeley Koch, executive director of the Association of Corporate Travel Executives, said he was surprised to notice a trend of companies scaling back their financial support for educational conferences and learning opportunities. Anecdotally, more people in the corporate travel industry are using personal vacation days and their own funds to attend conferences, he said. ACTE is responding by providing more webinars and online resources to make it easier for people to learn wherever they are.

Some unexpected developments were specific to individual businesses. For Rob Greyber, president of Egencia, the biggest surprise was the departure of Dara Khosrowshahi, chief executive of parent company Expedia, to become CEO of Uber. “The best example of his leadership is the deep leadership team and resilient culture he built at Expedia,” Greyber said.

Dan Ruch, founder and chief executive of Rocketrip, which helps businesses reward employees for saving money on corporate travel, said “maybe not the biggest, but the nicest surprise this year was seeing how the industry and more organizations have become aware and proactive about promoting sustainable travel.”

The Impact

In financial terms, the uncertainty driven by the travel bans and the U.S. laptop ban that was lifted in July had the largest impact on the corporate travel industry this year, according to McCormick. In the week following the Trump administration’s initial travel ban, $185 million was lost in U.S. business travel bookings, GBTA estimated.

The association projected that those policies led to a loss of more than $1.3 billion in 2017 in overall travel-related expenditures in the United States, including hotels, food, rental cars, and shopping expenses. “Fortunately, the underlying economies in most markets here and abroad were strong enough to support this impact for the near term,” McCormick said.

Despite political and environmental challenges, many of the corporate travel executives who answered our questions pointed to growth and momentum in their own businesses. Rizzi of Travel Leaders Corporate cited a strong U.S. dollar that made international business trips a good value for companies. In 2017, Travel Leaders Corporate expanded its reach through acquisitions and partnerships in the U.S., Mexico, and Europe.

Rizzi said he also is seeing a larger focus on the responsibility of employers to keep business travelers safe. “In a year where global terrorism has dominated the headlines, duty of care needs to be a top concern of any company who has employees traveling,” he said.

Egencia’s Greyber said he has been “amazed at the resilience of business travelers” through natural disasters, acts of terrorism, and even the normal wear and tear of corporate travel. He pointed to the example of Mahshid Mazooji, a territory sales manager in the food service industry, who was stranded overnight at Charlotte Douglas International Airport when she missed her connecting flight. Instead of complaining, she created a music video of herself dancing to Lionel Richie’s “All Night Long,” appearing with airline employees, a Starbucks barista, and fellow travelers. The video has been watched on YouTube more than 2.7 million times.

“I think the video went viral because people love stories of resilience, of reacting to adversity with joy,” Greyber said. “When we reflect on our brand, our products, what we want to stand for as a company and an industry, we think about travelers like Ms. Mazooji and how we can serve them better.”

Ruch at Rocketrip said his work on motivating business travelers to make better decisions was supported by this year’s Nobel Memorial Prize in Economic Sciences, awarded to Richard H. Thaler, an economist at the University of Chicago Booth School of Business who has been a pioneer in behavioral economics. “Recognition for his work on nudge theory and proving human irrationality has provided continued validation for the incentivized behavioral change space,” Ruch said.

Corporate Travel Tech Continues to Evolve

Executives in the corporate travel industry expect the technological change they witnessed in 2017 to accelerate next year. “People are now starting to realize that the future that we’ve always talked about – whether artificial intelligence, blockchain, or alternative forms of payment – these things are closer than people realize,” said Koch, the ACTE executive director.

These developments could be a boon to business travelers, saving time and money, and even providing them with better care on the road. “What we’re seeing in the industry are a lot of new apps for health,” said Druckman of International SOS. It’s becoming easier for a traveler to have a live video call with a doctor, for example. For some remote locations, there is now a televideo link between the paramedics that work for International SOS and the doctors helping to manage patients’ cases. Even the ability to text the assistance center instead of having to call every time makes travelers’ lives easier, Druckman said.

Rizzi of Travel Leaders Corporate noted a continued demand for mobile technology. Through the company’s mobile communications travel platform, agents can chat with business travelers on the road and can rebook a connecting flight before travelers even know they’ve missed it. “We’re also seeing a tremendous appetite for data intelligence and analytics as it relates to companies’ travel and travel expense data, to optimize and fine-tune their supplier agreements and traveler behaviors,” he said.

Another trend in 2017 was streamlining travel-booking processes. Rocketrip developed a method of embedding its technology within customers’ online booking tools, showing travelers the most cost-effective and rewarding options.

“After launching the integration, we’ve seen traveler engagement increase significantly,” Ruch said.

Steven Reynolds, CEO of hotel rate tracking tool tripBAM, said his company’s biggest innovations this year are a new analytics package with tripBAM’s proprietary lowest qualified rates and a new automated rebooking solution.

Outside of his own company, he highlighted itinerary management platform Traxo for its innovations in tracking reservations made outside corporate booking tools.

“Across the industry, Traxo’s ability to automatically capture direct bookings could be very significant,” he said.

A common theme was the growing ability to use big data to help business travelers make better decisions. Greyber of Egencia said the greatest driver of innovation at his business in 2017 was testing and learning at scale, using machine learning algorithms to improve computer models.

“While this is common across consumer internet companies, we’re the only major TMC doing this in a serious way,” he said. “Our test capacity is up 100 percent year-over-year and will continue to grow in 2018.”

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Colombia’s New Tourism Campaign Is a Soundtrack For Travelers’ Inner Journeys

Skift Take: Colombia’s tourism leaders are tapping into the power of local music to convey the warmth and welcoming spirit of the Colombian people, who want to share their profound sense of national pride and optimism with travelers, based on the country’s surging popularity in recent years.

— Greg Oates

International travel to Colombia is up more than 20 percent in 2017, and much of that has to do with all of the new public and private investment in tourism infrastructure during the last few years. The nation’s stable political climate, sustainable economic development strategies, and a healthy tax incentive to lure global hospitality brands to Colombia are also contributing to the robust growth.

However, local tourism leaders believe that Colombia’s modern physical infrastructure and its protected natural environment will only go so far to differentiate the country as a travel destination in the eyes of next-generation travelers. Skift’s Supertraveler research shows that savvy travelers today want to return “transformed and inspired” from their trips. They also want to “fulfill their own quests” by designing their own unique travel journeys.

“For us, travel is not just about transporting yourself to a unique place physically, because there are very few places in the world where people haven’t already been,” says Julián Guerrero, vice president of tourism at ProColombia, the national organization responsible for promoting international travel and trade. “Instead, the secret to creating a truly unique travel experience is really the connection between the inner and physical experiences, which are different for every individual.”

That was the motivation behind ProColombia’s development of the new international tourism campaign: Colombia: Land of Sabrosura, launched in early December in tune with ProColombia’s 25th anniversary. “Sabrosura” is a local word without a direct English translation, referring to an emotional state of joy, a positive attitude, beauty or flavor, depending on the context. It is also uniquely experienced by each individual.

“For Colombia, music and culture play a major part of that feeling,” explains Guerrero. “Music especially is a language that communicates directly to the heart and the mind of our visitors. It also provides a great way to explore, discover, and understand the core meaning of a destination.”

Colombia’s varied musical heritage plays an important part in its national identity, blending Indigenous, African, and European influences. Adding to the multi-faceted, multicultural appeal, Colombia is the only country in South America that has Pacific, Atlantic, Andes, rainforest, and tropical river delta ecosystems. Each of those regions not only feels different in terms of its cultural influences and landscape, they sound different as well.

Altogether, the nation is home to more than 1,000 musical rhythms, including the endemic Vallenato originating near the Sierra Nevada, the highest coastal snow peak mountain in the world; the Joropo, coming from the Eastern Plains in the Orinoco River valley region; the Porro in the Pacific and the Porro in the Caribbean; the traditional Bambuco in Bogota; the Guasca from Medellin; and regional dance-orientated Cumbia, which originated as a courtship dance in West Indian culture.

Most well known to international ears, salsa can be heard throughout the country, but it has especially evolved as a musical genre with its own native influences in the city of Cali — home to the World Salsa Festival every September.

Therefore, Guerrero suggests, as travelers move through different parts of Colombia, their experiences will have specific musical dialects to accompany their journeys, each contributing to a soundtrack representing a specific moment in the traveler journey.

“We’re also using music platforms such as Deezer and Spotify to promote Colombia in a unique way through sound,” he says. “I think travel is about the complete journey that we undertake when we’re in a place that has an emotional or spiritual effect.”

Exploring Colombia Through Music

This content was created by ProColombia and published by Skift’s branded content studio, SkiftX.

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Hospitality and Retail Join Forces But It Shouldn’t Be Forced

El Cosmico

El Cosmico Hotel in Marfa, Texas has a full line of ECPC Apothecary products. El Cosmico

Skift Take: In the rush to smash together retail and hotels, brands have to focus on doing this with a lot of care and intention. Sometimes a brand just isn’t that important.

— Colin Nagy

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

There’s a growing convergence between retail and hospitality. Ace Hotel introduced its world view in the form of goods and items, everything from bathrobes to bedding, that are consistent with the brand and presents the hotel as an arbiter of taste.

It is a logical extension for a brand to say we’ve given thought to all of the accouterment in the hotel, but also the things that a person who buys into our vision, would want. Not just the sheets in the room, but the candles, the leather goods, the magazines, even down to the shaving cream and small sundries.

As hotel brands are trying to move from “like” to “love,” moving from a place to sleep into a lifestyle positioning, this sort of curation is a useful step. One could argue that the more touch points you can own or influence, the more emotional mindshare or resonance you can have.

When done right, it is a pleasure. The Bunkhouse Group does this particularly well. Each property has a collection of items that speak to the vibe of a place. El Cosmico in Marfa, Texas has everything from skin healing oils to hand-sewn moccasins and a custom- designed D.S. & Durga scent. It is as if the mood board of Liz Lambert, Bunkhouse’s chief operating officer, has been made shoppable. It works, and it is thoughtful.

But as this trend evolves, we see a deeper level of integration between retail and hospitality. Muji and West Elm are opening hotels. Parachute has a small pop-up hotel so people can try products. Shinola, the watch brand that borrows heavily — and some would argue artificially — from the cultural history and emerging resonance of Detroit, is also getting into the game via Dan Gilbert’s Bedrock Detroit commercial real estate arm.

The upside is easy to understand: additional showroom space for brands and a way to dive deeper into the essence of what a product or service represents. Every brand would like to believe it is worthy of such immersion.

Does It Go Too Far?

But at one point does this stop being additive and thoughtful, and make you feel like you’re sleeping in a store? And does everyone want to buy in that far to the West Elm world view? I, for one, don’t. I understand when Armani wants to get into hospitality with a well-executed Dubai property, but for lesser brands with diminished prestige, it seems slightly delusional and worse, comes off as self-important.

I am supportive of the Muji hotel because of its clean, utilitarian products, sensible design and “less is more” mindset. Also, its global execution with the stores is second to none. But one gets the sense that every brand under the sun is plotting something in the space, and strategy decks will be spewing forth with more concepts for names and co-concept hotels.

People want to buy into a strong vision, the same way you want to read David Remnick editing the New Yorker or Tyler Brûlé editing Monocle. It is a frame and perspective assembled by a thoughtful person. This is why people like Firmdale Hotels. It is the reason patrons like to go to an André Balazs bar. It is why the soul and day to day execution of a place are so important.

In the rush to smash together retail and hotels, brands have to focus on doing this with a lot of care and intention. Without a dynamic visionary personality, it can come off as half-hearted, cynical, and beating a trend to death. Sometimes a brand just isn’t that important.

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Luxury Travel’s Next Phase Could Be in Vacation Rental Consolidation


A ThirdHome property in Wild Rock, West Virginia. The company is looking for some outside investment. ThirdHome

Skift Take: Luxury travelers are increasingly looking to vacation rentals for a different type of experience. This presents opportunities for both established players and newcomers.

— Patrick Whyte

Over the last year Airbnb has demonstrated its willingness to spend in order to get a bigger slice of the vacation rental market.

In February, it bought Luxury Retreats and last month it announced a deal for accessible travel business Accomable. Wyndham’s European vacation portfolio is apparently also of interest.

And while Airbnb’s peers were less acquisitive in 2017, they have spent money in the past. TripAdvisor bought HouseTrip in early 2016 and HomeAway purchased Dwellable in late 2015.

As vacation rentals grow in popularity, further consolidation is likely.

“From my perspective the niche players are the ones that are the next version of Airbnb, they’re the newcomers to the market that have the ability to get acquired,” said Joseph DiTomaso co-founder and CEO of accommodation search engine AllTheRooms.

DiTomaso believes brands with a “unique twist and a captured audience” are the ones in  “prime position” to be bought. “They’re not going to be as big as Airbnb but if HomeAway wants to pick up another 150,00 to 200,00 units how do they do it? They go out and buy one of these smaller niche players,” he said.

DiTomaso highlighted LGBT site Mister B&B as one interesting player and there are others catering to different audiences, including for cycling enthusiasts and pet lovers.

The Luxury Sector

Luxury travel, though, remains a particularly attractive niche

AccorHotels has been one of the most active buyers. Over the years, it has picked up a number of businesses before consolidating them all under the Onefinesay brand. Oasis Collections, which AccorHotels had previously invested in, now counts Hyatt as one of its shareholders.

Strategic buyers like AccorHotels, Hyatt and now Airbnb often make the best home for niche players because of of their deep pockets and long-term outlook.

Onefinestay has yet to turn a profit, and by combining it with Travel Keys and Squarebreak, AccorHotels will be hoping increased scale can improve the bottom line.

“I still think this [the vacation rental sector] is a good opportunity for luxury groups because it answers a need from the consumer and the traveler to have a different experience than the traditional hotel,” said Morgann Lesne, partner at investment bank Cambon Partners.

The growing interest among luxury consumers for vacation rentals is also prompting those at the fringes to take it more seriously.

Home exchange club ThirdHome is looking for outside investment of up to $12 million as it attempts to grow its business.

The Tennessee-based company operates as an exchange marketplace. Homeowners are invited to place their properties on the site, and in return are given tokens that they can use towards staying at another member’s property.

ThirdHome’s management is planning to add a rental option, whereby owners can opt to let their properties for cash instead. There is also the intention to further open up its offering and allow non-owners to join the club, bringing it nominally into competition with the likes of Onefinestay, Airbnb and others in the luxury rental space.

“We started initially as an exchange club but we are now morphing our position to more of a luxury property and travel club,” said partner and president Giles Adams. This summer ThirdHome also added a concierge service, which includes transportation and activities.

Adams said ThirdHome was looking more for a partner than an acquirer.

“We think there is a huge opportunity for us within this segment, so at the moment we’re specifically looking for a partner, whether that’s a fund that particularly likes this segment and understands what we’re doing and can really get behind it or whether that is a strategic partner with a company that might take a stake and support us though our growth,” he said.

Different Approaches

There are differences – some big, some small – between the many vacation rental companies.

Airbnb, takes an arms-length approach, operating only as a platform. Others like Onefinestay are much more involved and offer homeowners insurance, marketing, and management services.

Although operating at the luxury end, ThirdHome shares similarities with Airbnb in that it is mainly just a platform and lets the owners themselves look after their properties.

“With Onefinestay and other property managers, they have the relationship directly with the actual property so they manage the calendar 365 days a year, [which is] quite a human resource-, time-, and capital-intensive operation,” said Adams.

“They’re obviously very good and very successful at what they’re doing but that’s not an area of the business that we’re going to be getting into at all.”

There are those, however, that think the curation and management side is essential for luxury travelers

“[The] luxury segment is a much more complex segment to tackle and to make profitable than the mass market because in luxury travelers expect people on the ground and a real level of service. So it can’t be operated as a marketplace,” Lesne said.

The problem for AccorHotels and others is that being a full-service operator is expensive. Onefinestay has accumulated years of losses and is still not profitable.

All eyes will be on Airbnb to see what it does next in the luxury sector and where it made a wise decision in buying Luxury Retreats.

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Virgin Atlantic Builds an Igloo on a Deck at Heathrow — Airline Innovation Report

Virgin Atlantic

Virgin Atlantic has built a pop-up igloo at London Heathrow. Virgin Atlantic

Skift Take: Most high-value customers choose airlines based on two factors — price and schedule. But on the margins, airlines like to use marketing strategies to attract customers. Maybe Virgin Atlantic’s outdoor igloo at London Heathrow will help it win some new fans.

— Brian Sumers

The Skift Airline Innovation Report is our weekly newsletter focused on the business of airline innovation. We will look closely at the technological, financial, and design trends at airlines and airports that are driving the next-generation aviation industry.

We also provide insights on developments in passenger experience, ancillary services, revenue management, loyalty, technology, marketing, airport innovation, the competitive landscape, startups, and changing passenger behavior. I write and curate the newsletter, and we send it on Wednesdays. You can find previous issues of the newsletter here.

At the Star Alliance and United Club lounges in Los Angeles, you can wait for your flight outside on an observation deck, perhaps while sipping Chardonnay, smelling jet fuel and enjoying one of roughly 330 sunny days each year.

It’s part of a newish trend of airlines and alliances opening clubs with outdoor decks. Some are in obvious places, like L.A. Others are not. Delta Air Lines has outdoor lounges in Atlanta and New York, while Virgin Atlantic has one in London. The terraces delight passengers, who pose for selfies by fire pits, while watching aircraft move on the ramp.

But it’s December now. And while Virgin Atlantic likes to brag it has the only rooftop garden at Heathrow, the airline has never figured out how best to use it because, unlike in Los Angeles, the sun does not shine year-round. “Winter in London proved to be the most challenging time for us to make this space incredible,” Daniel Kerzner, the airline’s vice president for customer experience, told me. 

Enter the igloo.

This week, Virgin Atlantic announced it had built an eight-seat igloo on the deck, available to passengers through January 14. It’s part of a marketing deal with London’s Coppa Club, which uses seasonal igloos to goose low-season sales. At Virgin Atlantic, executives hope igloos will make the brand pop on social media. According to the release, the airline expects customers will take “highly shareable selfies in this unique location.”

I don’t see many igloos — I’m in L.A. — but apparently elsewhere they’re a thing. “Igloos have become a huge sensation in London, and we wanted to take it one step further,” Kerzner said. Kerzner, who earlier this year left Marriott International, where he was vice president of marketing, promised we’ll see more innovative ideas from Virgin Atlantic in 2018.

What do you think? What should Virgin Atlantic plan to help improve the brand’s positioning? Does it need to do more than have a month-long igloo popup?

And what’s with this igloo craze?

— Brian Sumers, Airline Business Reporter

The Week’s Links

Delta Air Lines Is Going After Future Business Travelers — While Still in College: At investor day last week, Delta’s chief marking officer said the carrier is courting university students as well as young professionals with lucrative jobs. Also interesting: Delta monitors spending patterns on its American Express-branded credit cards, keeping a close eye on splitters — or customer who buy on Delta and other carriers.

Video: Lufthansa Strives to Become as Data-Savvy as Netflix: At Skift Global Forum in New York earlier this year, I interviewed Lufthansa Chief Digital Officer Christian Langer. He told me he seeks to persuade all the group’s airlines to implement sophisticated ecommerce strategies used by major online retailers. As anyone who works in airlines knows, this is a tough task. He’s up for the challenge.

Spirit Airlines Names Next CEO as It Tries to Fix Old Problems: When Spirit replaced CEO Ben Baldanza in January 2016, it bungled the messaging. Baldanza said he left on his own, as part of a succession plan. But it didn’t seem that way, and investors received no warning. Spirit is not letting that happen this time. Investors are getting more than one year of warning. Current CEO Bob Fornaro will step down in January 2019.

25 Travel Moments That Mattered in 2017: At Skift, we recap the year with moments we think were important. I contributed three — one on the rise of basic economy, another on United’s dragging incident, and a third on the massive Airbus order placed by four discount airlines, all partly owned by Indigo Partners.

Should Ryanair CEO Michael O’Leary Step Down? The idea of replacing iconic Ryanair CEO Michael O’Leary would have been unthinkable six months ago. But times change. Maybe Ryanair needs a leader who is less antagonistic to labor. Or maybe it just needs a fresh start, Bloomberg View columnist Chris Bryant writes.

Southwest Sees U.S. Tax Bill as Opportunity to Buy New Planes: This is impressive spin by Southwest CEO Gary Kelly, a proponent of tax reform. More than most U.S. airlines, Southwest needs to place a massive order for new planes. It will have to replace older jets no matter the tax implications. But, hey, why not credit tax reform?

In It for the Long Haul: Passengers love to complain about airlines, but for business class travelers, the product has never been better. At least that’s what I say in this Globe and Mail story about long-haul business class. “Almost every airline has seats that turn into a flatbed. Most airlines are investing in new airport lounge,” I noted. “Many airlines are improving their food and wine. Things are a lot better up front than they were a decade ago, when just about every airline has recliner seats, and not beds.”

First Class Airline Travel. Is It Dead? Airlines Should Expand Their Brands With Premium Perks: There is no shortage of stories proclaiming first class is dead. I’ve even written a couple. But this report from CAPA-Centre for Aviation is more interesting than most. Its conclusion: “First class mostly exists not for direct revenue contribution, but for marketing.”

How Flyers Can Relax and U.S. Airlines Can Compete — With Spas: A couple of things here. Spas are not a new airport trend. And while the people quoted in this New York Times story may say otherwise, few passengers choose flights based on the spa experience. Business travelers tend to choose flights based on price and schedule. They always have, and they probably always will.

Norwegian Wi-Fi Update

Norwegian Air is expanding its U.S. network again, with new less-than-daily flights from New York to Madrid and Amsterdam, and Los Angeles to Madrid and Milan. Boeing 787-9 aircraft will fly all four routes.

Norwegian uses the Dreamliners as a marketing tool, and it should, considering how much it costs to new lease the fancy planes. But as much as Norwegian promotes the onboard experience — customers can order food through the entertainment system and flight attendants can help control jetlag through mood lighting — something is missing. Neither Norwegian’s 787s nor its Boeing 737 Max fleet have Wi-Fi. It is a perk the airline has long promised but never delivered.

Regular readers know I rarely will fly without Internet — I’m a millennial, and I’m addicted — so I asked Norwegian spokesman Anders Lindstrom about the holdup. While he didn’t explain why it has taken so long, he promised Wi-Fi is coming soon.

“We will start installing Wi-Fi onboard both the 787 Dreamliners and the 737 MAX mid-2018,” he said.

He didn’t say when Norwegian would finish, however. Let’s hope it’s soon.

Tweet of the Week

The lobbying group for the largest U.S. airlines — just about all of them except Delta Air Lines — is joining the suck-up-to-the-president game.

Is this what a lobbying group must do in 2017 to ensure the president will take it seriously? Presumably the airlines still want safety regulations.

Meet Me in San Francisco

Want to know about big travel trends coming in 2018? Skift is holding three free events in January to share our Megatrends — an overview of what we expect for travel in 2018.

We’ll be in New York on January 16, London on January 18, and San Francisco on January 30. In addition to lively discussion, we will have refreshments. And you’ll leave with a fancy magazine, featuring a story by me about how airlines are rushing to refine ecommerce strategies.

I’ll attend the San Francisco event, and would love to meet you there. Or you can meet my colleagues in London and New York.

Details on all the events here. You will need tickets.

Three You May Have Missed

You won’t get a newsletter next week because of the holiday. But here’s some extra content to get you through the month. I enjoyed writing these three stories in 2017 more than others.

Business of Pajamas, Pillows and Bragging Rights on Airplanes: Before Harry Zalk, I hadn’t thought about launching an Airline Insiders feature — a question-and-answer series where I ask airline employees and vendors about the intricacies of their jobs. But I met Zalk at a London conference and he impressed me with his zeal for airline pajamas, and amenity kits. He said the global soft products and amenities market is probably worth at least $500 million. He helps match luxury brands with airlines.

For the First Time, Allegiant Air Learns What It’s Like to Configure a New Airplane: If you fly U.S. discounter Allegiant Air, you may see a bright orange stripe running along overhead bins. That’s because many of its planes are former EasyJet Airbus aircraft, and it’s cheaper to keep the cabins as they were, rather than retrofit them. But earlier this year, Allegiant added its first new planes and had to decide how to configure them. One Allegiant executive described it like renovating a house. “They [Airbus] kind of walk you through the process and say, ‘Now it’s time to make these 14 decisions,’” he said. “That’s when we open the catalogue and say, ‘Oh, shit, there are many, many options.’”

Spirit Airlines Wants to Win Back Customers by Being Nicer: I spoke with Spirit Airlines CEO Bob Fornaro over the summer during what might be described as his apology tour. Baldanza, his predecessor, built a formidable low-cost carrier, but he did not create a customer-friendly airline. “For the most part, you can only do that for a short period of time,” Fornaro told me. “We almost went out of our way to poke the customer in the eye. And once a business gets more competitive, you can’t do that anymore.”


Skift Airline Business Reporter Brian Sumers [] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send me an email or tweet me.

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Travel and Events Are Becoming a Potent Blend — Meetings Innovation Report

Diarmuid Greene  / Flickr

Alexis Ohanian, co-founder of Reddit, on the center stage at Collision 2017 in New Orleans as attendees look on. Diarmuid Greene / Flickr

Skift Take: Backed by technology and out-of-the-box thinking, integrating travel management and meeting functions is becoming a thing — if territorial impulses don’t get in the way.

— Deanna Ting

Consolidation is something that seems to be happening, well, everywhere.

Only last week, for example, we got news that Disney would be buying most of 20th Century Fox. And for those of you who follow the hospitality industry closely (as I do), it does not need mentioning that recent mega mergers took place between Marriott and Starwood, and then AccorHotels and Fairmont-Raffles-Swissotel.

While those two mergers are having an impact on the meetings industry, the sector itself is dealing with another type of consolidation, as Business Travel Editor Andrew Sheivachman details in a story this week. Aided by technology and new ways of thinking about how to do business, the integration of travel management and event spending departments within corporations is showing great potential. One caveat is the concern that the industry’s reliance on old-school thinking might get in the way.

On another subject, my colleague Andrew will be back in the new year after taking a well-deserved holiday, which I hope you will, too. Our next edition of the Meetings Innovation Report will resume in January. Until then, my warmest wishes for a wonderful holiday season, and for a great start to 2018.

— Deanna Ting, Hospitality Editor

The Future of the Meetings Industry

Travel Management and Event Consolidation Is Edging Out Departmental Turf Wars: Convergence is trending among travel and event departments at big companies. Fueled by technology, it will only become more important to both sectors in the future if old-school thinking doesn’t get in the way.

Cashing In on the U.S. Experience Economy: McKinsey thinks we can expect a lot more private equity investment in experiences and events going forward.

In the News

The Body Trade: I always knew medical meetings were a big business for hotels, but I didn’t realize to what extent until I read this disturbingly detailed piece.

$59.8M Design Contract for Las Vegas Convention Center Approved: If it weren’t already clear that meetings mean a lot of business to Las Vegas, this deal certainly cements that idea to the tune of nearly $60 million.

Best of 2017: The News Stories That Transformed the Event World This Year: BizBash looks at how the inauguration of President Trump, the fall of Harvey Weinstein, a slew of natural disasters, and more changed the tone and substance of events this year.

BCD Meetings & Events Acquires Grass Roots Meetings & Events:  … And the consolidation continues.


Skift Business Travel Editor Andrew Sheivachman [] curates the Skift Meetings Innovation Report. Skift emails the newsletter every Wednesday.

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Cracking the Code: Taking a Closer Look At Travel Startup Business Models

Skift Take: Much of the success of a travel startup hinges on its business model. A new Skift and Amadeus travel startup survey found that subscription-based, personalized pricing and unbundling models show the most promise to those in the space.

— Dawn Rzeznikiewicz

There’s no room in the travel industry for stagnation, as major incumbent players experiment with new revenue models to fortify their positions amidst fierce competition, and smaller players are disrupting the space by identifying solutions to address a variety of industry pain points. However, with so much competition out there in such a large industry, it’s often difficult for startups to get far off the ground. In fact, no matter how great the business idea, the right business model can make or break a venture.

Skift’s survey of several hundred individuals who work at travel startups, conducted on behalf of Amadeus, found that much of the industry’s entrepreneurial activity will center around several business models in the next few years. According to the survey data, the three most popular business models respondents expect companies to experiment with are subscription-based pricing, personalized pricing based on customer profile and unbundling. Here, we look at the three different models.

1. Subscription-based pricing

The so-called “subscription economy,” or the business landscape in which companies use subscription-based business models, is growing. Technology driven sectors are increasingly shifting their business focus from working the transactional fixed-price model to serving customers over time. According to the survey, nearly 27 percent of respondents expect that subscription-based models will be one of the most frequently adopted business models in the travel industry over the next few years.

Frequent travelers, such as those who travel for business, may be lured by factors such as the potential cost manageability of subscriptions, whether product or feature based. While subscription pricing may not be the best solution for every travel product or service out there, startups who can employ it effectively gain several benefits. For example, by mitigating the sporadic nature of travel purchases, subscription models present an opportunity to focus product development around a high-value customer base. Also, through subscription revenue streams, the startup has more freedom and insight to scale effectively.

One example of a company experimenting with a subscription-based model is Surf Air, a membership airline offering all-you-can-fly benefits and personalized service. The airline entered the market with subscription priced flights, and offers unlimited flight service for a fixed monthly fee. Originally launched as a service for frequent travelers who sit between commercial and fully private air travel, and who commute throughout the California regularly, the four-year-old startup now has its eyes set on Europe to help alleviate traveler friction for the “Brexit commuter.”

2. Personalized pricing based on customer profile

Airlines and hotels have long been able to sell the same product — a seat on a flight or a hotel room, for example — to different customers at different prices. And thanks to advances in artificial intelligence and increased availability of consumer online data, travel companies are now using sophisticated algorithms and analytics to not only gauge price sensitivity, but also predict consumer behavior. Approximately one-fifth of survey respondents indicated that business models utilizing personalized pricing will likely be more prevalent over the next few years.

How does this type of personalized pricing work? An online travel agency, for example, can now understand when a customer performs multiple searches across multiple devices over a period of time without purchasing, and use that information to present a discount on the service that will “seal the deal.” Or, by segmenting customer priorities with analytics, a travel company can locate those customers who would be willing to exchange incremental flexibility for a higher price.

Despite the potential benefits of this personalized pricing approach, there are potential risks and tactical questions that travel tech companies need to consider. One is the threat of customer backlash, as this model may incite privacy concerns among customers, or concern that they’re victim of price discrimination or surges. Another potential threat is that the business model simply fails as the customer simply learns to game the system.

Regardless of concerns, recent travel industry developments suggest this model is growing in popularity. Trivago recently made a small, but noteworthy acquisition of Tripl, a company that provides tailored, personalized travel and activity recommendations based on customer social media data and factors such as weather and pricing. Another company putting this model into practice is GoHero, a chat-based personal concierge app which integrates with various messaging tools, and uses AI to understand customer preferences. The app allows travelers to review pricing and availability as well as book and plan travel.

3. Unbundling

Unbundling, also known as the “a la carte” fee model, is increasingly in the spotlight due to its use by legacy and budget airlines. According to the survey, 14 percent of respondents expect that unbundling-based business models will be one of the most frequent experimentations in the industry over the next few years.

The concept of keeping operating costs low by charging for extras (such as priority boarding, seating choice, baggage, food, etc.) emerged over a decade ago with Ryanair, easyJet, and Southwest Airlines. Since then, more airlines have followed suit and some hotels have recently decided to adopt this model as well. For example, budget boutique chains such as Tune Hotels in the UK and Malaysia and Nomad Hotels in France are offering “pick and pay” amenities. Guests pay for unbundled services, such as internet connections, room cleanings, or an in-room safe, only if they want them.

CB Insights recently reported on an array of new ventures seeking to unbundle the hotel experience. Some of these startups may not be exclusively marketed to travelers, but offer add-on experiences that appeal to certain customer segments related to the travel space. For instance, many business travelers develop a preference for boutique hotels which often have limited access to conference rooms. These travelers can reserve meeting and working spaces via startups such as Breather, without incurring the commitment required by the closest market alternative, co-working spaces. Meanwhile, Magic, a startup offering “personal assistants on demand” through a concierge app, could attract travelers staying in hotels without concierges.

Providing an innovative service or product to travelers isn’t enough to succeed in today’s competitive travel market, and will only get you halfway to where you need to be. Establishing the right business model is just as important — and with so many emerging options out there, the needs of both the company and the customer need to be closely considered to make the right choice.

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

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Former Orbitz CEO Barney Harford Is Uber’s New Chief Operating Officer

World Travel & Tourism Council  / Flickr

In this 2015 photo, Barney Harford, then president and CEO of Orbitz Worldwide, spoke at the World Travel and Tourism CouncilGlobal Summit. He subsequently sold his company to Expedia Inc. He is now joining Uber as COO. World Travel & Tourism Council / Flickr

Skift Take: Uber boss Dara Khosrowshahi first met Barney Harford when they both worked at Expedia in the mid-2000s. A decade later, Harford sold Orbitz to Expedia. But can the two men in 2018 successfully shake off Uber’s all-too-often exploitative disregard for workers and the law? And can they make Uber profitable?

— Sean O’Neill

Barney Harford, the former chief executive officer of online travel site Orbitz, has been named chief operating officer at Uber Technologies Inc., making him the second-highest ranking executive at the ride-hailing company.

Harford, who sits on the board of airline company United Continental Holdings Inc., will oversee global ride-hailing operations, marketing, customer support, and the company’s food-delivery business. It’s the second major hire by Uber’s new CEO Dara Khosrowshahi, who in October appointed Tony West, PepsiCo Inc.’s general counsel and a former U.S. Justice Department official, as Uber’s chief legal officer.

“There is a broader societal benefit here and fundamentally that’s the kind of thing I’m attracted to,” Harford said in an interview. “It is very clear that the way the company was run before is not acceptable and we absolutely need to change. I know Dara’s way of operating and he knows mine.”

Harford has worked for and competed with Khosrowshahi in the online travel business. In 2004, Harford became president for Asia Pacific at Expedia Inc., where Khosrowshahi became CEO in 2005. When Harford took over troubled, debt-laden Orbitz Worldwide Inc. in 2009, he became one of his former boss’s chief rivals.

“Dara and I were both super competitive,” Harford said. “Through all that we remained good friends. That’s just business. That’s just competition. We compete aggressively but we compete in the right way.”

Harford sold Orbitz to Expedia in 2015 for $1.6 billion. Harford has been working as a senior adviser to Khosrowshahi at Uber since October.

Harford will have to help figure out how to turn Uber into a profitable business, or at least stymie the company’s losses. Uber lost $1.5 billion in the third quarter of this year, up from $1.1 billion in the prior quarter. Net revenue increased to $2.01 billion in period, up 21 percent from the previous quarter.

“Obviously Uber is a large global complex business and these two have both proven their intellectual and leadership chops in large global businesses,” said Altimeter Capital CEO Brad Gerstner, who was a major shareholder in Orbitz and helped recruit Harford to United’s board.

When Khosrowshahi started at Uber in September, he told employees he was leaning against picking a COO. Khosrowshahi joined Uber after a series of scandals forced the company’s co-founder Travis Kalanick to resign as CEO.

Khosrowshahi’s first few months on the job convinced him that he had to take a different role than the one he played at Expedia. Uber required a CEO who was more a public face of the company. Khosrowshahi was meeting with regulators in London who had revoked Uber’s license when he had to work with the board of directors over a deal for SoftBank Group Corp. to invest in the company. Later, he visited Brazil to win over lawmakers there.

Bill Gurley, a former Uber board member, said venture capital firm Benchmark ranked Harford among the tech industry’s top CEOs. “Having someone who thinks obsessively about the right business model, the right pricing strategy, all those things are super, super valuable,” Gurley said. “I’ve been trying to find a way to work with him.”

Harford will oversee Uber’s trio of powerful regional general managers — Rachel Holt, Andrew Macdonald and Pierre-Dimitri Gore-Coty — along with Jason Droege, who heads food-delivery and other Uber businesses.

Uber’s board is searching for an independent chair. Board members David Trujillo, Wan Ling Martello and Garrett Camp are spearheading that effort. Khosrowshahi is also looking to hire a chief financial officer.

“This is a business that is at really substantial scale that continues to grow really attractively. It’s a business where the focus really has been on growth rather than making the business function more efficiently, more effectively,” Harford said. “There are so many things that are just calling out for us to go in and improve to achieve operational discipline to allow us to streamline costs.”

©2017 Bloomberg L.P.

This article was written by Eric Newcomer from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

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Uber Suffers a Blow as EU Court Decides It Is Actually a Transport Company


Uber has said that the ruling will not change things in “most EU countries”. Uber

Skift Take: The millions of people who use Uber every day to get from one place to another will not be shocked to discover that the company is in the transport business. Now that a European court agrees, Uber must make the necessary adjustments.

— Patrick Whyte

Uber Technologies Inc. suffered a defeat when the European Union’s top court ruled its ride-hailing service should be regulated as a transport company, a decision that could set a precedent for the burgeoning gig economy.

The EU Court of Justice said Wednesday that the world’s most valuable startup should be regulated as a transport service even when drivers aren’t professionals and using their own vehicles. The company says most of its products are already covered by such regulations.

The decision, which can’t be appealed, clarifies for the first time that connecting people via an application to non-professional drivers forms an integral part of a transport service. It rejects Uber’s view that such services are purely digital.

In the EU judges’ view, “the most important part of Uber’s business is the supply of transport — connecting passengers to drivers by their smartphones is secondary,” said Rachel Farr, senior employment lawyer at law firm Taylor Wessing. “Without transport services, the business wouldn’t exist.”

Uber has argued that it’s a technology platform connecting passengers with independent drivers, not a transportation company subject to the same rules as taxi services. The case has been closely watched by the technology industry because of its precedent for how firms in the gig economy ought to be regulated across the 28-nation bloc.

While the ruling is valid EU-wide, it remains limited to Uber’s actual services and won’t directly affect other disputes Uber is facing over how its drivers are treated. One such case is pending at the U.K. court of appeal.

Millions of Europeans

“This ruling will not change things in most EU countries where we already operate under transportation law,” Uber said in a statement. “However, millions of Europeans are still prevented from using apps like ours.”

Wednesday’s case centered around UberPop, an inexpensive ride-hailing service in several European cities that allowed drivers without a taxi license to use their own cars to pick up passengers. Legal challenges have forced Uber to shutter UberPop in most major European countries in favor of UberX, which requires drivers to get a license.

Uber isn’t the only business model being questioned by policy makers. In Paris, regulators are clamping down on Airbnb, whose home-rental service has drawn complaints from hotels that are subject to a different batch of rules. Deliveroo, the food-delivery service, is also facing scrutiny over its treatment of workers in the U.K. and elsewhere.

Gig Economy

“We regret the judgment effectively threatens the application of harmonized EU rules to online intermediaries,” said Jakob Kucharczyk, of the Computer & Communications Industry Association, which speaks for companies like Uber, Inc., Google and Facebook Inc.

“The purpose of those rules is to make sure online innovators can achieve greater scalability and competitiveness in the EU, unfettered from undue national restrictions,” he said. “After today’s judgment innovators will increasingly be subject to divergent national and sectoral rules. This is a blow to the EU’s ambition of building an integrated digital single market.”

Europe is taking a stricter approach to regulating American tech giants. German regulators this week accused Facebook of violating antitrust laws by using data it collects on users, while France’s top privacy regulator told WhatsApp to stop sharing user data from the app with Facebook, which bought the messaging service in 2014. The European Commission has also targeted Google, Apple and Amazon over their business practices and tax affairs.

Boardroom Battle

The ruling adds to the challenges facing Uber CEO Dara Khosrowshahi, who wants to take the company public by 2019. Since joining in August, Khosrowshahi has faced a boardroom battle with Uber co-founder Travis Kalanick, a headline-grabbing lawsuit alleging the company stole autonomous car technology from Alphabet Inc.’s Waymo, various government investigations, the threat of losing its taxi license in its biggest European market of London, and revamping a company culture considered unwelcoming for women, among other controversies.

Meanwhile, the company continues to lose money and faces a growing roster of well-funded rivals, from Lyft in the U.S., to China’s Didi Chuxing in Asia.

The case is: C-434/15, Asociacion Profesional Elite Taxi.


©2017 Bloomberg L.P.

This article was written by Stephanie Bodoni and Adam Satariano from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

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Travel Management and Event Consolidation Is Edging Out Departmental Turf Wars

Marla Aufmuth/TED  / Flickr

The crowd at TEDActive 2015 in Whistler, Canada. Meeting planning departments are merging with the travel management function at large corporations. Marla Aufmuth/TED / Flickr

Skift Take: Convergence is trending among travel and event departments at big companies. Fueled by technology, it will only become more important to both sectors in the future if old-school thinking doesn’t get in the way.

— Andrew Sheivachman

There’s so much overlap between travel management and event spending that corporations are increasingly combining the functions.

This consolidation is happening quickly in a bid to increase savings and corporate efficiency. With air and hotel costs on the rise, sustained savings are a focus among stakeholders across organizations.

The Global Business Travel Association and Cvent polled 124 North American event planners and travel managers who are at least “somewhat involved in meetings, events, and travel at their organization” for a report titled Consolidation Two Years Later: Shifts, Trends, and Status Quo.

Research found that the consolidation of travel, meetings, and event programs has grown 62 percent since 2015; by 2019 two-thirds of programs will be fully consolidated if trends continue, according to those polled.

This makes sense given the larger trends of the corporate travel and events industries; technology, along with analytics and data solutions, are allowing stakeholders to make smarter decisions about travel spending and planning.

“Patience is key when it comes to consolidation,” said Kate Vasiloff, GBTA research director. “Consolidated programs have enjoyed incredible successes, but the benefits may not come immediately. Travel managers and event planners with consolidated programs report greater success now than they did two years ago, making the value of consolidation well worth the time and investment it takes to implement, troubleshoot, and streamline a unified program.”

Legacy Organizational Issues

This consolidation is also happening across a wider variety of institutional programs than in 2015, but organizational issues remain an impediment. It can be hard for related groups to get on the same page if they are siloed from each other or report to different leaders.

Turf battles can get in the way.

When it comes to reasons for not consolidating, 76 percent said that meetings, events, and travel groups simply don’t report to the same department. Another 66 percent cited problems with aggregating data across different groups, while 47 percent said stakeholders weren’t aligned on business and technology goals.

Technology platforms that are shared among divisions can help ease some of these difficulties, acting as a compromise between full integration and nothing at all.

“If full consolidation is not an option at this time, investigating and implementing use of management technologies may bring travel managers and event planners some of the valuable benefits of consolidation,” states the report. “Overall, there has been a tremendous increase over the past two years in travel managers and event planners with non-consolidated programs finding meeting and event management technology attractive, possibly in part due to two prominent industry trends: data capture and attendee experience.”

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