Aman Hotels Will Enter the New York City Market in Targeted Urban Push

Aman Hotels

The lobby of Aman’s property in Tokyo, which was the first urban hotel in its portfolio and is the model for the planned expansion to New York City. Aman Hotels

Skift Take: The Aman model of creating sanctuaries in remote settings has proven quite successful since the company’s founding in 1988. But now, Aman is looking to translate its ethos into urban spaces.

— Laura Powell

Aman Hotels is expected to officially announce this week that it is opening a hotel in Manhattan. However, the New York real estate scene has been buzzing about the possibility of Aman’s first urban venture in the United States (Aman has resort properties in Utah and Wyoming) for some time.

Vladislav Doronin, the Russian mogul who owns Aman, purchased the upper floors of the Crown Building, located at 5th Avenue and 57th Street, two years ago. OKO Group, Doronin’s international real estate development firm, is awaiting the okay from New York City officials to begin work on what will be an intimate hotel with a score of ultra-luxury condominiums.

Known primarily for its idyllic hotels located in remote locations, the New York project is part of Aman’s new tack into cities. Although Aman already has a hotel in Tokyo that opened at the end of 2014, that Aman has a specific urban game plan is somewhat new, according to Roland Fasel, chief operating officer. “Up until three or four months ago, we didn’t have a strategy. The magic of the brand has always been that it hasn’t been forced” and growth has been somewhat organic.

>> Fasel spoke at Skift Global Forum last month. You can read about his comments here

But now, says, Fasel, while Aman continues to pursue its “pathfinder spirit, looking for new destinations to open up in South America and Africa,” the idea of bringing the brand into big cities “needs more of a strategy and a structure in the business,” given the challenges with getting investment and development approvals in urban areas.

While Fasel says the urban hotels will have more rooms than remote resorts (Tokyo has 84 rooms; Manhattan is expected to have about the same), the pillars of Aman will still be supporting these city sanctuaries.

Among those pillars, notes Fasel, are high-touch service, creating experiences that derive from the local DNA, a holistic wellness component, uncomplicated luxury and understated elegance, and generosity of space. The orienting ethos of it all, says Fasel, is the idea of welcoming people into a home.

In that regard, Aman Tokyo may be a role model. Guest rooms, lofty sanctuaries in the sky, are modeled after traditional Japanese residences. The smallest rooms are 764 square feet, larger than the norm. Room rates are also higher than the norm, at 70 percent above Tokyo’s average daily rate, according to Fasel. A large spa offers locally-inspired treatments, while the pool area on the 34th floor provides stunning views of the Tokyo skyline and Mt. Fuji beyond.

All of the urban builds will have a residential component, although that’s not really a new concept for Aman, and is now a norm for new luxury builds. According to Fasel, since the time the brand started in 1988, the resorts have always included villas or condominiums for sale. That said, in urban spaces, he says, “the cost of entry is so high in major cities that we have to have a residential space.”

Fasel expects the urban client mix to favor the business traveler, although leisure travelers will be well-represented. Having a presence in large cities may also increase brand recognition, which, Fasel says, “will catapult the brand to next level.”

That said, don’t expect an Aman in every major city. According to Fasel, “there are only a handful of cities where we can justify entering.” But in those places that rate an Aman, Fasel says the brand will bring “a small piece of paradise” into otherwise frenetic and congested places.

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The New Luxury Vacation Is Crunchier and Quieter

Scribner's Catskill Lodge

A living room where guests relax at Scribner’s Catskill Lodge. Scribner’s Catskill Lodge

Skift Take: As guests seek personalization, authenticity, and experiences outside their daily grinds, these well-designed outdoor lodges hit a sweet spot by maintaining a low profile that appeals to their customers’ underlying desire to disconnect.

— Samantha Shankman

Luxury no longer only means opulence as a new generation of travelers — and older travelers with shifting priorities — seek out a different means to satiate their desire for peace and calm.

Two new lodges opened outside of New York City typify the type of popular alternative that  luxury clients are choosing these days in addition to or in place of an all-inclusive resort or even five-star staycation.

These often remote accommodations offer healthy cuisine designed with local ingredients in mind, offer quiet respite for an always-connected clientele, and feed into a basic need to disconnect. Most guests are young, between 20 and 40 years old, and come from major urban areas within driving distance. The majority come from New York, but others make the drive from Philadelphia and Boston.

Foreign travelers are also starting to come in greater numbers, explains the lodge owners we spoke to, pairing the countryside stay with a larger trip to New York.

“Weekends are most coveted and are booked the furthest in advance,” explains Casey Scieszka, Head Innkeeper at the Spruceton Inn,” but we also get plenty of midweek guests. These are people who have taken vacation time, people with jobs with flexible schedules or non-traditional weekends — think bartenders, artists.”

Spruceton Inn describes itself as a “Catskills Bed and Bar” located two and half hours from New York City. The lodge, which opened in August 2014, has 9 rooms — which Scieszka managed solo for the first three weeks of opening.

It’s not just customer appetite that is driving these changes. Building a small, local hotel in a major market like New York is nearly impossible.

“As the cost of living and operating businesses in these large cities has increased, more people from the hospitality industry are leaving them to go to secondary, tertiary and destination locations. This is increasing the supply of amazing restaurants and hotels for urban dwellers to visit,” explains Marc Chodock, co-owner of Scribner’s Catskill Lodge.

Located a two-hour drive outside of New York, Scribner’s is a larger operation with 28 guest rooms and suites and gained notoriety quickly after opening last year. Its mountain aesthetic quickly caught the attention of Instagram-scrolling city dwellers.

The lodge has nearly 12,000 Instagram followers but Chodock says its guests’ posts that have the biggest impact.

“While some lodge guests find us through our social media page, many of our guests have discovered us by seeing their friend’s photos pop up on their feed while they’re visiting the property,” says Chodock.

The photos relaying a place of peace play a huge role in inspiring visitors to make the journey.

“The biggest role that social media plays in this business is in helping us get the word out. We are five miles down a seven mile dead end road in the middle of the Catskill Park so it’s not like we’re going to get a lot of drive-by traffic, ya know?” says Scieszka.

While the cost of operating the business is lower outside of main markets, it can be tougher to find talent.

“The most difficult aspect is being able to attract quality managers and staff. The initial concept and design can only take a property so far. Guest’s interactions with our team and the quality programming that we create and execute on is what will lead us to long term success,” says Chodock who now employs 50 people.

The smaller nature of the lodges gives staff more of an opportunity to interact with guests, giving them the sensation of a personalized stay while at the same time giving them the space and sense of exploration that Airbnb-style has encouraged them to seek.

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New Skift Research Report: Key Emerging Outbound Travel Markets 2017

Skift Take: As developed markets reach their saturation point in international travel expenditure, emerging markets are heading towards the pole position.

— Dave Montali

Today we are launching the latest report, Key Emerging Outbound Travel Markets 2017, for our Skift Research subscribers.

In our latest report, we dive into outbound tourism across the world and explore the growth and changes it has seen over the past decades. We identify markets which have a strong growth potential and project growth estimates based on historic performance as well as current economic and political developments in those markets. We also project how large these markets may become if they reach a level of saturation similar to that of developed countries today.

On a global level, international travel expenditure (ITE) has roughly tripled over the past two decades, growing from just $462 billion in 1995 to $1.3 trillion in 2015. This growth is strongly correlated with economic development around the world. Globalization and free trade have also allowed for more cooperation between governments, ultimately playing a major role in the issuance of visa and immigration agreements among countries. ITE has also seen a shift in terms of where the expenditure is coming from. Just a decade ago, developed markets accounted for 70 percent of all ITE. In 2015 the number shrunk to just 51 percent.

The change has mostly come from the developed markets reaching saturation on the ITE front and the emerging markets beginning to see some growth. Small changes in some emerging markets can impact global ITE due to the sheer populations of these markets. China alone accounted for almost half of all non-OECD ITE in 2015.

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While the emerging markets are increasingly gaining share of global ITE, the growth is still at very early stages. When observing these markets by a spend per capita some regions such as India only have an ITE per capita of $13.51, indicating that international travel is still a luxury reserved to the upper classes. Even in China, which has seen such strong growth over the past decade, only an estimated 8.7 percent of citizens even possess a passport. The robust growth in these markets is likely to come along with economic development as the living standards of average citizens increase.

What you’ll learn from this report:

  • Overview of global International Tourism Expenditure
  • Tourism’s shift from developed to emerging markets
  • Key markets with potential for growth
  • Travel related developments in the markets
  • Growth potential of the markets
  • Saturation level of the markets

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The countries we explore in the report are: China, South Korean, India, Indonesia, Russia, Turkey, Brazil, and Mexico. We selected the countries based on both how much growth we estimate there to be in the markets as well as how likely socio-economic events are to allow or interfere with the growth. As we observe in every country we analyze there is a strong correlation between economic growth and ITE.

Subscribe to Skift Research Reports

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

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

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Denmark Moves to Integrate the Sharing Economy Into Its Legal System

Freya Ingrid Morales  / Bloomberg

Whether it is apartment rentals or boating, Denmark has come around to see the potential of the sharing economy and wants to regulate its use. Freya Ingrid Morales / Bloomberg

Skift Take: Denmark has had some rough-going with the sharing economy, but now it seems a potential for economic growth. Its attitude seems to be, if you can’t beat ’em, then regulate ’em.

— Dennis Schaal

Denmark wants to bring the so-called sharing economy into its legal codex so that companies like Uber and Airbnb can be absorbed into the Scandinavian welfare model.

The Danish government sees little point in resisting the changes these companies represent. Instead, it’s putting forward a number of measures designed to fold the business concept into its tax and labor laws.

“If you want people to understand the prospects, in terms of new jobs and new technology, then it also has to contribute to the financing of the welfare society we live in,” Business Minister Brian Mikkelsen said in an interview in Copenhagen on Monday. The ministry estimates that about one-fifth of Danes have either offered or consumed the kinds of services provided by Uber and Airbnb, a proportion Mikkelsen says is bound to increase.

Denmark’s manifesto on how to handle the sharing economy comes as other governments consider bans on key parts of it. UberPop, a version of Uber that lets people to give rides without holding a license, has been suspended in France, the Netherlands, Finland, Sweden and Hungary. In Norway, the government is looking into ways to come up with new regulations to deal with the app. Meanwhile, transport authorities in London have revoked Uber’s license and threatened to ban the service.

In Scandinavia, where citizens prize the regulations that protect their welfare state, representatives of the sharing economy had been on a collision course with the rules that ensure workers’ rights and tax collection.

Uber left Denmark this year, and a number of its drivers have been fined for breaking local taxi laws. That followed new licensing rules, as well as requirements for seat sensors and meters. Uber has since told public broadcaster Danmarks Radio it hasn’t given up on doing business in the country.

“The lesson we learned from Uber was that our legislation wasn’t designed in an appropriate way” to deal with such newcomers, Mikkelsen said. “We need to make sure that our laws are more agile and better prepared for the future.”

Airbnb, a service that lets private citizens rent out their homes, has also been under scrutiny amid concerns people are essentially working as commercial landlords without any of the tax ramifications such a profession entails.

Denmark said on Monday that homeowners will be free to let their properties for at least 90 days a year. A voluntary tax program will be introduced, and the deductible base raised. Danish Tax Minister Karsten Lauritzen talks on the new legislation included meetings with Airbnb.

The Danish government estimates the domestic market for shared services in housing and transport was worth as much as $100 million in 2015, compared with more than $30 billion in the European Union.

Far from being an economic model to curtail, Mikkelsen says the sharing economy “can be expanded to all kinds of services, like renting bikes and tools, not just cars and apartments.”

“The potential is enormous,” he said.

©2017 Bloomberg L.P.

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

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Why Online Travel Agencies Will Line Up Against Blockchain Adoption

Skift Take: The online travel agencies — as the Apex Predators and beneficiaries at the top of the current distribution scheme — aren’t likely to rush in to invest in a technology that democratizes access to travel content.

— Dennis Schaal

Glenn Fogel, CEO of the Priceline Group, has brushed off the threat of Blockchain to his business.

Fogel’s commentary, which took place on stage at the Skift Global Forum last month,
felt a lot like the early onset of the Innovator’s Dilemma, which sees market-leading companies usurped by new technologies and competitors. The CEO of a $94 billion public company has many things that keep him up at night, and a relatively nascent technology, BlockChain, which is arguably at the peak of inflated expectations, should not be particularly worrying for him over a two-to three-year horizon.

Don’t expect online travel agencies to necessairly rush into any decentralizing technology such as Blockchain. The reality is the online travel agencies sit at the top of the 50-year-old distribution-food chain like Apex Predators (and innovators). They are beneficiaries of the barriers to entry that the modern distribution environment places on access to content. This is compounded by an increasingly expensive customer acquisition landscape.

Viewed within the context of greater historical decentralization that has been driven largely by the Internet, Blockchain — or future iterations of the technology — feels like an inevitable progression. It’s a technology that allows for the dispersal of functions, powers, people or things away from a central location or authority, while importantly maintaining trust.

Startup barriers to entry

A common belief among Silicon Valley investors is that travel startups (with very few exeptions) are radioactive, and are best-approached with extreme caution. History has not kind to the travel startup ecosystem: Many have tried, most have failed, and the select few that succeeded have been especially well-capitalized or incubated by airlines or hotels.

While founders must take the blame for me-too, hammer-looking-for-a nail-type thinking that permeates the travel-startup ecosystem, the reality is there are plenty of talented developers, designers, and entrepreneurs who have faced significant barriers to entry imposed by the modern distribution environment. That’s to the potential detriment of consumers.

Many will counter that there has been a tremendous amount of innovation, and it’s never been easier to book travel across the globe — and they’re right. If we plot the industry’s performance over time, we appear to be on a fairly typical, if elongated, S curve, what might be thought of as Distribution 1.0.

The global distribution systems delivered significant transformations in content access and booking ease, followed by a wave new entrants such as the online travel agencies piggybacking off of Internet and mobile disruptions. Fundamentally, however, they’re built off of the base of the Distribution 1.0 model that provides significant incentives to online travel agencies and along with it market power that makes it extremely difficult for new players, under the current system, to break in.

The reality is we may be approaching, or in fact may have reached the limit, of what is possible using this platform.

Source: Chris Sandstrom

My belief is that future customer-booking experience innovations or multi-mode travel use cases may only be delivered on the back of Distribution 2.0 and new standards environments. This is a transition that is similar in scale and benefits to the current migration from internal combustion to electric vehicles.

 hIstorical arc of decentralization

Blockchain, like other transformational technologies before it, creates the perfect breeding ground for a Travel Distribution 2.0. That’s assuming the community of developers can figure out scalability, and other technological barriers.

On one hand, it has the potential to enable democratized access to travel content, including availability and pricing, while simultaneously facilitating a new generation of targeted, demand-side agency models and players.

Given the rapidly iterative nature of the technology and the community of developers that will be activated, I expect a few travel Blockchains, or markets, will be developed. The healthiest of these will be the market-makers, which will nurture and provide the right incentives and standards for suppliers, agencies, and travelers alike.

The new CEO of Expedia, Mark Okerstrom, said at Skift Global Forum that the measure of Blockchain technology is going to be whether it will be “cheaper or better.” As of now, it is simply too early to tell.

However, the online travel agencies — as the Apex Predators and beneficiaries at the top of the current distribution scheme — aren’t likely to rush in to invest in a technology that democratizes access to travel content.

Other scenarios, too, may take place.  A likely starting point in the Blockchain for both the agencies and the distribution-system providers is the creation of private Blockchains —think of it as the Intranets versus the Internet — to facilitate global transactions and settlement between them and their partners. These could be useful, although not transformational.

Mohammad Gaber is senior director, marketing and digital strategy at Air Canada, and a Winding Tree advisor. These opinions are his own.

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China Challenges WTTC With Launch of Global Tourism Group

Visit China

A celebration to mark China National Day on October 1, 2017. China has launched a new tourism group, the World Tourism Alliance. Visit China

Skift Take: China has initiated the formation of a new world tourism organization. The UNWTO, WTTC and PATA are exceedingly polite about it, but there are undercurrents of uneasiness about how much influence the new China-led World Tourism Alliance can wield.

— Raini Hamdi

Editor’s Note: Skift launched a series, Gateway, as we broaden our news coverage geographically with first-hand, original stories from correspondents embedded in cities around the world.

We started with regular reports several times per month from tourism hubs Beijing, Singapore and Capetown. Gateway Beijing and Gateway Singapore, for example, signify that the reporters are writing from those cities although their coverage of the business of travel will meander to other locales in their regions. Read about the series here, and check out all the stories in the series here.

In a potential game-changer, China is flexing its tourism muscle as it launched a new global tourism organization that could challenge the incumbents.

Global travel and tourism has a new watchdog based in Beijing with 89 founding members – national tourism organizations, influential tourism companies, think tanks, international organizations, research institutes, it says — and more than 60 per cent them are based outside of China. Members hail from the U.S., France, Germany, Australia, South Africa, Japan, and Brazil.

If the new World Tourism Alliance weren’t led by China — the world’s largest outbound travel market — many would dismiss its challenge to the UN World Tourism Organization and the World Travel & Tourism Council. But from its onset, the World Tourism Alliance has a fraternity that would take these established tourism bodies years to build.

The entry of the World Tourism Alliance could shake things up, said a source who is familiar with China but agreed to be interviewed only on the condition of anonymity. “China is peddling soft power, recognizing that as the world’s leading outbound market, the time has come to show influence.”

China Launches New Global Tourism Group to Rival WTTC

The World Tourism Alliance debuted in Chengdu, China right under the nose of UNWTO during its 22nd General Assembly in the city. That the alliance is important to China and came right from top leadership is evident. China’s Premier Li Keqiang sent a congratulatory message for its inauguration, according to the China National Tourism Administration. 

The Makings of a New World Tourism Body

It’s not clear when the planning for the World Tourism Alliance began, but China National Tourism Administration chairman Li Jinzao led the organizing committee to create the new organization.

The World Tourism Alliance will have a general assembly, which acts as “the supreme authority,” and a board of directors and a secretariat with a secretary-general and subordinates, all based in Beijing. The working languages are Chinese, English, French, Russian, Arabic and Spanish.

It has elected its first chairman, Duan Qiang, who is the president of Beijing Tourism Group and also the World Travel & Tourism Council’s vice chair for China.

The World Tourism Alliance sees itself as a “global, comprehensive, non-governmental, not-for-profit international tourism organization.”

China Daily cited Duan as saying that the World Tourism Alliance was a natural outcome from a country that’s becoming increasingly influential in the development of the world tourism industry.

Tourism now accounts for more than 10 per cent of China’s economy and employment. In the next five years, Chinese tourists will make 700 million outbound trips, said China’s President Xi Jinping in a lletter to the UNWTO general assembly. China pays great attention to the development of the tourism industry, he said.

Inbound-wise, China is fourth in international arrivals after Spain, the U.S. and France, with 59.3 million visitors in 2016, according to UNWTO provisional figures.

Do we need another watchdog?

The UNWTO and WTTC have a chummy relationship and have formed a coalition that includes the Airports Council International, Cruise Lines International Association, International Air Transport Association, International Civil Aviation Organization, Pacific Asia Travel Association, and the World Economic Forum. That’s a fairly comprehensive, global configuration that has proven it can speak with “one voice” on tourism issues.

“Although, the World Tourism Alliance says it is non-governmental, it is strongly supported by the government,” said the source. “It is led by the Beijing Tourism Group which, although now privatized, has its origins as a state-owned enterprise, and once a state-owned enterprise, forever a state-owned enterprise. There isn’t any other global association that can boast such government support.”

How will this impact the incumbents?

“The big question is how this will impact the UNWTO, WTTC and PATA. UNWTO is government; WTTC is a club for the private sector bigwigs. PATA, which is a hybrid, may be more impacted. It should initiate a dialogue to explore how it could collaborate with WTA before it gets too powerful.”

The source said the World Travel Association will have advantages over its rivals in that it will  be influenced by the Chinese government, and national tourism organizations won’t be in a position to ignore it given China’s influence on global tourism.

“Secondly, China will commit resources, financial or otherwise to WTA, and no other association can match that. WTA does not need to be commercially driven, whereas the others all have to. In challenging trading conditions, some organizations may not have the luxury of engaging say both PATA and WTA and will be forced to choose.”

A Warm Embrace?

UNWTO and WTTC have so far not openly addressed whether World Tourism Alliance is needed, and both hav embracing it with open arms.

WTTC president Gloria Guevara said in an email interview: “WTTC welcomes this new initiative from China, which highlights the Chinese government’s commitment to growing travel & tourism. WTA, different in its constitution from either UNWTO or WTTC as both organizations are global in their mandate and represent governments and the private sector respectively. It will be a welcome addition to pushing for greater recognition of travel and tourism.

“WTA aims to bring together stakeholders from across government, private sector and academia to share best practices and research within China and the region, and WTTC looks forward to working with Mr. Duan Qiang, chair of WTA and WTTC vice chair for China. Together we will enhance our focus on maximizing sustainable growth of the tourism sector in China and Asia.”

Taleb Rifai, UNWTO’s outgoing secretary-general, said: “We consider that it will contribute to advance cooperation in our sector, which is a key to make it ever more sustainable and competitive. Any form of cooperation can only be for the benefit of our sector.

“We trust that the same way there is a strong coordination among UNWTO, WTTC and PATA the same will apply to World Tourism Alliance which will reinforce our capacity to speak on the benefits of our sector.”

PATA’s CEO Mario Hardy said he’s aware of WTA, adding, “The future will tell us what role they will play on the global tourism scene.”

The One Belt and One Road Initiative

The birth of World Tourism Alliance also fits in with China’s One Belt, One Road Initiative, which aims to connect 65 countries across three continents – Asia, Africa and Europe – to China through Europe-Asia continental roads, and sea routes through the South China Sea and Indian Ocean. Travel and tourism figures heavily in this initiative, and massive investment is needed on infrastructure development.

China also initiated the creation of the Asian Infrastructure Investment Bank in October 2013 to further the initiative.

When Asia Infrastructure Investment Bank emerged, like the World Tourism Alliance, was it drew nervous reactions that it might usurp the role of the World Bank, the Asian Development Bank, or the European Bank for Reconstruction and Development. That didn’t  — or hasn’t — happened.

World Tourism Alliance says the alliance and UNWTO are “two wheels driving global tourism exchange and cooperation at the governmental and non-governmental levels.”

Time will tell.

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Airline Data Powerhouse Needs to Evolve as Fast as Airfares Have

ATPCO

Rolf Purzer became CEO of ATPCO in February. He’s shown here at his office at the Dulles Airport headquarters near Washington, D.C. He’s aiming to rev up the metabolism of the airline-owned organization that manages the flow of air travel data worldwide. ATPCO

Skift Take: The fare-filing clearinghouse ATPCO needs to adapt to airline distribution’s rapid changes. Much depends on whether its new CEO can boost the organization’s metabolism.

— Sean O’Neill

Everybody in the airline industry knows that the Airline Tariff Publishing Company, or ATPCO, is important. But, let’s face it, not many people know precisely what it does.

At least, not many know outside of the airlines which own it and the 437 employees who work for it — most of whom are at its headquarters at Washington Dulles International Airport.

Those industry folk who do understand know that the organization is an industry clearinghouse for airfare data. And many of them think that it needs to evolve more quickly than it has for what seems like eons.

Brett Snyder of the airline industry blog Cranky Flier and a former pricing analyst for now-merged US Airways, said: “It sounds like a place that is searching for a way to remain relevant in a world where fare distribution won’t be as tightly controlled as in the past.”

Founded in the late 1960s, ATPCO focuses on serving as a database for airfares, including all the rules surrounding them. The rise of the Internet led to a proliferation of fares.

Today, ATPCO distributes up to 3.9 million fare changes a day, on average. It has 111 airline customers in Asia-Pacific, 119 in the Americas, and 206 in Europe. It takes their data, standardizes it, and distributes it on to other businesses that help with distribution, such as Amadeus, Sabre, and Travelport, online travel agencies, and metasearch companies.

But airlines will soon be creating products at a seemingly exponential rate.

That’s because airlines are rolling out branded fares; new ancillaries, such as fees for stowing a bag in an overhead bin; and pricing that caters to groups of travelers with similar tastes or behaviors.

Over time, airlines may not pass all that data through ATPCO.

Snyder said: “[The organization] needs to change, and it knows that. The problem is finding out exactly where it belongs in the new world.”

Until now, ATPCO has benefited from industry conventions that encourage a centralized process for data flows.

One supporting factor has been the full-content agreements demanded by the three largest airline distribution middlemen, known as the global distribution systems. (See Skift’s report: Channel Shock: The Future of Travel Distribution.)

Contracts have required, in essence, that airlines must provide the same fare to travel agencies as they provide through other channels.

But these contracts have been watered down over the years.

Robert W. Mann Jr., an aviation analyst in Port Washington, New York, said, “APTCO risks becoming less relevant as airlines break full-content agreements with global distribution systems and distribute some products digitally off of the ATPCO menu.”

Already, some airlines do not file all of their content with ATPCO, and a few smaller ones don’t participate at all.

New technologies are emerging, too. More sophisticated practices for sharing information are being agreed on among airlines as part of a so-called New Distribution Capability being championed by the International Air Transport Association.

Hovering in the shadows is the promise of blockchain, or distributed ledger technology, which could, in principle, offer a more flexible alternative to ATPCO’s paths.

“I don’t necessarily think that the incumbents have to go away, absolutely not,” said Maksim Izmaylov, founder of Winding Tree. “They will have to change their business models drastically, though.”

A Pricing-Based Pivot

On Tuesday, ATPCO opens its annual conference for industry executives.

The event is something of a coming out party for new CEO Rolf Purzer, who became the top boss in February, succeeding Bill Andres, who had run the show for about a decade.

Purzer’s big effort is to position ATPCO as a resource for airlines attempting to do more with dynamic pricing and merchandising, such as by establishing industry definitions and frameworks so that everyone is in sync with best practices.

Purzer has taken several steps to lift the metabolism of the business-to-business data organization.

This year, ATPCO has picked up the pace when it comes to testing, planning, and unveiling solutions to create feasible solutions for dynamic pricing and the abilities to adjust promotions by passengers.

He intends to hire about 20 more software developers soon. He has introduced some of Silicon Valley’s practices for agile development to the existing team. He’s hired marketing and educational talent, too, including Kevin Fliess, formerly of Cvent, the events management company, and Room 77, a hotel metasearch startup.

These efforts, along with new branding, may energize ATPCO.

As the airlines want to move to new models of distributing and pricing their airfares and ancillary services, they need to decide exactly what it is that ATPCO should do.

Can it become a kind of pontoon that helps the industry move to a new era and then vanishes after it outlasts its usefulness?

Purzer has made the plausible claim that it would take at least a decade for digital transformation to bubble up through the airlines, leaving the organization with a lot of development work ahead. “Most airlines have given us every indication that they’ll want a hybrid model for many, many years to come,” he said.

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Global Business Travelers Agree the Biggest Hassle Is Time Spent in Transit

tokyoform  / Flickr

A woman is pictured on a train platform in Tokyo. Japanese business travelers tend to be unsatisfied with their experience. tokyoform / Flickr

Skift Take: Every business traveler hates delays and annoying layovers. There are pronounced regional differences in the value business travelers perceive during and after a trip, though.

— Andrew Sheivachman

When considering the most important trends in business travel, it can be difficult to distinguish between the general needs of business travelers and the preferences that emerge depending on where they’re from.

The Global Business Travel Association (GBTA) surveyed business travelers in North America, Europe, Asia, and Latin America to find how how priorities differ among travelers from various regions. GBTA, in conjunction with Sabre, polled hundreds of business travelers around the world while conducting interviews with travel managers and human resources personnel.

“When it comes to pain points and challenging aspects of business travel, travelers all around the world experience similar frustrations,” said Monica Sanchez, research director of GBTA. “When we looked at the perks, amenities and technology that improve the traveler experience, however, we began to see some differences.”

Here are three takeaways from the research.

Business Travelers Share the Same Annoyances

The top paint points for all business travelers are time spent in transit, layovers, changing a flight or train reservation during a trip, and the work environment when traveling.

Here’s a breakdown of the most difficult aspects of travel across all regions:

Most Difficult Aspects of Business Travel (% included in top 5)
Region
Challenges Asia Pacific Europe Latin America North America
Time spent in transit 56% 62% 66% 61%
Layover 33% 47% 57% 48%
Changing a flight or train reservation during my trip 44% 42% 46% 42%
Work environment while traveling 47% 40% 41% 41%
Preparing expense report 37% 34% 39% 37%
Working away from the office 35% 29% 25% 33%
Changing a lodging reservation during my trip 39% 34% 41% 29%
Meals 33% 25% 39% 27%
Pre-travel approval/gathering travel information 27% 19% 22% 22%
Travel debrief with travel department 29% 20% 24% 20%
Flight/train booking experience 22% 19% 17% 19%
Lodging booking experience 21% 15% 21% 15%

Travel as a Perk in Latin America

Workers from Latin America are most likely to view business travel as an attractive perk, increasing their satisfaction with their job. They’re also most likely to be concerned with safety when traveling.

“Travelers outside of North America, and especially those in Latin America, were more likely to say safety tracking apps enhance the business travel experience,” said Sanchez. “Asia Pacific travelers, particularly those in China and India, are very interested in live chat capabilities for travel policy inquiries.

“More so than in any other region, Latin American business travelers say their travel experience has an enormous impact on job satisfaction as 71 percent of respondents indicate that it impacts their overall job satisfaction to a great extent. This is much higher than the share in North America (32 percent) and Europe (34 percent).”

Asia-Pacific in Action

The elements of a trip that improve the experience, however, vary wildly depending on region.

Travelers from the Asia-Pacific region tend to spend on enhanced hotel Wi-Fi, which is less of a focus for other regions. They also prefer service while on the road via chat instead of phone or email.

Travelers from Asia-Pacific believe a better business travel experience will create better results for their company.

Business travelers from most regions are overwhelmingly satisfied with their experiences but those polled from Japan were least likely to say they are satisfied or very satisfied with traveling for business, although just over half saying they’re satisfied.

“No matter the country though, or the specific perks or amenities that may better improve the traveler experience in each region, it is important for travel programs to factor this in,” said Sanchez. “While well-being initiatives can cost money, they can also represent an investment that can improve a company’s bottom line.”

Ryan Wolkov

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Business of Loyalty: Hyatt Intends to Expand Program to Vacation Rentals

Oasis

The backyard of UK home Pantone, which is available through Oasis. Hyatt’s loyalty program will enable members to earns rewards when booking such vacation rentals. Oasis

Skift Take: It may soon be possible through Hyatt to earn hotel-loyalty program elite status by staying in a vacation rental.

— Grant Martin

World of Hyatt, the loyalty program from Chicago-based Hyatt hotels, is having a roller coaster year. Late in 2016, the program was completely overhauled to better award travelers who spend more rather than those who book more nights — a move that roiled some budget travelers.

In May, Hyatt’s head of loyalty stepped down. Only in September did the group finally appoint a new head of loyalty, Mark Vondrasek, the former lead from Starwood’s Preferred Guest program.

Despite the tumult, World of Hyatt has opened a lot of opportunities for Hyatt to experiment with new tools such as Member Experiences for guests. Now, the program may be expanding to include apartment rentals as part of the equation for earning loyalty points and status.

The partnership comes through Oasis, a network of boutique vacation rental properties not dissimilar to what Airbnb offers. In August, news broke that Hyatt had made a minority investment in an Oasis venture-funding round. Last week, Hyatt started integrating Oasis into its Unbound Collection, a series of boutique hotels and properties loosely associated with the Hyatt brand.

Hyatt announced the integration to its loyalty program members in an email, saying “The Unbound Collection by Hyatt is pleased to now offer home rentals through Oasis, a global leader in serviced home rental accommodations. With thousands of handpicked homes in over 20 destinations worldwide, Oasis combines the comfort and authenticity of home rentals with the service and amenities of a hotel — including in-person check-in and check-out, fresh linens and toiletries, and on-demand concierge services.”

The Unbound Collection also launched a landing page advertising the new integration with Oasis, calling it “a global leader in serviced home rental accommodations.”

By extension, Hyatt also seems to be intent on including properties from The Unbound Collection and Oasis in its loyalty program. The end of the email to loyalty members concluded that “Oasis is coming soon to the World of Hyatt program. We are actively working on adding the opportunity for members to earn and redeem points and enjoy benefits for stays at Oasis properties.”

Once the integration is complete, earning and redeeming loyalty points through Oasis may be the shot in the arm that World of Hyatt needs. So far, the program has received middling reviews throughout the year as many conclude that the program is best for the high-spend traveler.

U.S. News & World Report ranks the program number four in the country behind Marriott (and Starwood) and ahead of Hilton. If vacation rentals could be used to earn points and qualify for status with the hotel chain, however, budget travelers could find further reason to participate in the World of Hyatt — and the program’s utility could be restored to the wider market.

— Grant Martin

Skift Stories and More Expert Insight

Wyndham Rewards Loyalty Program Provides the Most Payback on Guest Spending: For the second consecutive year, Wyndham Rewards topped the annual Hotel Reward Payback Survey.

Loyalty-Program Fatigue and What to Do About It: According to the 2017 Colloquy Loyalty Census, the average U.S. household has 30 loyalty schemes, but 54 percent of them are inactive.

One Mile at a Time: This Is the Ideal Time To Request an Alaska Status Match: If you status match now your status will be valid through December 31, 2018.

Travel Skills: A New Offer From Best Western That’s Twice as Nice: Nearly every hotel chain has pushed out a fall promotion recently. One of the most unique and valuable this year is Best Western’s two-pronged offer.

Mommy Points: Amex Centurion Lounges Further Tighten Up Access Policies: In an effort to reduce the known issue of over-crowding in the lounges, access is now restricted solely to those who have an Amex Platinum or Centurion Card and their guests. The $50 Centurion Lounge day passes are no longer available for sale to those who don’t have a Platinum or Centurion Card.

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UK Tourism Industry Unites to Target Post-Brexit Growth

mendhak  / Flickr

Denbie’s Wine Estate in Dorking, UK. VisitBritain is looking to push the country’s wine industry. mendhak / Flickr

Skift Take: Coming together and trying to carve out a deal from the UK government makes sense for the tourism industry. The only problem with that is the country’s looming separation from the European Union, which is casting a shadow over its political and economic future.

— Patrick Whyte

UK tourism leaders are working on a deal to get wider recognition from the government, which they say could more than double the amount of money the industry brings in.

Tourism is often marginalized by politicians who don’t see it as a coherent entity, but the UK’s destination marketing organization VisitBritain and other stakeholders want to change all that.

Under new plans unveiled by the government earlier this year, different sectors can apply for deals to address issues and opportunities specific to their industry. While the government’s pledge “to offer a range of support” is vague, the tourism industry will undoubtedly benefit by becoming closer aligned.

This is especially important given the UK’s upcoming departure from the European Union and the concerns raised about its economic future.

As the sector deal submission to the government makes clear, tourism is actually in an advantageous position in that “it needs no trade deals” (although of course it is likely to be affected by any changes to the visa and aviation regimes as well as currency fluctuations).

Should the bid be granted, advocates say the UK tourism industry would have the potential to more than double in value to $352 billion (£268 billion) within a decade and increase employment to 3.8 million.

To help get it to that total, the industry has united around four priorities: boosting skills and recruitment; extending the tourism season and gaining market share in business travel and events; improving connections and make it easier for people to get around the UK; and creating tourism zones.

“Tourism is an economic powerhouse, worth $167 billion (£127 billion) annually to the economy and a job creator right across Britain. Two and a half times bigger than the automotive industry, employing three million, tourism is one of our most successful exports and needs no trade deals to compete globally,” said Steve Ridgway, the former Chief Executive of Virgin Atlantic Airways, who is chairman of the British Tourist Authority and is leading the tourism industry’s bid for a deal.

“Tourism is a fiercely competitive global industry and you cannot just build a strong, resilient industry on a weaker currency,” Ridgway said. “We must continue to invest in developing world-class tourism products, getting Britain on the wish-list of international and domestic travelers. And we must make it easy for visitors to make that trip.”

Inbound Growth

The UK’s plans to attract more visitors comes during a bumper year for overseas arrivals.

In the first seven months of the year, there were a record 23.1 million overseas visits to the UK, up 8 percent on 2016 with visitors spending $17.5 billion (£13.3 billion), up 9 percent.

Part of this is likely to be down to the pound’s depreciation against currencies such as the euro and dollar in the aftermath of the Brexit referendum in June 2016.

While that has made it more expensive for Brits to travel abroad, visitors are finding their cash now goes a lot further in a destination often regarded as expensive.

It is one of the unintended consequences of the vote that has worked in the sector’s favor. Less appealing is the uncertainty over EU nationals who make up at least 15 percent of the work force, according to the British Hospitality Association.

To achieve the figures touted by tourism leaders, the sector not only needs support from the government but also new ways to lure visitors. VisitBritain has identified a number of marketing misses that the organization is hoping to put right with future campaigns.

Food and wine tourism, luxury, and rail travel are the three areas that VisitBritain hopes to grow into.

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