Lufthansa Is No Longer Alone in Its Battle Against Airfare Middlemen

Ukrainian International

Ukraine International is the second airline company after Lufthansa Group to tack on a charge to bookings made via global distribution systems. Ukrainian International

Skift Take: Ukraine’s flag carrier is the first airline to follow Lufthansa’s bold September 2015 move to add a surcharge to bookings made via third-parties. Yet the industry may be overstating the threat to the revenue of the middlemen.

— Sean O’Neill

In the past week Ukraine International Airlines quietly joined Lufthansa Group’s skirmish with the middlemen who distribute airfares through most travel agencies worldwide.

As of April 19, it is adding a $9 fee per segment for bookings made through the four global distribution systems — Amadeus, SabreTravelport, and Travelsky — that process nearly all airline tickets worldwide that are not sold directly by airlines through their own websites or online agency portals.

The move represents a bit of changed course for the Ukrainian carrier. Last year it signed up to use Amadeus’s software to help sell their ancillary services, such as meals and bags, via travel agencies. Now it will be taxing tickets if they’re sold via agents who use Amadeus’s reservation systems to book tickets.

Lufthansa Group’s fee is $17 (16 euro) per ticket booked via those companies.

Despite the “tax,” a substantial majority of tickets are still being booked via the middlemen, the airline group says. It paid about a half billion dollars in costs to the middlemen in 2016, according to estimates by investment banks.

It is notable that an airline as small as Ukraine would take the risk of losing some business to pursue this commercial strategy. The conventional wisdom in the industry was that only an airline group the size of Lufthansa would feel the risks of losing some business in the most popular distribution channels would outweigh the benefits of avoiding the fees that GDSs bake into the cost of their contracts.

International Airlines Group, parent company of British Airways and Iberia, may make a similar move to Lufthansa Group’s and Ukraine’s by year-end, according to interviews on a background basis that Skift did with industry executives and investment analysts.

Tipping point?

In a 100-page report on Amadeus published April 7, Credit Suisse analysts, led by Neil Glynn say: “We firmly expect peer airlines, such as Air France-KLM and IAG, will follow Lufthansa in attempting to disintermediate Amadeus and its fellow Global Distribution Systems (GDSs).”

The analysts expect the changes in strategy – signaling their intent to drive business away from Amadeus and its GDS peers – will be revealed later this year.

On March 16, Lufthansa Group chief executive Carsten Spohr echoed the sentiment: “We also believe it’s only a question of time when others will follow…..what we hear in the industry. And with the business success of Lufthansa, I’d be very surprised if others will not follow”.

Amadeus is the largest of the GDSs, especially in the European market, and may be the most affected by the moves by Lufthansa and Ukraine International.

The Credit Suisse analysts estimate Lufthansa, Air France-KLM, and IAG (parent company of British Airways and Iberia) cumulatively represent 15 percent of Amadeus’s largest distribution customers.

Overstated risks?

Yet despite that buying power, Credit Suisse estimates that a 5 percent volume shift in airline ticket sales out of the GDSs would mean only about $53 million (50 million euro) drop in contribution to Amadeus’s distribution business.

The analysts add: “We expect Air France-KLM and IAG will… look to shift at least 10 percent of volume from the GDSs in order to justify their efforts (less would not be worth the effort given potentially unwinding full content agreement discounts could drive GDS costs per booking up 25 percent.”

So how significant is the threat to Amadeus — and its GDS peers?

On the one hand, that division represents two-thirds of Amadeus’ revenue and half of the company’s annual contribution to earnings.

Yet in the context of Amadeus’s $21.29 billion market capitalization, that is small hit that the company could theoretically manage by growing its new businesses, which include software services for airlines and hotels. (A similar contextual point could be drawn about Amadeus’s peer companies.)

What’s more, Credit Suisse has taken the most negative approach to forecasting the possible impact of airline disintermediation on Amadeus and its peers. Other analysts have been more sanguine.

In short, it may take airlines so long to shift share out of the GDS channel, and they may only be modestly successful in doing so, in which case the companies that run the GDSs may have shifted into new businesses by that time and become less dependent on them.

Lufthansa’s fee is still being contested in a lawsuit in a Texas court filed by one of the middlemen, Sabre. The fee has also been challenged by a lobbying arm of national travel agents’ and tour operators’ associations within the European Union, who filed an appeal in 2015 to the EU Commission’s watchdog body to intervene. Both cases are still unresolved.

But apparently Ukraine International feels confident that the wind will be at its back in its move.

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China’s Luxury Travelers Are Young and Spending More Than Ever

Kirsty Wigglesworth  / AP Photo

Shoppers carry designer label branded bags at Bicester Village designer outlet centre, in Bicester, England. Kirsty Wigglesworth / AP Photo

Skift Take: Chinese consumers are responsible for one-third of the world’s personal luxury spending, but the consumers are younger and more affluent than the sector is accustomed to serving. Speaking directly to this group will pay off with loyalty and service for decades to come.

— Samantha Shankman

The Skift New Luxury Newsletter is our weekly newsletter focused on the business of selling luxury travel, the people and companies creating and selling experiences, emerging trends, and the changing consumer habits around the sector.

In addition to providing this weekly digest with stories that are relevant to the sector, Skift is expanding its coverage of the sector with stories like you find below.

Chinese millennial travelers are the future of luxury spending: They’re well-traveled, affluent, and eager to spend on on luxury goods and experiences that show off their wealth.

This is great news for the travel and luxury retail sector, but let’s break down where the opportunities actually lie.

Globally, the share of luxury goods spending that comes from purchases made while traveling internationally is increasing and currently accounts for 40 percent of the global spend on luxury goods, according to the Deloitte report Global Powers of Luxury Goods 2016.

The rise of the Chinese traveler is nothing new and outbound travel from China continues to grow with most recent statistics indicating a 17-percent increase in 2015. Growth in spending on foreign travel by Chinese of all age groups and income status grew in 2016 to levels never seen before, hitting $261 billion for the first time. Half of Chinese travelers are millennials, age 15 to 29, who are less price-sensitive and more willing to spend money on indulgences than previous generations.

More than half, or 66 percent, of these Chinese millennials are high-income earners, but societal norms have as much an impact on their spending as their salaries, according to new Forrester Research.

Millennials living in major urban areas in China, more than any other emerging or developed nation, agreed with the statement, “I like to show off my taste and style,” regardless of their income.

More than half of Chinese millennials are likely to buy luxury goods while traveling, but their luxury spending extends beyond handbags and jewelry to travel and dining experiences, according to the research.

This is a shift mirroring much of what we’ve seen across the travel industry in which younger consumers spend more on experiences than products. Validating that change is data showing that the Chinese retail sector posted just 10-percent growth in 2015, almost half the 17-percent increase in outbound travel.

Smart travel and luxury brands have the opportunity to transform millennials, who are just developing their consumer habits, into loyal customers for decades to come although the question of exactly how to engender loyalty continues to fluster companies.

In addition to ever-growing luxury spend from traveling Chinese millennials, the Forrester report also suggests that eCommerce will be an important strategy in capturing luxury spend with cross-border eCommerce sales set to triple over the next five years.

Online purchases will capture market share from personal shopper services as consumers seek product authenticity and return guarantees. This shift is yet another opportunity for retailers to form more direct relationships among Chinese shoppers.

Forty-four percent of the online population in China were between the ages of 18 and 34 in 2015 — compared to just 27 percent in the U.S. – suggesting retailers that can foster loyalty among consumers will benefits for decades to come.

Sign up for Skift’s New Luxury Newsletter

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Lufthansa Thinks Starting an Indian Airline Is a Bad Idea

My16SidedOffice  / Flickr

As carriers in the Middle East and Asia jockey for a competitive advantage in India’s air market, Lufthansa is sitting out. A Lufthansa aircraft taxis in Vancouver. My16SidedOffice / Flickr

Skift Take: Although Qatar Airways plans on entering India with a domestic carrier, and many other carriers have acquired stakes in domestic Indian carriers, Lufthansa thinks fuel prices are too costly to make a similar move.

— Andrew Sheivachman

Deutsche Lufthansa AG said starting a domestic airline in India, the world’s fastest growing aviation market, will be a “misadventure” because of high jet fuel taxes and the cost of operations.

Lufthansa’s comments come weeks after Qatar Airways Ltd. said it plans to start an airline in India with as many as 100 planes, as the Gulf carrier looks for a bigger share of a market projected to sell half a billion domestic tickets in a decade. Singapore Airlines Ltd., Etihad Airways PJSC and AirAsia Bhd. have also bought stakes in local carriers buoyed by an emerging middle-class flying for the first time.

“You only go make business when you have business plans which give you hope that you can be very successful,” said Wolfgang Will, a senior director for South Asia at Lufthansa, “And I did not hear up to now of any domestic airline in India making a lot of profit.”

Lufthansa has a history of running an Indian airline. It was part of a partnership that ran ModiLuft, which was grounded in 1996 after disputes over payments with the German carrier, creditors, oil companies and the Airports Authority of India. The airline’s permit was later used by two entrepreneurs to start SpiceJet Ltd., now India’s second-largest budget carrier.

Lured by an expanding market, more airlines are coming up in India. At least 43 businesses have applied to Indian regulators in the past two years to start some form of passenger air transport service in what’s projected to be the world’s third-biggest aviation market by 2020 and the largest by 2030. The increase in local traffic — estimated to reach half a billion in a decade — has outpaced all other markets for 23 straight months.

Fuel Costs

Still, the nation is home to some of the world’s costliest jet fuel, mainly due to provincial taxes of as much as 30 percent and cut-throat competition that forces airlines to sell tickets below cost. Aviation turbine fuel in India costs 70 percent more than it does abroad, and has led to the shuttering of as many as 17 airlines in the past two decades, according to a research paper by KPMG and The Associated Chambers of Commerce of India.

Indian carriers lost money every single year for a decade before posting a combined profit of $122 million in the year ended March 2016, helped by a crash in oil prices, according to Sydney-based CAPA Centre for Aviation. The industry is set to report losses of as much as $750 million in the two years ending March 2018, according to CAPA estimates.

©2017 Bloomberg L.P.

This article was written by P R Sanjai and Anurag Kotoky from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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United Airlines’ First Quarter Earnings Beat Forecasts

United Airlines

A United Airlines plane on the tarmac. The airline’s first quarter earnings beat estimates. United Airlines

Skift Take: While it’s too soon to see any fall out from its passenger-dragging incident, tomorrow’s earnings call will likely reveal more.

— Jason Clampet

United Continental Holdings Inc. (UAL) on Monday reported first-quarter profit of $96 million.

The Chicago-based company said it had profit of 31 cents per share. Earnings, adjusted for non-recurring costs, came to 41 cents per share.

The results topped Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 37 cents per share.

The airline posted revenue of $8.42 billion in the period, also surpassing Street forecasts. Four analysts surveyed by Zacks expected $8.36 billion.

United shares have declined roughly 3 percent since the beginning of the year. In the final minutes of trading on Monday, shares hit $70.77, a rise of 25 percent in the last 12 months.

This story was generated by Automated Insights using data from Zacks Investment Research.

Copyright (2017) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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Hawaii Lawmakers Try to Settle Differences Over Vacation Rental Regulations

Cathy Bussewitz  / Associated Press

Hawaii Gov. David Ige is concerned that a rise in short-term rentals and vacation rentals is having a negative impact on Hawaii’s housing shortage. Cathy Bussewitz / Associated Press

Skift Take: In destinations like Hawaii where tourism is a top industry, managing the balance between the needs and wants of visitors and the needs of residents is a constant struggle that’s being reflected in the state’s current battles over vacation rental regulation.

— Deanna Ting

The chairmen of Hawaii’s House and Senate tourism committees expect to meet in the upcoming week to resolve differences over vacation rental tax bills that have passed their respective chambers.

Both bills would enable websites like Airbnb to collect state taxes on behalf of people renting rooms and homes.

Short-term rental operators are already required to pay general excise taxes and transient accommodations taxes under current law. But supporters say the legislation could help the state collect $100 million in taxes that are not currently being paid.

The issue is contentious in part because so many vacation rentals operate in violation of county law. This is particularly prevalent on Oahu, where the county has not authorized any new short-term rentals since the late 1980s.

Sen. Glenn Wakai said senators want to set up a taxing mechanism and to push the counties to set up a permitting system for short-term rentals if they have not done so already.

Senators want to make sure the vacation rental and bed-and-breakfast establishments do not negatively affect the communities where they’re located, said Wakai, a Democrat who represents Kalihi and Pearl Harbor.

Rep. Richard Onishi, a Democrat who represents Hilo and Volcano in the state House, said the Senate version includes provisions to enforce county rules. He said this should be left up to the counties, as they each have their own laws and permitting requirements.

He noted the legislation had to satisfy many different stakeholders, including the state tax department, the public, the neighborhoods where vacation rentals are operated, online rental platforms like Airbnb, hotels, hotel worker unions and others.

He stressed that lawmakers do not want the legislation to send a message that the state is legitimizing illegal rentals.

“By all means, we’re not trying to say because we collect appropriate taxes, that these units are permitted or they are legal,” Onishi said.

The Legislature passed similar legislation last year only to have it vetoed by Gov. David Ige, who said he was concerned it would facilitate illegal short-term rentals.

He said encouraging people to rent to visitors instead of residents could exacerbate Hawaii’s severe housing shortage and homelessness crisis.

Onishi said he has been working with the governor’s staff on the issues since the beginning of the legislative session to address his concerns and avoid a similar outcome this year. But Wakai said he has been disappointed at the lack of engagement by the governor’s office with him on the issue.

Ige, when asked about Wakai’s concerns, said he knows his chief of staff, Mike McCartney, has met with Senate and House members on the issue.

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IHG Reveals Second Credit Card Data Breach Occurred in 2016

Mark Lennihan  / Associated Press

InterContinental Hotels Group, parent of brands including Holiday Inn Express and Candlewood Suites, said some of its franchised properties in the U.S. and Puerto Rico suffered a recent credit card data breach. Mark Lennihan / Associated Press

Skift Take: This is yet another reminder for the hotel industry about the crucial importance of cyber security.

— Deanna Ting

Last week, InterContinental Hotels Group (IHG) announced it had suffered a data breach at multiple IHG-branded franchise hotel locations in the U.S. and Puerto Rico during the period of September 29, 2016 to December 29, 2016.

IHG did not disclose the exact number of properties impacted. To learn which properties were impacted, guests need to search for hotels that may have been impacted on IHG’s website.

It’s the second such data breach the company has revealed this year. The earlier breach, announced in February, impacted 12 hotels in the U.S. The company operates and manages hotel brands that include Holiday Inn, Holiday Inn Express, Candlewood Suites, Hotel Indigo, and InterContinental Hotels.

IHG said a cybersecurity investigation revealed that malware accessed payment card data from cards used on site at some of its franchisee-operated properties in the Americas, thereby generating unauthorized charges on those cards after being used at IHG front desks.

The company added that while there’s no evidence that unauthorized access to payment card data took place after December 29, confirmation that the malware was removed didn’t take place until the properties were investigated in February and March of this year.

IHG also noted that before this breach, many of IHG’s franchise-operated hotels had installed IHG’s Secure Payment Solution, a point-to-point encryption payment acceptance solution, and that those properties that had this technology prior to September 29 or shortly thereafter were not impacted by this most recent breach. Properties that had implemented SPS before September 29, 2016 were not affected.

IHG said that it also doesn’t believe any other guest information, other than cardholder names and numbers, was taken by the hack.

IHG isn’t the only hotel company to suffer from recent breaches of customer credit card data. Other hotel brands that have dealt with this recently include Trump Hotels, Hard Rock Hotels, Omni Hotels & Resorts, and Hilton Hotels.

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Santo Domingo’s Cleanup Effort for Tourism Is Worrying Its Long-Term Residents

Programa Fomento a Turismo

A tourism initiative in Santo Domingo, Dominican Republic is helping re-paint residences and refurbish storefronts. Programa Fomento a Turismo

Skift Take: Tourism development versus the locals — it’s an issue that cities and countries worldwide have to grapple with. There’s no magic formula for striking the right balance.

— Rachel Bronstein

Latin America’s oldest colonial city is aiming for a rebound, pouring tens of millions of dollars into repairing streets, cleaning up trash, installing streetlights and renovating centuries-old buildings in hopes of getting more of the Dominican Republic’s 5 million tourists a year to spend less time at the beach and more in the capital’s long-neglected historic center.

Business owners are delighted, but residents of Santo Domingo’s walled city are watching nervously, fearful that they will be priced out by a surge of stylish new restaurants and boutiques.

“Bringing more tourists here can be traumatic for us,” said Pedro del Castillo, the 67-year-old president of the neighborhood’s residents’ association. “It seems like the aim is for us, the residents, to leave.”

The city’s most ambitious restoration project in decades is funded by a $120 million loan from the Inter-American Development Bank, most of which still must be approved by the Dominican Republic’s congress.

The first $30 million in development money has gone to paint 800 homes, restore 200 colonial-era facades, replace water mains and street lighting and install new sidewalks. More private business is already moving in, with some 325 new cafes, restaurants, galleries and luxury condominiums opening in the colonial center over the past five years, according to official figures.

The center is “a diamond that needs polishing,” said Silvanh Riedel, manager and part-owner of the Billini boutique hotel.

Angelo Louis, a 19-year-old barber, rents a 90-square-foot (8.4-square-meter) space without a bathroom in centuries-old El Conde street for $350 a month, and has to leave because the privately owned building will be restored with public money in coming months. He said he fears that the owner of the remodeled buildings will raise the rent and make it impossible for him to move back.

“It’s going to hit us hard,” he said.

The program’s advocates say such fears are misplaced, and the government is dedicated to creating not just economic development, but better lives for residents of the colonial center.

“The idea is to rescue the city in a different way” than in past attempts, said Maribel Villalona, the head of the program for Programa Fomento a Turismo.

The colonization of the Americas began in Santo Domingo, which was founded in 1496 by Christopher Columbus’ brother Bartolome and features the continent’s first cathedral, first hospital and first university. The center was abandoned by many after the country’s 1965 civil war, with more prosperous residents moving to new developments on the outskirts of the capital.

To celebrate the 500th anniversary of Columbus’ arrival in the Americas, some of the center’s limestone buildings with scenic wooden balconies were restored in 1992, but the program did little to improve the economic fortunes of the area or draw more of the Dominican Republic’s tourists. According to government statistics, only 15 percent of visitors to the Dominican Republic spent time in Santo Domingo and only 3 percent slept there, drawn away by all-included packages at beach resorts and dissuaded by the lack of high-quality lodging inside Santo Domingo’s walled city.

Villalona said the second phase would be aimed at helping poor families in the historic center, restoring some 200 homes and providing their residents with job-training and small-business loans to help them benefit from the expected surge in tourism.

Those promises aren’t soothing the anxieties of residents like Fidel Perez, a 48-year-old photographer who plans to get married in coming months and says the $300 or $400 he can pay for rent would only get him and his wife a single room in the old city, forcing him to look for housing far from the center for the first time in his career.

He blames the rising rents on the renovation of the colonial city, and says he’s pessimistic that any improvement in the area will benefit its working people.

“For now,” he said. “We’re watching the game from the sidelines.”

Copyright (2017) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

This article was written by Ezequiel Lopez Blanco from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Santo Domingo is Getting a Facelift That’s Concerning to Residents

Programa Fomento a Turismo

A tourism initiative in Santo Domingo, Dominican Republic is helping re-paint residences and refurbish storefronts. Programa Fomento a Turismo

Skift Take: Tourism development versus the locals — it’s an issue that cities and countries worldwide have to grapple with. There’s no magic formula for striking the right balance.

— Rachel Bronstein

Latin America’s oldest colonial city is aiming for a rebound, pouring tens of millions of dollars into repairing streets, cleaning up trash, installing streetlights and renovating centuries-old buildings in hopes of getting more of the Dominican Republic’s 5 million tourists a year to spend less time at the beach and more in the capital’s long-neglected historic center.

Business owners are delighted, but residents of Santo Domingo’s walled city are watching nervously, fearful that they will be priced out by a surge of stylish new restaurants and boutiques.

“Bringing more tourists here can be traumatic for us,” said Pedro del Castillo, the 67-year-old president of the neighborhood’s residents’ association. “It seems like the aim is for us, the residents, to leave.”

The city’s most ambitious restoration project in decades is funded by a $120 million loan from the Inter-American Development Bank, most of which still must be approved by the Dominican Republic’s congress.

The first $30 million in development money has gone to paint 800 homes, restore 200 colonial-era facades, replace water mains and street lighting and install new sidewalks. More private business is already moving in, with some 325 new cafes, restaurants, galleries and luxury condominiums opening in the colonial center over the past five years, according to official figures.

The center is “a diamond that needs polishing,” said Silvanh Riedel, manager and part-owner of the Billini boutique hotel.

Angelo Louis, a 19-year-old barber, rents a 90-square-foot (8.4-square-meter) space without a bathroom in centuries-old El Conde street for $350 a month, and has to leave because the privately owned building will be restored with public money in coming months. He said he fears that the owner of the remodeled buildings will raise the rent and make it impossible for him to move back.

“It’s going to hit us hard,” he said.

The program’s advocates say such fears are misplaced, and the government is dedicated to creating not just economic development, but better lives for residents of the colonial center.

“The idea is to rescue the city in a different way” than in past attempts, said Maribel Villalona, the head of the program for Programa Fomento a Turismo.

The colonization of the Americas began in Santo Domingo, which was founded in 1496 by Christopher Columbus’ brother Bartolome and features the continent’s first cathedral, first hospital and first university. The center was abandoned by many after the country’s 1965 civil war, with more prosperous residents moving to new developments on the outskirts of the capital.

To celebrate the 500th anniversary of Columbus’ arrival in the Americas, some of the center’s limestone buildings with scenic wooden balconies were restored in 1992, but the program did little to improve the economic fortunes of the area or draw more of the Dominican Republic’s tourists. According to government statistics, only 15 percent of visitors to the Dominican Republic spent time in Santo Domingo and only 3 percent slept there, drawn away by all-included packages at beach resorts and dissuaded by the lack of high-quality lodging inside Santo Domingo’s walled city.

Villalona said the second phase would be aimed at helping poor families in the historic center, restoring some 200 homes and providing their residents with job-training and small-business loans to help them benefit from the expected surge in tourism.

Those promises aren’t soothing the anxieties of residents like Fidel Perez, a 48-year-old photographer who plans to get married in coming months and says the $300 or $400 he can pay for rent would only get him and his wife a single room in the old city, forcing him to look for housing far from the center for the first time in his career.

He blames the rising rents on the renovation of the colonial city, and says he’s pessimistic that any improvement in the area will benefit its working people.

“For now,” he said. “We’re watching the game from the sidelines.”

_____

Copyright (2017) Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

This article was written by Ezequiel Lopez Blanco from The Associated Press and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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Discovery Licenses Its Name for Costa Rica Eco-Tourism Park Means Big Business

Arturo Sotillo  / Flickr

Discovery hopes a new eco-tourism park in Costa Rica will help boost revenues. Pictured are tourists Playa Conchal, Guanacaste Costa Rica. Arturo Sotillo / Flickr

Skift Take: Discovery is eyeing millennial travelers with its new park plans but it should consider that many younger travelers do enjoy exclusively sitting on a beach rather than learning about biodiversity.

— Dan Peltier

Discovery Communications Inc. is licensing its name for a $1 billion eco-tourism park in Costa Rica as the media company seeks new revenue from fans of its cable networks, which include Discovery Channel and Animal Planet.

Discovery Costa Rica, scheduled to open in late 2020, will be near Liberia, according to a statement from the company. The town is a regional hub in the northwest part of the country that tourists pass through on their way to the country’s Pacific coast beaches.

Activities will include rock climbing, hiking, scuba diving and other pursuits across four locations at the country’s beaches, parks and volcanoes, with a focus on biodiversity and conservation. Discovery Costa Rica will have a water park, along with Discovery-branded hotels and restaurants, said Richard Wirthlin, chairman of investor relations at Sun Latin America, the developer leading the project.

While media giants like Walt Disney Co. and Comcast Corp.’s NBCUniversal build and run theme parks tied to movies and shows, Discovery is taking a more low-key approach. Sun Latin America is assuming the risks associating with developing and owning the project. The companies declined to disclose the financial terms of their deal.

The media company, based in Silver Spring, Maryland, wants viewers to “live out the lifestyle of Discovery beyond the experience of a TV screen,” said Leigh Anne Brodsky, executive vice president of Discovery Global Enterprises, the company’s licensing unit.

Millennials are interested in more than lying in a beach chair,” Brodsky said. “They want to have an experience.”

Licensing gives Discovery an opportunity to increase ancillary income at a time when its main revenue sources — TV advertising and cable subscriber fees — aren’t growing as fast as they once were.

The company has also licensed its name to an adventure park in Moganshan, China, that opened last year, and has a partnership with Princess Cruises for snorkeling and other activities tied to TV shows like “Deadliest Catch” and “Shark Week.”

Such arrangements contributed less than five percent of Discovery’s 2016 revenue of $6.5 billion, and the company is exploring more licensing deals, a spokeswoman said.

Animal Planet, one of several Discovery cable networks, aired “Wild Costa Rica,” a show celebrating biodiversity, in August.

 

 

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

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Trying to Get Past United’s Dragging Fiasco — Skift Business Traveler

United Airlines

United’s economy seating. The airline is one week out from one of its biggest public failures in years. United Airlines

Skift Take: Sure, United screwed up royally. The real question is, what comes next?

— Grant Martin

What to Know Now

Everyone’s got a hot take on last week’s incident on United Airlines in which a passenger was forcibly removed from an airplane (Skift alone filed as many as 10 related pieces) but any way you look at it, it’s embarrassing.

It doesn’t get easier in light of another incident that got lots of national press over the weekend, although the nature of this one was different than the dragging issue.

It’s embarrassing that U.S. airlines and law enforcement let things get out of hand. It’s embarrassing that that passengers are so quick to hate airlines and not help their fellow travelers. And yes, it’s embarrassing that we’ve spent more time talking about it than actually working to create change.

In many ways, there is no clean solution to last week’s fiasco. But we can all start making a difference by turning the page and treating each other just a little bit better on our next trip.

Social Quote of the Day

Every take on @united incident has already been done, mine isn’t any original: United PR couldn’t have handled it any worst post-incident.

– @rafat | Rafat Ali, CEO and Founder of Skift

Airlines

The New Alaska Airlines Could Be a Lot of Like the Old Virgin America: Alaska Airlines began in 1932 when Mac McGee, a former miner, truck driver, and dishwasher from the Midwest, decided to start a carrier in Anchorage. Since then, the airline has become a favorite for travelers in the Pacific Northwest, nurturing a following without such frills as mood lights or lounge music. That’s about to change. Read more at Skift

U.S. Airlines Getting Better Performance Marks But Are Passengers More Satisfied? Airlines still have a perception problem. It’s not hard to find passengers who complain about a miserable flight, a missed connection, or shabby treatment by airline employees. Comments like that abound on Twitter. Read more at Skift

British Airways and the Problem of Fees, Frills and Perspective: While British Airways might not be suffering as much bad publicity as some other airlines, a recent comment from its Chief Executive Alex Cruz has been jumped on as another sign that the carrier is going further downmarket. Read more at Skift

Delta Execs Downplay Importance of Basic Economy: Delta Air Lines executives downplayed the importance of basic economy fares on the airline’s quarterly earnings call Wednesday and said the jury is still out on how competitors’ bargain fares will affect its business. Read more at Skift

Airports

Airlines and Airports Look to Biometrics to Improve the Passenger Experience: Recently, passengers on some KLM flights departing Amsterdam haven’t shown a boarding pass to get on a plane. They haven’t needed to show their IDs, nor have they interacted with an agent at the boarding door. Instead, KLM has been using facial recognition software for a multi-month trial that began in February. Read more at Skift

White House Plan Could Include Airport Privatization: A program being considered by the White House could see airports in the United States go under private control, with an improvement plan that could exceed $1 trillion. Read more at FlyerTalk

Airports Installing Quiet Rooms for Autistic Children: Quiet rooms for children on the autism spectrum are popping up at airports. Read more at Skift

Tech

Good Airline News Today? You Still Won’t Be Able to Make Calls on Flights: U.S. Federal Communications Commission Chairman Ajit Pai wants to scrap a move to allow mobile-phone calls on flights, suspending a proposal that drew scornful comments from thousands of passengers aghast at sharing space with chattering seatmates. Read more at Skift

Virgin America’s Ex-CEO Talks Candidly About Google’s Pushy Strategy: It’s no secret that Google has been moving to profit more from travelers researching and booking flights. But it is rare to hear a top airline executive speak openly about the airline industry’s fraught relationship with the search giant. So ears perked up late last week when David Cush, former chief executive of Virgin America, talked candidly about this issue. Read more at Skift

Marriott CEO: New Digital Technologies, Not Walls, Are Key to the Future of Travel: Marriott International CEO Arne Sorenson has never been afraid to speak up on issues of importance that relate to the travel industry, including recently imploring then-President Elect Donald Trump to “disprove [his] critics” by investing in travel and transportation infrastructure and crafting “sensible” immigration legislation. Read more at Skift

Hotels

Hyatt to Offer In-Room Streaming Entertainment Worldwide: Soon enough, you can start streaming Netflix, Hulu, YouTube, and more when you check into a Hyatt property around the world. Read more at Skift

North Korea Thinks Its Newly Reopened Luxury Hotel Will Help Attract Tourists: North Korea’s most famous luxury hotel has reopened after renovations that modernized its 1980s, vaguely Soviet, style. Read more at Skift

Everything AccorHotels Has Acquired and Invested in Over the Past Year: If it feels to you as though AccorHotels has made a new deal every few weeks or days for the past year, you wouldn’t be far off the mark. Read more at Skift

Trump Hotels’ New Scion Brand Won’t Arrive in Dallas Anytime Soon: Plans have been shelved for a proposed Dallas hotel carrying the Trump Organization’s Scion brand, according to a city council member who met with the developer of the proposed $50-million project on Tuesday. Read more at Skift

Your Turn

Libby Zay, a Gadling alum, has a new collection of travel essays out called Miles Away. Check it out over on her site.

Tips and Comments

Can be sent to gm[at]skift[dot]com or to @grantkmartin

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Ryan Wolkov

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Author: Ryan Wolkov

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