New Business Hotel in London To Test Whether Lifestyle Category Can Scale

The Ned

Millie’s will be one of nine restaurants at the Ned, a new hotel in London. The Ned

Skift Take: The Ned Hotel in London wants to be known as an urban resort and not a traditional business hotel. The founders hope to define the business hotel — we mean, the urban resort — of the future.

— Dennis Schaal

Don’t even think about calling the Ned a business hotel.

Yes, behind its grand 1920s Midland Bank facade it’s the size of a convention center property, with 320,000 total square-feet of space. And yes, it’s located smack in the middle of the City, London’s finance and business core.

But a business hotel is the very last thing the Ned’s founders set out to create. Based on repeated warnings from their handlers, they seem to consider those two words nothing short of anathema.

The Ned is the first collaboration between Andrew Zobler and Nick Jones, red-hot hoteliers with a gift for attracting the crème de la crème of the creative class. Jones founded Soho House, while Zobler is chief executive of Sydell Group, which develops and operates acclaimed properties like the Nomad in New York, the Freehand (in Miami and Chicago), and the Line (in Los Angeles and Washington D.C.).

An urban resort is more appropriate term, they say. And yet, when it opens on April 27, the Ned will be the best business hotel in town, make no bones about it.

Blockbuster Proportions

If Jones’ Soho House hotels have been like indie movies, he characterized in an interview, then this is his big blockbuster.

The project is massive terms of both size and investment: 252 rooms in 13 categories; seven public restaurants; a private members’ club; three bars; a rooftop pool; six meeting and event spaces; a barbershop; a women’s hair studio; separate salons for facials and skin rejuvenation bar, make-up, and nail; a fitness club; and a spa.

While the team declined to comment on their total budget, the recent restoration of the glitzy Corinthia, another sprawling London hotel, cost a cool $490 million. And despite the prowess of both hoteliers, neither was willing to tackle the project alone.

“Nick had never done anything of this scale, but he understands London as well as anybody and has a great aesthetic and style,” said Zobler of their partnership. “We understood the hotel business and development very well. Together we made a great team.”

Jones concurred, “We’ve been responsible for the design, and they’ve been responsible for the implementation—it’s been a super successful collaboration.”

Bigger is Better, for Business and Leisure

“Lifestyle hotels used to be synonymous with this idea of ‘boutique,’” said Zobler. “Small meant better. More intimate.” He sees that changing. “Growing in scale means you can offer a larger range of amenities,” he explained.

Those separate men’s and women’s salons perfectly prove the point: they’ll come in handy whether guests are going to black-tie weddings or buttoned-up board meetings. Ditto the meeting rooms with private terraces or the 24-hour British brasserie called Millie’s (as convenient for locals’ post-party munchies as it will be for suits with late-night flight arrivals).

“Nobody wants to stay in the same boring business hotels with the same restaurant menus and the same ugly awnings,” said Jack Ezon of Ovation Travel, whose company books at least 30,000 corporate room nights in London annually. “You want a cool place with a great vibe that gets you in a good mood, especially if you’re entertaining. And if you can combine that with big, nice rooms it’s even better,” he added.

The Ned, he says, ticks those boxes. Entertaining will be easy with eight restaurants that include a sister to Cecconi’s in Mayfair; a Jewish deli; a Parisian-inspired café; and several spaces that will be for guest use only, like a bar in the bank building’s old vault space, a rooftop grill, and a ritzy American steakhouse.

“For business travelers, the Ned is a game-changer,” said Ezon, estimating that the project will likely see 60-80 percent of their occupancy ticking the business box on their immigration forms.

Public-Private Offerings

“You have to be a member to walk into a Soho House building, but a good night at the Ned will see every sort of person in there—that’s what will make it interesting and exciting, I think,” said Jones, whose previous projects have always been characterized by a sense of exclusivity. “The Ned is for everyone.”

And yet, that’s not entirely true. While a bulk of the restaurants and public spaces will in fact be open to the public, a private membership club will still give the Ned an elite bent.

Included in the membership cost (which starts at 1500 GBP, or $1880) is access to a series of private spaces like the aforementioned restaurants, a marble-clad gym, and a spa with a hammam, sauna, and swimming pool. Perhaps the hardest tables to book on property will be those at the Princes Dome and Poultry Dome Bars, two visually spectacular watering holes built into round rooftop atriums.

Though a long-held focus of Soho House clubs, getting admitted here won’t require you to be a creative professional. The hotel’s position in the City will force it to open its network beyond the traditional editorial-, art-, and fashion-types.

“What we’re really hoping for is a blend of people,” said Zobler, who said that “getting the alchemy right” would require a diverse mix of business travelers, start-up entrepreneurs, transient locals, leisure types, and beyond. “We’re trying to cultivate that through the diversity of the offerings,” he explained.

Financial Districts on the Upswing

Until now, there have been few exciting places to stay in the City except for an Andaz, an Indigo, and a few unbranded, unremarkable crash pads. But that’s changing, and not just because of the Ned.

Ezon says the recently-opened Four Seasons Ten Trinity—also in a historic building with a private members’ club—is another City game-changer, despite having a more traditional feel. “They’ll cater to a similar comp set but a different psychographic,” explained Ezon. “One for the more trendy and one for the more traditional.”

Zobler hopes bringing the cool-kid cred to the City will help change the neighborhood even further. “The center of gravity in London has really moved east. You used to want to stay in the West End, and went to the City just to do business. Now that so much has moved east to Shoreditch and beyond, the City has actually become a great hub,” he said. To his point: nightlife, shops, and tech companies have moved in, and restaurants are expanding their hours past 8 p.m. for the first time.

London isn’t alone in this regard. One of the hottest new hotels in New York, the Beekman, is also in an historic building in the once-bland Financial District. And in Los Angeles, Zobler’s developing a Nomad downtown rather than in glamorous Santa Monica or Beverly Hills.

“Financial districts tend to have these old incredible buildings, and people have a yearning to be in places that have a sense of history,” he said.

Plus, good real estate deals bring in a creative, regenerative energy. “In the coming years, you’ll see the City’s office spaces—they’re reasonably priced and well connected [to public transportation]–being filled up by interesting tech and advertising firms,” predicted Jones.

The Bottom Line

“Business hotels need to learn to cater to a younger demographic,” said Ezon. “They need to capture local energy, and have some life to them.” That’s exactly what the Ned is designed to do.

So call it an urban resort if you must, but we’ll raise our glass to Zobler and Jones for creating the business hotel of the future: one that’s not strictly-for-business at all.

The Ned opens April 27. Rooms start at $250 GPB ($313).

©2017 Bloomberg L.P.

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

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Corporate Travel Still Doesn’t Get Homesharing Despite Business Traveler Use

List  / Flickr

A new survey shows corporate travel policies still do not widely allow the use of homesharing by business travelers. In this photo, an Airbnb property in Rotterdam is shown. List / Flickr

Skift Take: Business travelers and their employers want safety, quality, and consistency; if homesharing companies can provide those things, we expect more acceptance from travel policies.

— Hannah Sampson

Homesharing services such as Airbnb might be solidly in the mainstream for vacationers, but in the cautious, wary world of corporate travel, the option is still an outlier.

A new survey from the Global Business Travel Association’s education and research arm shows that just 17 percent of travel policies allow business travelers to stay at homesharing properties. The survey, which included responses from 147 North American travel managers, did not define the term or single out specific companies.

An earlier survey showed 37 percent of business travelers thought homesharing was allowed and another 22 percent didn’t know either way, which suggests some workers are staying in such properties against company policy. Projections say that by the middle of this year, one of every five business travelers will have stayed in a homeshare property for business at some point.

“For some road warriors, home shares likely feel more comfortable and less sterile than a nondescript hotel room,” the GBTA report said. “However, for as attractive an alternative as homesharing is for many business travelers, it presents a number of considerations travel managers must take into account.”

The biggest concern that respondents had about homesharing was safety and security of properties, followed by the unpredictability of conditions, nonrefundable deposits, the possibility of last-minute cancellations by homeowners, strict enforcement of cancellation policies, and a lack of consistency across properties.

In a move to win more business travel customers, some homesharing sites are making efforts to address those concerns. Slightly more than 60 percent of those who responded to the survey said they were aware of programs aimed at business travelers, while 38 percent were not.

“As the marketplace continues to evolve, travel managers should periodically revisit their evaluation of the services to see if their previously held concerns have been addressed or if new ones crop up,” GBTA research director Kate Vasiloff said in an email. “Home sharing is probably not going to be a great fit for every company, every time, but travel managers should at least be making informed decisions about whether or not it is allowed in their travel policy and understand the importance of clearly communicating their decision to their travelers.”

Of those employers that did not allow travelers to use homesharing properties, 52 percent considered the option before ruling it out and another 13 percent were in the process of reviewing the possibility.

Services such as Uber and Lyft are far more widely accepted than homesharing; according to a GBTA survey released earlier this year, half of corporate travel policies allow ridesharing.

But the report points out that adoption was not immediate as employers had to consider whether drivers were credentialed or covered by appropriate insurance.

“Unlike ride-sharing companies, which witnessed an immediate rejection and subsequent slower adoption, the decision to include or exclude home-sharing options in travel policies appears to be more measured as evidenced by both the number of people involved in making the policy decision and the thoughtfulness with which inclusions or exclusions were made,” the report said.

The new study was conducted between Jan. 31 and Feb. 10 in partnership with hotel operator AccorHotels, which has a vested interest in the topic. It has made big moves in the alternative accommodations space by acquiring upscale Airbnb rival onefinestay last year and making investments in Squarebreak and Oasis. It announced earlier this year that negotiations were underway to buy private vacation rental broker Travel Keys.

“It would be absolutely foolish and irresponsible to fight against any new concept, offer, or services like this, let alone fighting against the sharing economy,” AccorHotels CEO Sébastien Bazin told Skift last year. “This is where the world is leading us. All of those new services are very powerful and very well implemented and executed. You need to embrace it.”

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What Trump’s First 100 Days Tell Us About Travel’s Next Four Years

Pablo Martinez Monsivais  / Associated Press

President Donald Trump, accompanied by Environmental Protection Agency (EPA) Administrator Scott Pruitt, third from left, and Vice President Mike Pence, right, signs an Energy Independence Executive Order, Tuesday, March 28, 2017, at EPA headquarters in Washington. Pablo Martinez Monsivais / Associated Press

Skift Take: Confusion and uncertainty have become the new reality for the U.S. travel industry, and travelers around the world, following President Trump’s first 100 days in office. Only time will tell whether his policies will inflict lasting damage on U.S. travel companies and the image of the U.S. as a preeminent international destination.

— Andrew Sheivachman

When Donald Trump was elected U.S. President in November, there was quite a bit of optimism in the travel industry that having a luxury hotelier in the Oval Office would help advance the goals of both the U.S. as an international destination and U.S. travel companies.

Trump’s first few months in office, however, seem to have dispelled the notion that his administration would be tourism and tourist friendly. Following one failed travel ban executive order, with another still tied up in the appeals process, the tenor has changed completely.

Travelers, particularly those who are Muslim or hail from predominately-Muslim countries, have reported strenuous customs screenings at U.S. airports that skirt legality. A ban on large cabin electronics on select routes from the Middle East and Africa to the U.S. has also caused confusion for international business travelers.

There have been a few positive developments. The nomination of Elaine Chao as Secretary of Transportation is one; she served as labor secretary during the George W. Bush administration, and is known to be an especially effective bureaucrat. A supposed $1 trillion infrastructure investment plan is also purportedly still in the works.

Given the developments during President Trump’s first 100 days, what should the U.S. travel industry expect for the remaining four years of his term? We asked Skift’s industry specialists about the reality, and potential ramifications, of President Trump’s travel policy.

HOSPITALITY

If hotel CEOs initially thought that having a fellow hotelier in the White House would be good for business, they may want to recalibrate their expectations following Trump’s first 100 days in office.

At the outset, a few expressed hope and optimism that a business-friendly chief executive would bring lower corporate tax rates and stimulate business travel  — often considered the bread and butter for most U.S. hotel chains.

Hilton CEO Christopher Nassetta told Skift in mid-January, “As we come into this year, my reason for optimism is not, and I think I said this, not trying to be a Pollyanna, I do think that sentiment, particularly in the U.S., in corporate America is more positive. That can certainly move from here up or down, depending on things that happen. But from my point of view, I think it’s hard to debate that, post-election, the psychology has changed in a more positive way.”

Nassetta wasn’t alone in his positive outlook either, as signs of a slight “Trump Bump” in corporate travel business immediately following the election gave hotel executives some hope of a brighter 2017. But others, like Marriott CEO Arne Sorenson and Best Western CEO David Kong, weren’t as positive in their viewpoint. Both CEOs said they didn’t interpret the post-election increase in business travel as a foreshadowing of corporate travel business in 2017.

And then came the travel ban on January 27. While other travel companies such as Expedia and Airbnb were quick to publicly denounce the ban, hotel companies, for the most part, remained silent with the exception of Choice Hotels, which issued a statement, and the American Hotel & Lodging Association (AH&LA).

Marriott CEO Sorenson expressed concern about the kind of message Trump’s travel ban was sending to the rest of the world. He also noted that, anecdotally, some groups are choosing to bring their meetings and events to destinations outside of the U.S. for fear that not all their attendees will be able to convene in the U.S.

For the most part, however, hotel executives said that Trump’s travel ban did not have a significant financial impact on their businesses.

As for Trump Hotels itself, the company has had its fair share of scrutiny, especially following the first travel ban. And given its unprecedented circumstances — having its namesake and founder in the White House — Trump Hotels is now shifting its strategy purely to domestic growth over international to avoid potential conflicts of interest, of which many still remain.

Skift interviewed Trump Hotels CEO Eric Danziger in January to talk about the future of the Trump Hotels business. During the interview, Danziger stressed that Trump the President “has another job now” and that the hotel business is its own separate entity.

A March statement from the General Services Administration, the federal agency that is the leaseholder for Trump’s new Washington, D.C. hotel stated that Trump is not in violation of his lease as a “government official” but there are still plenty of organizations and business who believe his D.C. hotel represents a major ethical conflict, and gives Trump Hotels an unfair advantage over other hospitality businesses in the area.

Looking ahead, the first quarter earnings from the major U.S. hotel chains should shed some light on whether Trump’s pro-business policies are actually helping business travel and although the travel ban may not have had an immediate financial impact, it remains to be seen whether its ramifications will have lingering effects. Hoteliers will also need to pay close attention to Trump’s policies on immigration and H-2B visas for temporary and seasonal workers.

— Deanna Ting, Hospitality Editor

AIRLINES

U.S. airline CEOs had high hopes for the Trump Administration, and while they may eventually get some of what they had wanted, not much aviation policy has changed yet.

One problem is that the CEOs don’t agree on that many issues. There is general consensus the U.S. should reform its air travel control system, turning it from a government-run enterprise into a non-profit private corporation. That’s how the system works in many other countries, including Canada, and it likely eventually will happen here. Trump supports it, and the White House put privatization in its proposed budget. Among large U.S. airlines, only Delta Air Lines is opposed, with the carrier saying the system works fine as it is.

Other stuff is more contentious. The CEOs from Delta, as well as American Airlines and United Airlines, want the public to think all U.S. airlines oppose the largest Middle East airlines — Etihad Airways, Qatar Airways, and Emirates Airline — because the carriers may accept some subsides from their governments, which may violate Open Skies agreements the United States has with Qatar and the United Arab Emirates.

The big three U.S. airlines are upset that these Open Skies permit Etihad, Emirates and Qatar to operate nonstop routes between Europe and the United States, including Emirates’ new Athens-Newark service. They would like the Trump Administration to stop those Europe-U.S. routes, which compete directly with some of their flights, and perhaps even cap the number of nonstop departures the airlines can offer from the Middle East to the United States.

But many other airlines do not agree. JetBlue Airways and Alaska Airlines have robust and profitable codeshare agreements with Emirates. Emirates relies on JetBlue to shuttle passengers to Boston and New York, where they connect to flights to Dubai. Alaska does the same for Emirates in Seattle. Both low-cost airlines do not want the Trump Administration to renegotiate Open Skies agreements with Qatar and the United Arab Emirates. JetBlue and Alaska have an important ally in Federal Express, which operates a regional hub in Dubai and takes advantage of the same agreements that American, United and Delta dislike. Fedex needs that hub — and the global air traffic rights that go with it — to efficiently ship packages around the world.

United, American, and Delta did receive an indirect bump from the Trump Administration in late March when the U.S. Department of Homeland Security banned travelers flying to the United States from 10 airports in the Middle East and North Africa, including Dubai, Abu Dhabi and Doha, from bringing laptops, iPads and e-readers in aircraft cabins. The U.S. government said it was reacting to a security threat, but it shared few details. The same week, the United Kingdom issued a similar restrictions on UK-bound flights from some countries in same region, but its ban did not include airports in Dubai, Abu Dhabi and Doha.

The electronics ban is almost certainly a commercial problem for the three big Gulf carriers. Their lucrative business travelers in business and first class don’t want to stop working for 10 to 16 hours on long-haul flights, and many do not feel comfortable putting laptops in checked luggage. All three airlines are giving loaner electronics to premium passengers, but that’s not a perfect solution, as many business travelers do not want to put company information on a machine their employers do not own. No one is yet sure how much business the Gulf three are losing to other airlines, but Air India recently said its U.S.-bound business had improved considerably, according to reports. It makes sense, since a business traveler flying Air India from Mumbai to Delhi to San Francisco can use electronics and work during the flight, while a customer flying Emirates from Mumbai to Dubai to San Francisco cannot.

— Brian Sumers, Aviation Business Editor

TOURISM

While it’s still early to measure the long-term effect of President Trump’s short presidency and often controversial rhetoric on U.S. and international tourism, so far the White House’s messaging has told international travelers that the U.S. isn’t as welcoming as it was when Trump’s predecessor, Barack Obama, held the Oval Office.

During the 2016 campaign, then-candidate Donald Trump promised voters he’d build a wall along the U.S.-Mexico border and ban all Muslims from entering the U.S. Sure enough, just one week after he was inaugurated on January 20, Trump signed an executive order barring non-U.S. citizens from seven predominantly Muslim-majority countries from entering the U.S.

Almost immediately after, CEOs from across the travel industry weighed in on the travel ban criticizing the Trump Administration’s actions and called for security policies that embraced the freedom of travel rather than restrained it. Travel CEOs feared the travel ban would concern travelers from other countries not part of the ban simply for the mixed messages it sends.

At the same time, many destination marketing organizations across the U.S. began hitting roadblocks as an uncertain future under a Trump Administration called their funding levels into question. Tourism boards have always had to fight to maintain their funding or receive more but a sweep of Republicans taking control in many statehouses and city halls across the country during the November 2016 elections made this year’s budget battles more contentious, as is the case with Visit Florida.

John Percy, president and CEO of Niagara USA, the destination marketing organization for Niagara Falls, New York, said that he’s in a “wait and see mode” regarding his marketing budget for the coming year in light of national politics.

Coming off an eight-year Obama Administration in which Obama prioritized personal travel while on official state visits, President Trump has also made clear he won’t skimp on traveling and has spent most of his weekends since taking office at his Mar-a-Lago resort in Palm Beach, Florida. Trump’s Florida visits could help attract more tourists to visit Florida but other destinations aren’t anticipating any Trump bump.

Tourism boards in New York City and Los Angeles, for example, have already said they anticipate fewer international visitors in 2017 than last year because of the travel ban and U.S. politics. Brand USA, the national tourism marketing arm of the U.S. government, said its recent survey found U.S. politics is increasingly a reason why international travelers are calling off or forgoing travel plans to American destinations.

Many Mexican travelers have already demonstrated that they’re choosing Canada this year over the U.S. and the United Nations World Tourism Organization said the U.S. has already lost $185 million in tourist spending from the travel ban and could lose more than a $1 billion by the end of 2017 depending on how other international travelers — those not from the banned countries — perceive the U.S. political climate.

Still, it’s too soon to understand the deeper economic impact of President Trump on the U.S. travel industry as the first 100 days is a fraction of a four-year term. International tourist spending in the U.S. in January, however, set a new record in January and U.S. travelers show no signs of halting their international travel plans this year.

Some U.S. tourism boards such as New York City have launched marketing campaigns to combat the Trump Administration’s unwelcoming message. But the person that international travelers want to hear from to reassure them of their safety and hospitality is first and foremost President Trump.

If the first 100 days are any indication, the next four years of the Trump White House will likely be one of setbacks for tourism legislation implemented under President Obama and more confusion for international travelers weighing mixed messages and a strong dollar as reasons to reconsider a U.S. visit.

— Dan Peltier, Tourism Reporter

BOOKING SITES

Online travel agency officials from Expedia to TripAdvisor and executives from gig-economy companies such as Airbnb and Lyft were among the most vociferous corporate opponents of President Trump’s travel bans and building a wall along the U.S.-Mexican border.

Regardless of the political sympathies of their leadership, these travel companies see it in their economic interests to oppose presidential policies that would limit travel to the United States either by policy or the apparently unintended consequence of turning off international travelers because of the discordant rhetoric or the hassle of getting through U.S. Customs.

In addition to the adverse impact on travel demand, the travel bans made it really difficult for some of these companies’ employees to return after an international trip because they may been born in or were citizens of one of the banned Middle Eastern countries. So opponents viewed both the travel demand and operational side of the equation in opposing some of Trump’s policies during the President’s first 100 days.

On the immigrant and travel fronts, Expedia even trolled President Trump’s inauguration and paid for an advertisement that aired on CNN that encouraged people to “peek over your neighbor’s fence to see the other side.” Expedia has spent some $1.35 million airing the “Train” ad on national TV since the beginning of February, according to iSpot.tv.

The Expedia video encourages people to #traveltheworldbetter to break down barriers and explore foreign cultures.

TripAdvisor and its CEO Stephen Kaufer have been out-front in their efforts to aid refugees displaced by global conflicts, such as the war in Syria. TripAdvisor pledged to donate $2 million over two years to the International Rescue Committee and Mercy Corps.

And Kaufer wrote how the travel bans aren’t just a business issue but they speak to the United States’ identity as a country.

The travel industry has become more emboldened as the Trump administration’s travel policies come more clearly into view. You can expect more intense opposition if the new policies take the same direction.

— Dennis Schaal, Executive Editor

BUSINESS TRAVEL

Business travel insiders seemed hopeful at first that Trump’s talk of infrastructure improvement and reduced regulations — as well as the stock market’s rise in the months following the election — would be positive for the industry.

But just a week after the inauguration came an executive order banning travel from seven Muslim majority countries, widespread chaos, and an element of uncertainty that threatened earlier optimism.

“It really comes down to uncertainty,” Greeley Koch, executive director of the Association of Corporate Travel Executives, said in late January. “Business travelers and their companies do not like uncertainty.”

The Global Business Travel Association turned to industry sources for data on business travel bookings, which included hotel, air, and ground transportation, and calculated that $185 million in bookings were lost in the week after the ban was announced.

News was full of stories of travelers pulled off flights and detained at airports, which forced companies to consider how their own employers might be treated. It was a disturbing prospect, polls found.

Surveys following the first (and, eventually, second) ban showed that travel managers expected to cut back on business travel to the U.S. An ACTE survey indicated 45 percent of respondents said the ban would pose travel difficulties for their company. In a GBTA poll, 45 percent of Europeans who responded said they were less willing to plan meetings and events in the U.S., and 38 percent were less willing to send business travelers to the country. ()

“There is always the risk that closing our borders sends the message that the United States is closed for business,” Michael McCormick, executive director and chief operating officer at GBTA, said in a statement in early March. “The results of this poll show the perception of the United States as a welcoming destination for business travel has been altered.”

To a lesser extent, the restrictions on large personal electronics in the cabin on flights from several countries in the Middle East and Africa presented another complication for business travel. Executives said frequent travelers are typically understanding about security crackdowns, but questioned the reasoning and transparency around the new measure — especially since many companies have policies requiring travelers to keep gear like laptops with them at all times.

While business travel had been foundering over much of the last year, the concern now is that any recovery is being threatened by actions the administration has already taken. It’s early still, but with uncertainty lingering, those fears could be justified.

— Hannah Sampson, News Editor 

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Can a TripAdvisor TV Campaign Be a Game-Changer? Two Views

TripAdvisor

TripAdvisor largely pulled out of the TV ad game. TripAdvisor

Skift Take: It’s all but certain that TripAdvisor is going to get back on TV in some form in 2017. It really needs to unless the company wants to push the launch into next year pending product changes and improvements. Past TV campaigns haven’t moved the needle. The decision-making this time is all-important.

— Dennis Schaal

Can TripAdvisor turn things around?

The company, the largest travel site in the world with some 390 million average monthly unique visitors, is in the midst of a painful transition from a hotel-search site to one that combines searching and booking. TripAdvisor introduced Instant Booking, where consumers complete their bookings on TripAdvisor, to supplement links to other sites in the United States in August 2015 and has gradually rolled it out globally.

As of the fourth quarter of 2016, TripAdvisor’s booking and search revenue improved sequentially to negative 7 percent growth, an improvement from negative 12 percent in the third quarter. So the click and transaction-based revenue trended upwards but was still in the red, and the company stock, which opened Friday at $41.16, isn’t far from its 52-week low.

TripAdvisor has announced that it is considering returning to TV advertising this year after having been absent in 2016. The company admitted that it had been overly optimistic that its product changes would lead to a consequent change in consumer behavior. In other words, consumers come to TripAdvisor sites to read hotel and restaurant reviews; now the trick is to get them to realize they can book hotels there, too. [See one of TripAdvisor’s 2015 ads, “Beach 30 U.S.,” below.]

Can TV Be part of the solution?

But can a new TV blitz, as part of a multifaceted marketing campaign, tip the scales, change ingrained consumer habits, and convince travelers that TripAdvisor might be the opportune place to book their hotels — and a better option than Expedia, Booking.com, Marriott or Hilton? One daunting factor to consider is that TripAdvisor grew its total selling and marketing spend 9 percent to $756 million in 2016 while Expedia Inc. ratcheted up its marketing spend 29 percent to $4.36 billion, and the Priceline Group’s jumped 23 percent to $4.35 billion.

So TripAdvisor’s marketing spend is a fraction of some of its biggest competitors’ efforts.

Skift consulted two advertising/marketing experts and solicited their views on whether TripAdvisor could really force a change in consumer perceptions with a TV campaign as part of a new, overall advertising and marketing strategy. They had different views on TripAdvisor’s prospects.

Gerry Graf, founder and creative director at creative agency Barton F. Graf, says TripAdvisor has tremendous assets and is capable of “making that judo move to show why I should book there and for these reasons.”

Meanwhile, Robert Birge, the former CMO of Kayak and Lola and the original head of marketing for Orbitz, is pessimistic about TripAdvisor. “Without Search Engine Optimization, they need to acquire brand building competence but based on their disastrous brand positioning and five failed attempts at television advertising, it doesn’t look promising.”

Gerry Graf, found Barton F. Graf Creative Agency

In January, YouTube ranked Barton F. Graf’s 2015 Clash of Clans: Revenge ad, featuring actor Liam Neeson, as the second-most-viewed Super Bowl ad since 2007. Gerry Graf worked on a Kayak TV campaign in 2011 at a time when the metasearch site was being massively outspent by online travel agency rivals and was struggling to differentiate itself from them. [See Graf’s “Kayak Think” ad below and a hilarious and enlightening video case study about one of the campaigns here.]

One of the things that TripAdvisor is undoubtedly debating about a potential re-entry into the TV markets is how to pace its spending. Does the company go in with a big show of force and saturate the airwaves in a way that Trivago has been doing in the last couple of years in the U.S. and elsewhere, or should TripAdvisor opt for a more prolonged approach over several years?

“If you come up with a breakthrough communication, you don’t need to spend as much,” Graf argues.

Graf says Kayak’s prospects turned on defining it as a search engine and not just another travel site. The ads revolved around the time-savings consumers would accrue by letting Kayak search hundreds of other travel sites at once.

In the run-up to Kayak’s IPO in July 2012, before it was acquired by the Priceline Group, Kayak disclosed that TV advertising boosted its unaided awareness from 9 percent to 39 percent in the U.S. in two-and-a- half years [Expedia’s was around 55 percent]; in the first two years Kayak’s direct queries climbed 207 percent.

So TV helped put Kayak on the map for consumers.

While getting increased awareness will be part of the battle for TripAdvisor, it will have to give consumers a good reason to view the site as the best place to book a hotel, Graf says.

“They have great equity,” Graf says. “I would assume people love TripAdvisor. They just don’t know why they should book there. But they have a lot to work with.”

“You don’t need to outspend,” he adds. “You need to embrace creativity. The power of a breakthrough idea to get noticed and once you get noticed you need to provide a clear strategic reason why to use it. You don’t need to outspend people. You need to outthink people.”

Graf says one of the things he looks for in a new client — and his creative agency has worked for brands ranging from Kayak to GoDaddy, and from Esquire to Ragu — is whether the brand has a strong connection with customers. Strong emotions can work regardless of whether they are positive or negative, he says.

TripAdvisor probably has a strong connection with its users, Graf says. “They need to repurpose the message. They have a lot more to work with than other clients I’ve had in the past.”

Robert Birge, former CMO of Kayak and Lola

Asked about TripAdvisor’s product and marketing prospects, Birge emailed the following:

“TripAdvisor has significant demand challenges and faces a complex brand challenge, and it doesn’t appear that they have a great handle on either.

“Each of the major upper funnel shopping channels in travel have powerful brands: Google, TripAdvisor, Kayak and Trivago, which is a clear prerequisite for being able to sit in front of so many high value, considered purchases.

“TripAdvisor built their brand through probably the best SEO machine in the world and an innovative B2B program that essentially turned hotels around the world into free marketing for the brand. This all came under the idea that TripAdvisor provided ‘the world’s most trusted travel advice.’

“Even if TripAdvisor wasn’t known for elegant branding, this position was incredibly powerful in the hearts and minds of travelers. TripAdvisor long held the strongest position among travelers with this attribute. Effective positioning requires building an idea in people’s heads that differentiates your brand in a dimension that matters and framing your brand in a way that no other brand can really compete. This is often referred to as creating a category of one. Apple famously started this in the late ’90s with the ‘Think Different’ campaign that aimed to position Apple as ‘tools for creative minds,’ which was something they could own given that they’d lost the PC battle.

“TripAdvisor needs to shift its brand to align with the company’s shifting competitive strategy, but they’ve landed on a very poor brand strategy: know better, book better, go better. There are a myriad of Web-based tools for researching, booking and managing your travel. TripAdvisor is now claiming that they do it better. A superiority positioning is generally problematic for a variety of reasons. First, is it credible? In this case, it’s obviously not. Second, it puts their brand on the same dimension as every other online travel brand as opposed to framing their brand in a way they can win. In other words, it doesn’t differentiate them — it says we do the things you can do on the Internet for travel, only we do it better. There are very few cases that this type of generic positioning has ever worked.

“Part of their problem in shifting their brand strategy also seems to be that their overall competitive strategy as a company is unclear. Are they trying to be a hybrid OTA with price comparison information or is booking more a matter of giving travelers another choice in their price comparison information? They also seemed to have been operating under the illusion that they could just rationally hammer people with the idea that ‘you can now book on TripAdvisor’ and people would start doing it.

“Many left-brained engineering or economics-schooled CEOs make this classic mistake in assuming that their users behave rationally and pay attention to what they’re saying. Shifting from the world’s most trusted travel advice effectively is going to require something far more thoughtful than just shouting BOOK at people.

“In terms of their overall demand strategy, they seem to be relying on ancillary traffic from all of their non-hotel content and performance marketing. Call me a skeptic but the history of tours and activities seems like a wasteland, and they’ll always be disadvantaged to the two big OTA companies in performance channels. Without SEO, they’ll need to acquire brand building competence but based on their disastrous brand positioning and five failed attempts at television advertising, it doesn’t look promising.”

Here’s Barton F. Graf’s “Kayak Think” ad of 2011:

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International Tourist Spending in the U.S. Is at Record High So Far This Year

Ben Clark  / Flickr

Foreign visitor spending in the U.S. is off to a strong start in 2017. Pictured are tourists at Grand Canyon National Park. Ben Clark / Flickr

Skift Take: Trump slump or Trump bump? It will take more than five weeks of spending behavior to provide clearer direction.

— Dan Peltier

International travelers spent $21 billion in the United States in February, a nearly three percent increase over February 2016, that made the first two months of 2017 the strongest for foreign tourism spending on record.

International tourist spending in the U.S. totaled $42.1 billion for January and February, a three percent increase ($1.1 billion) over the same period last year, according to monthly statistics released this week by the U.S. National Travel and Tourism Office. Spending in January and February is also a record high for both months.

In January and February, international visitors, on average, were spending nearly $715 million a day in the U.S. that supported 1.2 million American jobs.

Strong spending for the first two months of 2017 follows a year of virtually no growth in spending by international travelers visiting the U.S. and slower growth in international arrivals.

Every month, the National Travel and Tourism Office releases data regarding recent travel and spending activity, including details about inbound travel to the United States. This is the most recent month for which this information is available.

In February, foreign visitors spent some $13.1 billion on goods and services that include food, accommodations, activities, local transportation and souvenirs; $3.3 billion on airfare (a 0.4 percent increase over February 2016) and $4.7 billion on medical, education and short-term worker related travel. Medical tourism and related spending by international travelers in the U.S. was up more than 10 percent year-over-year for February as travelers increasingly travel to the U.S. specifically for medical care and treatments.

February was the first full month of the Trump Administration which began on January 20 and also the first full month following President Trump’s executive order that originally banned citizens from seven Muslim-majority countries from entering the U.S. that many travel brands fear could have a chilling effect on international travelers visiting the U.S.

Albeit, many trips in January and February were likely booked months in advance before President Trump was inaugurated or elected.

Winter months in the U.S. including January and February are traditionally some of the slowest for international arrivals — depending on the destination — which typically pick up during the summer months of June, July, and August. Because of the strength of the dollar this year, it is difficult to correlate visitor numbers that generate the spending.

Data released by the United Nations World Tourism Organization this week show that increased spending by Chinese travelers in the U.S. last year is a major factor in why international tourist spending in the U.S. remains strong and that’s likely carrying over to this year.

The National Travel & Tourism Office measures international visitor spending in U.S. dollars and spending totals for some markets could be higher depending on currency conversions. Travelers could also be shifting spending to other expenses, such as retail, that isn’t included in the data.

And, as Skift reported last month, not all destinations are seeing a boost in international visitor spending and the coming months will be more revealing in how the U.S. political climate is either positively or negatively impacting international arrivals.

INTERNATIONAL VISITOR SPENDING IN THE U.S. FOR February 2017 ($ MILLIONS)

International Traveler Receipts in U.S. February 2017 February 2016 Percent Change 2017/2016
Passenger Airfare Receipts (5) $3,300 $3,286 0.40%
Travel Receipts (for all purposes including education) (2) $17,800 $17,103 4.07%
-Travel Spending (3) $13,100 $12,845 1.90%
-Medical/Education/Workers Spending (4) $4,700 $4,258 10.30%
Total Travel and Tourism-Related Exports (1) $21,000.00 $20,389 2.90%

Source: U.S. National Travel and Tourism Office

1) Travel and Tourism is the sum of all travel-related exports (or imports) and includes passenger fare receipts and payments.

2) All travel receipts include trips for 1) business travel, including expenditures by border, seasonal, and other short-term workers and 2) personal travel, including health-related and education-related travel.

3) Travel spending includes purchases of goods and services by U.S. persons traveling abroad and by foreign travelers in the United States for business or personal reasons. These goods and services include food, lodging, recreation, gifts, entertainment, local transportation in the country of travel, and other items incidental to a foreign visit.

4) All expenditures for educational and health-related purposes (such as tuition, room and board paid for or provided by educational institutions, hospital charges, treatments, physicians’ fees, etc.) made by students and medical patients. Expenditures by border, seasonal and other short-term workers are also included in this total.

5) Fares received for the transport of nonresidents by U.S. air carriers between the U.S. and foreign countries and between two foreign points (exports), and the transport of U.S. residents by foreign air carriers between the U.S. and foreign countries (imports).

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Alaska Air Overtakes American Airlines in Annual Loyalty Program Awards

Alaska Airlines

Alaska Airlines’ loyalty plan is one of the few that hasn’t switched to a revenue-based earning formula. Alaska Airlines

Skift Take: Mileage Plan from Alaska Airlines just won as the best airline loyalty program in FlyerTalk’s annual survey — largely because of its distance based earnings.

— Grant Martin

The 2017 FlyerTalk awards, which name the best loyalty programs across the travel industry, were published on Friday, and AAdvantage from American Airlines has been dethroned as the reigning favorite among travelers.

In its place, Mileage Plan from Alaska Airlines took the top spot, unseating the incumbent of five years.

USA Today posted the initial FlyerTalk award results on Friday.

The fall of AAdvantage, for many, was not a surprise. In the middle of last year, American moved its loyalty program from distanced-based to revenue based-earning, slashing the volume of award miles earned for most travelers. Earning AAdvantage miles on partner carriers, as well, has been slashed, leaving many international travelers with fewer miles.

“It’s hard to imagine a program that’s done more to become less useful,” said Gary Leff, an influential blogger in a recent post highlighting the changes to American.

Alaska, by contrast, bucked the industry trend last year and kept Mileage Plan distance-based. That decision led to wide accolade from both industry reports (U.S. News named Mileage Plan as the best airline loyalty program in 2016) and the community.

The airline has also doubled down on its loyalty program. Asked about the industry shift to revenue-based programs, Ryan Butz, Alaska’s managing director of loyalty marketing said that a distanced-based program is “the fairest thing to do,” adding “…it is something our competitors have moved away from and it hasn’t been something that people have liked, other than the small percentage of customers flying on really expensive fares.”

Needless to say, that strategy may change as investors continue to examine the benefit of revenue-based loyalty programs throughout the year. American Airlines held out a year on changing AAdvantage as the American-US Airways merger came to a close, and when the program transitioned in August, investors rejoiced. Now, as Alaska settles its integration with Virgin America (which runs a revenue-based loyalty program), Mileage Plan may soon be in the crosshairs.

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What Hotels Are Doing to Win Your Loyalty: 5 Podcast Takeaways

Skift Take: With so many hotel mergers in recent years, loyalty is being reimagined for bigger, broader, more diverse audiences. But can any one loyalty program appeal to all travelers?

— Sarah Enelow

On a recent episode of the Skift podcast, we discussed hotel loyalty: who’s doing it right, who’s still trying, and how it’s continuing to evolve. Marriott is merging its program with Starwood’s SPG. Hyatt’s new program just launched. And Hilton recently announced a slate of new features.

And all of these changes are taking place as online travel agencies continue to lure many travelers driven by price rather than points, and up-and-coming accommodations providers like Airbnb win fans without even offering a loyalty program.

Our guest was Gary Leff, founder of the View from the Wing blog and an expert on points programs. He joined podcast host Hannah Sampson and Skift hospitality editor Deanna Ting.

We also heard from some interviews that Ting did at the Americas Lodging Investment Summit in L.A. with Scott Berman, U.S. hospitality and leisure practice leader at PwC; Best Western Hotels & Resorts president and CEO David Kong; and Langham Hospitality Group CEO Robert Warman.

Here are five takeaways from the conversation:

Major acquisitions are changing hotel loyalty in a big way.

Recent consolidations of hospitality brands — the biggest example being Marriott-Starwood — leads to loyalty programs being pushed together, and that can get messy. Consumers loyal to each individual brand don’t want their points to be disrupted or reduced in value, and they don’t want any interruptions in their customer service.

“IHG swallowing Kimpton and we’re going to see changes to their program. Fairmont and Accor. Obviously the big behemoth being Marriott and Starwood,” said Leff. “Initially I think there was a tremendous amount of skepticism among Starwood’s members as to what that’s going to look like. And there’s still certainly a wait-and-see situation, although Marriott’s gone to great lengths to try to reassure those members.”

“Hotels are really starting to figure out that loyalty programs aren’t just a mechanism of communicating to consumers,” said Leff. “They’re a way of allowing them to expand their footprint across brands because consumers are going to respond to the incredible stickiness that allows them to have more brands.”

Retail rewards don’t work for all travelers.

Travel companies are getting more creative with their loyalty benefits. Instead of only redeeming points for a hotel room or an airline seat, consumers can now often redeem for tangible retail products like a Starbucks gift card.

“That’s the story in and of itself is how the retail sector and the lodging sector are parallel,” said Berman. “When we look at how our clients are positioning themselves and setting up their digital strategy, they’re not looking at their peers, they’re looking at retail. And so that creates a different sort of loyalty.”

On the other hand, Leff questions whether retail and lodging really make good bedfellows.

“On the retail, I think we shouldn’t overemphasize that. There are some opportunities for synergies, but we started to see a decade ago, mostly on the airline side, the airlines had a problem,” said Leff. “You’ve got all these points and a limited supply of seats and people are having frustrations — what are other things that they could do with their points? And retail never really ever took off on that side, at least in terms of percentage of redemption. Why? Because getting a toaster or washing machine for your points isn’t nearly as aspirational as the trip to Hawaii. So it just doesn’t drive long-term behavior in the same way.”

Younger generations view loyalty differently than older generations.

Older consumers may be accustomed to decades-long brand loyalty, but younger travelers of Gen Y or Z are often more elusive and willing to break their purchasing patterns. Sometimes younger people prove more adept at gaming the loyalty system to rack up more points. On top of that, millennials by and large want to exchange those points for experiential rewards, like a free trip to Hawaii, rather than retail rewards.

“Millennials are less trusting of institutions,” said Leff. “In the loyalty context, the programs are telling folks if you take action of a specific kind now, give us your business now and there’s going to be rewards in the future; it’s an inter-temporal play. What happens when you don’t trust that?”

“No loyalty program should ever use the word ‘enhancement’ again. Because millennials in particular don’t trust it,” Leff added.

“For young people who travel, it’s all about accumulating points. And they become loyal,” said Berman.

Luxury hotels lean more on recognition than rebates.

Immediate rewards may not serve as big a role in the luxury space as customer recognition and delivering that unique, personalized, high-end experience. This crowd is definitely not in it for the free toaster.

“Most of our customers and guests aren’t necessarily looking for a rebate. They’re looking for us to recognize them, to understand their unique desires, and make sure that we treat them special but treat them in the manner that they want,” said Warman. “We’re not embarking on a massive global program to reduce rates because you’re a member or give you X number of points or a rebate back. We don’t necessarily see that, in the luxury market today, as a necessity.”

“Certain upscale [brands], they’re very well attuned to getting the recognition component right,” said Leff.

No matter how comprehensive the loyalty program, no single company can be all things to all travelers.

Every hotel company has a profile, no matter how many properties or brands they have across the globe. Experiences will inevitably vary from company to company, as will the type of guest they attract, from family leisure travelers to single road warriors.

“Arne Sorenson of Marriott says that he wants Marriott to become the only program you’ll ever need. Now, I’m not sure. I think that’s a little bit of an overstatement,” said Leff. “You can go just about anywhere and stick with them, so Marriott grew their international presence, their higher-end presence. Starwood is getting a footprint in smaller cities. And so geographically, that’s more true. But I think that it really comes to the individual consumer and tastes. And one company isn’t going to appeal to literally everyone and every profile.”

Companies in the sharing economy will have an even tougher time administering their loyalty programs consistently to a large audience, since each property is overseen by its individual owner.

“The owner of an AirBnB is going to have to stock the fridge with your favorite juice or soda before they leave because you’re an AirBnB VIP.” said Leff. “How do you drive that consistent experience? How do you fund that experience?”

Start listening to the Skift Podcast, today. Subscribe via iTunesSoundcloud or RSS.

Listen to all the Skift podcasts here.

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Spirit Airlines Is the Latest Carrier to Downgrade Its Cuba Ambitions

Skift

A Havanatur tour guide on the streets of Havana, Cuba. Spirit Airlines is the third carrier to cut its outbound U.S. service to the island. Skift

Skift Take: Many travel brands got excited about Cuba. But its tourism infrastructure still has a long ways to go to match the hopes tourists (and locals) have for it.

— Jason Clampet

Low-cost Spirit Airlines is the latest carrier to cut flights to Cuba.

The Miramar-based airline began serving Havana on Dec. 1 with twice-daily flights from Fort Lauderdale-Hollywood International Airport.

But Spirit President and CEO Bob Fornaro said Friday that “the costs of serving Havana continue to outweigh the demand for service.” The airline will reduce its flight schedule next month and end its Havana service June 1.

Airline spokesman Paul Berry told the Sun-Sentinel that customers who need new accommodations or refunds will be contacted.

Fort Lauderdale-based Silver Airways and budget carrier Frontier Airlines also are suspending service to Cuba in the coming weeks.

JetBlue Airways will fly smaller planes on routes from Fort Lauderdale and other U.S. cities to four Cuban destinations starting May 3.

This article was 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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Airbnb Sues Miami for the City’s Crack-Down on Short-Term Rentals

Skift Take: This is a rare case where Airbnb has the law on its side. While Miami officials likely think they’re fighting for locals’ rights, they’re in the wrong in regards to a state law which is widely favorable to vacation rentals.

— Jason Clampet

The home-sharing platform Airbnb is suing the city of Miami, where officials threatened to crack down on hosts who publicly protested regulations prohibiting short-term rentals.

According to the lawsuit filed Friday in Miami-Dade County by Airbnb and five individual hosts, the city violated the First Amendment rights of hosts who spoke up at a March 23 city commission meeting.

At that meeting, commissioners voted 3-2 to reaffirm zoning regulations prohibiting short-term rentals of single-family homes in Miami’s residential areas. City Manager Daniel Alfonso then said code compliance officials could start targeting Airbnb hosts who placed their names and addresses on the record to attend the meeting and protest those regulations.

“The City is now acting to make good on those threats,” the lawsuit said. “Airbnb stands together with its Miami hosts in opposing the City’s unlawful efforts, and in particular stands with the brave individuals who have come forward and seek to protect their rights as individual plaintiffs in this action.”

Three off the hosts listed as plaintiffs in the lawsuit attended the March 23 meeting. Airbnb officials have said the company has 2,300 active hosts in Miami.

Miami Mayor Tomas Regalado, who opposes Airbnb, told The Miami Herald that Airbnb encouraged its hosts to attend the commission meeting, knowing they would have to provide their names and addresses in order to participate.

“There is no First Amendment issue here and there is no retribution,” Regalado said.

Regalado said the city attorney plans to send cease-and-desist orders to Airbnb hosts who spoke at the commission meeting. They could face fines of $250 per day.

The lawsuit asks the court to declare vacation rentals legal in residential areas of Miami, to stop the city from adopting new ordinances against short-term rentals, to prevent any legal action against the hosts and to deem unlawful the city commission’s policy of requiring personal information in order to speak up at public meetings.

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

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United Takes a Beating and 8 Other Aviation Trends This Week

Royal Jordanian Airlines

The Jordanian national carrier had fun on social media with United’s current woes. Royal Jordanian Airlines

Skift Take: These are the aviation trends we were talking about this week.

— Sarah Enelow

Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines aviation.

For all of our weekend roundups, go here.

>>Travelers are entitled to their own opinions, and it makes sense that Emirates is the overall No. 1. But does Aeroflot truly have the world’s best business class product? Emirates Ranks First in Launch of TripAdvisor’s Review-Based Global Airline Rankings

>>Virgin America’s Elevate members now have an official timeline for when their loyalty program is going to fold: Virgin America’s Elevate Loyalty Program Will Fold on January 1, 2018

>>British Airways has finally come around and started investing in its business class cabin. But it may be too late to catch up with Delta, United, and the Middle East carriers: British Airways Announces a $495 Million Investment in Premium Experience

>>Those traveling on Delta last week may have felt the aftershocks of a storm that moved through Atlanta Hartsfield-Jackson airport and turned operations on their head: Delta’s Operations Disrupted By Mid-Atlantic Thunderstorms — Skift Business Traveler

>>During the decade he ran Virgin America, David Cush couldn’t always speak freely. But now Cush can discuss how airlines struggle with Google’s mobile land grab: Virgin America’s Ex-CEO Talks Candidly About Google’s Pushy Strategy

>>Consumers are more comfortable with biometrics than ever, and we can probably thank Apple for that. Now airlines are starting to ask whether they might use facial recognition, fingerprints or iris scans to make the passenger experience better: Airlines and Airports Look to Biometrics to Improve the Passenger Experience

>>If history is our guide, another airline will do something worse soon. But for now, United is taking a beating on social media, even from its peers: Airlines Add to United’s Social Media Woes Following Its Latest Controversy

>>Alex Cruz, the Chief Executive of British Airways, is in a tough spot. For years the airline has positioned itself as a premium brand and — whatever the company says — customers don’t like it when you start charging for something you used to get for free: British Airways and the Problem of Fees, Frills and Perspective

>>Delta says it is using basic economy fares to help better differentiate its products. The jury is still out on whether it will help them compete on routes where they face low-cost competitors: Delta Execs Downplay Importance of Basic Economy

 

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