U.S. May Tighten Visa Waiver Program, Homeland Security Chief Says

Glenn Fawcett  / U.S. Customs and Border Protection

Officers of the U.S. Customs and Border Protection Office of Field Operations monitor air traffic and trade activities at the National Targeting Center. Homeland Security Secretary John Kelly wants to tighten border security. Glenn Fawcett / U.S. Customs and Border Protection

Skift Take: Terrorism is a real concern, but if the U.S. rolls back the visa waiver program, it could have major repercussions for the tourism industry. And that’s a big potential problem.

— Brian Sumers

The U.S. should review a visa waiver program that gives European visitors easier access into the country as foreign fighters with Islamic State return to Europe and attempt to travel to the U.S., Homeland Security Secretary John Kelly said.

The expected military defeat of Islamic State in Iraq and Syria will decentralize the threat from the terrorist group and put the U.S. at greater risk, as militants with citizenship in Europe return home and plot further attacks, Kelly said in a speech Tuesday in Washington. It’s a concern shared by European allies, Kelly said, as large numbers of fighters are already going back.

“Most of those countries are visa waiver countries,” Kelly said at the event organized by George Washington University. “We have to start looking very hard at that program — not eliminating it and not doing anything excessive — but look very hard at that program and say, ‘What do we need to do?”’

Countries in the visa waiver program include Belgium, Spain, France, the U.K., Italy and Germany as well as non-European nations such as Australia, South Korea, Singapore, Chile and Japan. People from the visa countries aren’t eligible if they also hold dual citizenship from Iraq, Iran, Syria and Sudan.

Laptop Ban

Any changes to the program, which lets most citizens or nationals of select countries travel to the U.S. for tourism or business for up to 90 days without first obtaining a visa, would be the latest effort by the Trump administration to tighten border security. The administration last month issued new rules barring laptops and other electronic devices in carry-on luggage from eight Middle Eastern countries, including Saudi Arabia, Turkey and the United Arab Emirates. Kelly said his department “will likely expand” on such restrictions.

While foreign fighters with Islamic State may initially return to their home countries, Kelly said their “real intent” is to travel to the U.S., which is “the Super Bowl in terms of terrorists.”

“They want to get here, they want to do us harm,” he said. “That’s my concern now that we’re winning in Iraq and soon to win in Syria, that those fighters go back to their homes in Europe and then very possibly make the trip to the United States.”

Syrian Strike

Turning to Syria, the retired Marine Corps general said he was among the Cabinet members who helped President Donald Trump make the decision to launch a cruise missile strike against an airbase in the country this month after accusing President Bashar al-Assad of carrying out a chemical attack against civilians.

“He was very open to anyone at the table talking and giving their idea” in the White House situation room, Kelly said. “There was give-and-take, and he took all of that in. He made exactly the right decision.”

Kelly acknowledged that he’s been told his department, which includes everything from the Coast Guard to the Federal Emergency Management Agency, has the “worst morale” in the federal government, adding that his employees have been used as “political pawns.” But he said he and the administration have “got their back.”

He criticized public officials for often ridiculing and insulting DHS staff.

“If lawmakers do not like the laws that we enforce, that we are charged to enforce, that we are sworn to enforce — then they should have the courage and the skill to change those laws,” Kelly said. “Otherwise they should shut up and support the men and women on the front lines.”

On reports of people being held up at airports for secondary screening or being refused entry into the U.S., Kelly said “believe me, it’s not because of their skin color” or where they’re from, or because of their religion. Instead, he said it’s because an indicator or tip, such as something they said or the content on their mobile phone, prompted officials with U.S. Customs and Border Protection to make that decision.

“I can’t tell you the number of phone calls I get from members of Congress telling me about how we’re refusing someone’s entry at LAX or at JFK because they’re Muslim or because they’re Arab,” Kelly said, referring to international airports in Los Angeles and New York. “It’s absolutely not true.”

©2017 Bloomberg L.P.

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

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Opinion: What We Hate About Airlines Actually Keeps Fares Low

United Airlines

United Airlines, like most carriers, overbooks flights because it is the most efficient way to run an airline business. United Airlines

Skift Take: This column makes excellent points. Airlines overbook flights because the strategy allows them to maximize revenue from each flight. That’s good for investors, yes. But it also, over time, leads to lower ticket prices. In short — passengers benefit from overbooking and other policies that seem to hurt travelers, even they do not know it.

— Brian Sumers

Did you see that passenger getting hauled off the United flight?

No, I spent the last week hiding under a rock for tax reasons.

Do you really need to be sarcastic?

Need, no. Enjoy, yes. Next question.

What do you think about it?

United messed up, obviously.

I know! How dare they kick off paying passengers to make way for their employees? It’s like they think the airline operates for their convenience instead of the customers, isn’t it?

No, not exactly. Actually, they kicked people off the plane so that they wouldn’t have to cancel an entire flight the next day. The employees they boarded were the crew for that plane.

I think you’re just making excuses. I read that airlines sell more seats than they have on flights, just to make more money out of them. That pretty clearly shows they don’t care about their passengers, doesn’t it?

As far as I can tell, United Flight 3411 wasn’t oversold; it was just full, meaning that when the airline needed to board a crew, they had to remove passengers. But to answer your question anyway, I assume that like most companies, United Continental Holdings Inc. cares about its passengers, at least to the extent of keeping them from switching to another airline. They don’t oversell flights because they don’t care; they oversell flights because we want them to.

Excuse me? I most certainly don’t.

I don’t know about you, personally, since I just made you up for the purposes of this column, and I haven’t had time to really dig into your secret dreams and hidden inner motivations. But collectively, we get the airlines we want, which is to say, the airlines we are willing to pay for.

That is our “revealed preference” — what economists call “the things people actually do, rather than what they say.” Customers prefer ultra-cheap air travel. The best way to make the tickets cheaper is to put more people in an airplane.

But that’s because there’s no point in shopping. The major airlines are all terrible.

Okay, but major airlines and startups have experimented with better service — more legroom and wider seats, more amenities. This meant carrying fewer passengers. It turned out people wouldn’t consistently pay those higher prices; despite heavily advertising their better amenities, the airlines in question generally ended up going out of business, or switching to the “cattle class” service we all know and hate.

The market has spoken pretty loudly; it’s just that we don’t like what it’s saying.

Oh, come on, isn’t this just that old right-wing cliché that markets always produce the best outcome? People acting in their own personal self-interest can often make everyone worse off, including themselves.

You’re referring to a collective action problem. That’s a problem where the rational thing to do on an individual level will make us all collectively worse off. You can think of a fishery from which the rational thing for each individual fisher to do is catch as many fish as you can … until the whole fishery collapses, and no one catches any fish.

Collective action problems certainly exist, and that’s one reason we have government. But a collective action problem is not just “something that makes a minority unhappy”; no system makes every single person better off. A true collective action problem is one in which collectively restraining destructive individual instincts can make everyone — or at least, a substantial majority of people — better off.

In the airline market, I see no evidence that there is even a large minority of customers who are willing to bear substantially higher costs for the sake of substantially better service.

That’s why we should never have deregulated the airline market! If it were still regulated, people wouldn’t be able to engage in this destructive race to the bottom. Bet you didn’t think of that, did you, you corporate shill?

Oh, indeed I did. Prior to federal deregulation in 1978, the Civil Aeronautics Board prioritized things that are not really valued by the — like keeping fares cheap to secondary markets, and keeping every existing airline in business. As a result, they tended to award new routes in order to help shore up financially weak firms, and resisted discounting, though eventually they did allow a limited amount.

Since airlines couldn’t compete on price, they instead competed on convenience and service. The result was a large number of planes flying around with many empty seats. By the early 1970s, capacity use dipped under 50 percent.

Obviously, if you were flying, this was a very nice time to be doing it. With all those empty seats, you didn’t have so much trouble getting a last-minute booking, or getting another flight out if you missed your plane. The middle seat was often empty, so you didn’t have to spend your time on board in a protracted cold war over precious armrest inches. And if they generally had empty seats, airlines would obviously not need to bump paying passengers in order to make room for crew.

On the other hand, this was necessarily expensive. So while air travel was better for those who could fly, fewer people could afford to fly as often as folks do now.

Deregulation was, however, an unambiguous Bad Thing for two groups of people: those who wish to fly shorter or less popular routes, and mid-level business travelers.

It was bad for people who fly short distances because it costs less in fuel to keep a plane in the air than to get it there, so short-haul flights are relatively expensive to operate, a difference that had been masked by the federal regulations.

It was bad for mid-level business travelers because their companies had to fly them places, but insisted on doing so at the lowest available price. If the lowest-possible price was for a comfy wide seat in a half-empty plane, companies would pay it. But if cattle class is available, many companies buy that instead.

But I read this article saying deregulation hadn’t even obviously caused ticket prices to decline. Are you sure?

Yeah, I read the same article, last week in New York magazine. It says: “This shift did little to nothing to make airfare more affordable in the long term. The cost of flying was actually declining at a faster rate before deregulation than it has since, according to a 2007 study in the Journal of the Transportation Research Forum.” I have also read that 2007 study.

The paper actually makes multiple arguments. One is that analysts are overestimating the benefits of deregulation for technical reasons we will leave aside the interests of keeping readers engaged. Another is that deregulation dispersed fares, with premium passengers (last-minute travelers and those on certain routes) paying more, and discount economy passengers paying less, so that the average hasn’t really declined any faster than it was doing before.

I think there are some problems with this argument; for one thing, prices tend to decline relatively quickly in young markets, and then level off, so the fact that they continued to fall is actually a point in deregulation’s favor. But I don’t think it’s contested that fare dispersion has been a major effect of deregulation.

However, if fares are more dispersed, that tells us that we now have a broader range available: higher fares, yes, but also lower fares. And those lower fares mean that air travel is now within the financial reach of some folks who were previously frozen out.

To the extent that deregulation has contributed to today’s crowded flights, it is necessarily what has also allowed fares to decline. Most of the cost of a flight is the fixed cost of buying, staffing, and getting a plane into the air; the marginal cost of each additional passenger is relatively trivial. Crowding lets us share the cost of getting the plane in the air over more travelers, making it cheaper for each individual. And in general, this is a good thing: It is both economic and environmental madness to strive toward less utilization of limited airline space.

Of course I don’t want planes to fly around empty! But why can’t we have a better regulatory regime that helps us utilize space efficiently without treating passengers like cattle?

Most of the unpleasantness of modern air travel is due to the fullness of planes. Airline food was never good and never going to be, and standing around at the baggage carousel certainly wasn’t much fun. What people really hate is trying to find a seat in a crowded waiting area, running out of room in the overhead bin, cramming into a tiny seat with no legroom, standing in line for the bathroom, getting bumped from an oversold flight. In other words, what they hate is the fact that there are so many darn people on the plane. (Flights’ capacity use hovers in the mid-80s these days.)

Don’t get me wrong: it’s absolutely possible that we could have had a better regulatory regime than the one that prevailed from the 1930s to the late 1970s. (Electricity regulation, for example, has gotten much more efficient since that time, without anyone saying “Whee! Free-form jazz odyssey in the power market!”) If you imagine a counterfactual in which airline regulation evolved to be more market-friendly and efficient, then you should discount the benefits of the 1978 deregulation accordingly.

But notice what that wouldn’t fix: The problems we hate about air travel. Because more efficient regulation would have been regulation that delivered the same capacity use we see now, or maybe even higher. Airlines don’t cram in seats and oversell flights because they are sadists. They do it because that’s how they maximize the number of passengers in that limited space.

Even the much-maligned overbooking helps us use planes as efficiently as possible, because people do miss flights. If airlines didn’t overbook, their capacity use would be lower, we’d waste fuel flying more empty seats around, and we’d all have to pay a little more for tickets.

Or maybe airlines could just, I dunno, take a little less profit?

The industry is fiercely competitive. United’s profit margin in the most recent year was 6.2 percent, which is not exactly the level you’d expect from unfettered price gouging. And at that, it has to offset the bad years, like 2001 or 2009, when airlines bleed green in life-threatening amounts.

Are you really going to stand up and defend United? That guy was bleeding.

Oh, heck, I’m not defending United. (Though I will note that it was the cops, not United, who made him bleed. It’s a little odd that our ire has been focused on the company.) United made two really dumb mistakes. First, it let passengers board before the bumping began. That was stupid. It’s easy to keep someone off a plane, and hard to remove them once they’re there.

Then the airline compounded its error by trying to remove people by force. Now, United may have the legal right to do so. But that’s irrelevant. It would have been cheaper for staff members to just keep offering more cash until four people agreed to get off. At some price, they’d have found takers. They should have found that price instead of slowing down the boarding process and turning themselves into a viral disaster.

The market created this problem. The market could have solved it.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

©2017 Bloomberg L.P.

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

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New England Leaders Worry Trump and Strong Dollar Will Keep International Tourists Away

woodleywonderworks  / Flickr

New Hampshire tourism officials are concerned about President Trump’s impact on the state’s tourist season this summer. Pictured are tourists at Franconia Notch State Park in New Hampshire. woodleywonderworks / Flickr

Skift Take: Many destinations like New Hampshire are at the start of their main spring and summer travel seasons and aren’t backing down on marketing to international travelers while also proceeding with bated breath.

— Dan Peltier

New Hampshire tourism officials are closely watching political developments in the Trump administration and overseas as they prepare for the summer and fall travel seasons when they see most of their international visitors.

“I have a concern that we’re going to see a dip from our key markets, which would be the United Kingdom and Germany, but that has as much to do with their politics as it does with ours, with Brexit and the whole currency situation over there,” said Marti Mayne, who markets attractions for the Mount Washington Valley Chamber of Commerce in northern New Hampshire.

She and others in the tourism business attended the New Hampshire Travel Council‘s annual Governor’s Conference on Tourism on Tuesday in Concord.

“It’s a little early to know what’s going to happen, but we’re concerned,” Mayne said.

Keynote speaker Mike Fullerton, a spokesman for Brand USA, the nation’s public-private partnership dedicated to promoting international travel to the U.S., said politics impacts travel. He said international travelers surveyed recently said that politics will have an impact on whether they’re going to visit the U.S.

Fullerton said, for example, there’s been “a lot of tough talk” about Mexico that has an impact there. He said new efforts would be made to reach potential tourists in Mexico. He said ad campaigns are tailored to each country, but that U.S. attractions, including New Hampshire ones, such as its beaches, still exist “no matter who’s in office.”

Republican President Donald Trump suspended new visas for people from six Muslim-majority countries and halted the U.S. refugee program, citing safety concerns. Federal judges have blocked those actions. He also vowed during the presidential campaign to erect a wall along the U.S. border with Mexico.

New England has seen an uptick in international visitors in recent years. International growth is outpacing domestic growth in the region, said Victoria Cimino, director of new Hampshire’s Division of Travel and Tourism Development. She said New England received an estimated 2.1 million international visitors in 2015 who spent about $2.1 billion.

She said the United Kingdom and Canada continue to be strong markets in New Hampshire, as are Germany, France, Italy, Ireland and Japan. She said Australia and New Zealand are emerging markets. The allure of the New England region is the draw.

“We always keep an eye on the United States and the perception of the United States as a welcoming travel destination,” Cimino said. “We have zero intention of pulling back on our international marketing effort. We will maintain the work that we do to continue to promote New Hampshire as a hospitable, welcoming place to visit.”

This article was written by Kathy McCormack 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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United President: It’s Too Early to Know if Any Customers Are Boycotting Airline

Chris Sweda  / Chicago Tribune via AP

Asian community organizations from Chicago hold signs to protest after an April 10 United Airlines incident in which a doctor was removed from a flight. United said Tuesday that it’s too early to tell how bookings have been affected. Chris Sweda / Chicago Tribune via AP

Skift Take: United says it does not yet know if business was hurt by last week’s bumping drama in Chicago. It’s possible that the airline lost some customers on the margins, but United will be fine long-term. If the price is right, passengers will be back.

— Brian Sumers

Since United Airlines called Chicago O’Hare airport security officers last week to remove a passenger from one of its flights, leading to a violent altercation that was caught on video, the hashtag #BoycottUnitedAirlines has been trending on social media.

But speaking Tuesday on United’s first quarter earnings call, executives said they do not know whether the April 10 incident — perhaps one of the worst public relations debacles in U.S. airline history — has had a measurable affect on advanced bookings. So far, United President Scott Kirby said, the airline has not changed its forecasts.

“It’s really too early for us to tell anything about bookings,” Kirby said. “In particular, for last week, because it was the week before Easter. That’s normally a very low booking period. We just don’t have any quantifiable data.”

Asked specifically about bookings from China — the video went viral on Chinese social media site Weibo — Kirby said United does have enough data. United is by far the largest U.S. airline in China, though analyst Hunter Keay of Wolfe Research said ticket sales from Chinese customers probably represent only 3 percent of United’s overall revenue.

“It’s a small numbers problem,” Kirby said. “There’s a lot of volatility for bookings from point-of-sale China so it’s really too early to say anything about it.”

The incident, in which Dr. David Dao was dragged off a United Express flight from Chicago to Louisville, Kentucky when he refused to give up his seat for an airline employee, was among the word’s most viral and controversial stories last week.

Many United customers and potential customers asked how the carrier could forcibly remove a passengers who had already boarded and give that seat to an employee. Others acknowledged United has a right to ask passengers to leave, but asked how United could permit security officers to drag him off the plane so harshly.

“There have been some concerns from corporate accounts, which [is] totally appropriate,” Kirby said. “We feel like we have managed that pretty well and our corporate accounts are largely supportive. They want us to fix this. They want us to do the right thing. But they believe in us and believe that we will get this fixed and that at the end of the day we will be stronger and have better customer service.”

United CEO Oscar Munoz, who in a written statement last week first blamed Dao for being “disruptive and belligerent,” said Tuesday he takes full responsibility — “the buck stops here” — but added that he would keep his job. Munoz also said no one would be fired. “It was a system failure across various areas so no there was never a consideration for firing an employee,” he said.

Investment analysts not concerned

United’s stock has vacillated since the altercation but investment analysts who follow the carrier — and fret about nearly everything that could make shares less valuable — seem unconcerned the incident will change the carrier’s long-term financial prospects.

On Tuesday, analysts questioned United’s top executives for an hour, yet only one asked a about Dr. Dao’s experience. The analysts were far more concerned about United’s plans to add more flights, with some fearing more capacity might lead to market share battles, which could lead to lower revenues for airlines. The executives said it makes sense for United to add routes, since as recently as early 2015, before Munoz and Kirby joined the company, United tried to cut its way to improve profitability — without any success.

In note published April 14, Keay said he expects this issue eventually will fizzle. He noted that Spirit Airlines had a similar viral incident in 2012, when it refused to refund a ticket for a dying military veteran who was too sick to fly. “Spirit stock sold off on heavy volume,” Keay said. “It was a PR disaster… until people forgot about it.”

Keay said whatever legal settlement United reaches with Dr. Dao likely will not have a material effect on the airline’s finances. And he said most customers should return.

“Switch away from United for repeated bad service – sure, many have done that in recent years – but boycotting United in sympathy for an incident for which there is minimal, if any, specific precedent and for one that will likely drive policy change and some crow eating by management?” he said. “That seems dramatic.”

Changing policies

United has already outlined two changes to its procedures, and Munoz told analysts the carrier will use a “more common-sense approach” in dealing with passengers.

The airline said it will not call police or security unless a passenger is a threat to safety or security. The airline also said employees who must fly will need to book at least an hour before departure. This will ensure that, if a paying passenger loses a seat so an employee can fly, the customer will learn about it in the gate, rather than after boarding.

United has not said it will stop bumping passengers, but Munoz said the carrier will share more policy changes by April 30.

In his note, Keay suggested airlines offer more generous compensation to passengers it removes from flights.

Last year, he said, United involuntary bumped 3,765 passengers. Airlines are required to pay each bumped passenger no more than $1,350, but Keay asked whether airlines may want to pay more, perhaps as much as $3,000. “This seems easy,” he said, “And it might be underway.” He said the cost to the airline would be negligible, and it would help the carrier avoid future public relations hits.

Strong quarter

This viral event overshadowed a strong first quarter from United. The airline reported net income of $96 million, with a pre-tax margin of 1.7 percent.

Its passenger revenue per available seat mile, or PRASM, a closely-watch metric that measures how much revenue an airline makes for each seat it flies one mile, was flat on a year-over-year basis. This is a big deal, as most airlines have been reporting year-over-year declines in recent quarters, as average ticket prices have declined in many markets.

In the second quarter, United expects its PRASM to increase, year-over-year, for the first time since early 2015. The airline predicted PRASM will increase between 1 and 3 percent.

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Skift Video: How Meeting Planners Can Rethink Event Design

Skift Take: SkiftX went to Bellagio and ARIA in Las Vegas to get a behind-the-scenes look of how a major corporate event comes to life and how smart meeting planners are thinking about the future of event design.

— Matt Heidkamp

In an age where information and entertainment is never more than a smartphone click away, conference planners face the difficult challenge of keeping audiences engaged. How should the future of attendee-first event design take shape? Skift went to Las Vegas to see first-hand how event experts at Bellagio and ARIA worked with Adobe to develop multidisciplinary programming, immersive environments, and seamless experiences during Adobe’s Worldwide Sales Conference.

We also met with SkiftX Editor Greg Oates, who deciphers these strategies into the emerging 2017 Megatrend: the Festivialization of meetings and events.

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The Hidden Costs of Those Cheap Transatlantic Flights

Simon Wright  / Norwegian

A Norwegian 737-800 aircraft at Gatwick. The carrier is one of a number to offer low-cost transatlantic flights. Simon Wright / Norwegian

Skift Take: It’s probably not a shock to find out that those bargain-basement fares aren’t quite as attractive as they seem. Still, the likes of Norwegian and Wow Air are at least offering customers more choice and at the same time making the transatlantic market even more competitive.

— Patrick Whyte

Chicago to Reykjavik for $99. Los Angeles to Barcelona for $149. Denver to London for $199. It’s never been cheaper to fly across the Atlantic.

According to the hype, at least.

In recent years, relatively new low-cost carriers such as Norwegian Air Shuttle ASA and Iceland’s Wow Air have begun offering eye-poppingly low fares connecting the U.S. and Europe—rather than sticking to a single, compact region. The latest transatlantic player to join the fray is Level, from the European parent company that owns British Airways, Aer Lingus, and Iberia. It will begin flying in June with four routes from its new hub in Barcelona to Los Angeles, Oakland, Buenos Aires, and Punta Cana, Dominican Republic, with advertised prices starting at $105-$149 one way. Air France is following with a low-cost subsidiary, Boost, later this year.

But are these flights really as cheap as advertised? Sometimes with low-cost fares, you get what you pay for: inconvenient schedules, maybe, or arrivals at less-than-convenient airports (like London Gatwick instead of Heathrow, or Hartford instead of New York’s JFK). Other times, you’re suckered into a myriad of hidden fees.

We took a look at three existing budget airlines offering trans-Atlantic flights and tallied up what they really cost, after fees and necessary options like baggage surcharges. We also tried to see if the lowest advertised fares were really available, and then compared the totals to offerings from rival, full-cost airlines. Here’s what we found:

Level: A Newcomer With a Promising Offer

The promise: €99 ($105) fares between Spain and the U.S.

The perks: Each seat has its own 9-inch personal entertainment system, and in-flight Wi-Fi is available for purchase. Spring $500 (each way) for Premium Economy to get roughly 6 inches of extra legroom plus a three-course meal, noise-canceling headphones, and two free checked bags.

The hidden fees: Basic fares include just a single piece of hand luggage, and the airline charges extra for checked bags, onboard meals, and amenity kits with a blanket and pillow.

What it really costs: As much as $1,030. The cheapest advertised fares from Oakland to Barcelona ($254 round-trip) were sold out as far as we could find; the best deal we spotted was a $450 round-trip ticket for next February. Fares for this June and July were twice as much, at $900. Adding a checked bag and a meal cost $65 in each direction, generally speaking.

How much you save: Compared with similar flights on American Airlines, British Airways, Iberia, and Vueling, you’ll save from $300 to $600.

Norwegian: A Trailblazer With Serious Fees

The promise: A comprehensive network of routes that start at just $65 between New York and Dublin or Edinburgh. The latest addition: $199 from Seattle to London Gatwick.

The perks: Service out of 13 U.S. airports and into 123 European cities gives Norwegian the broadest route coverage of any trans-Atlantic low-cost carrier. And a fleet made up mostly of Boeing 787 Dreamliners means you’re likely to get free video on demand and built-in power outlets.

Sticker shock: The lowest economy fares don’t include checked bags ($65), seat selection ($45 each way), drinks ($4-$15), blankets ($5), snacks ($4-$11), or meals ($45). You can, however, buy those extras as bundles to save money overall.

What it really costs: We successfully tracked down $199 fares from Seattle to London, but return legs started at $279 on most days from September to November. Tally up the extra costs, and you’re looking at $660 round-trip, minimum.

How much you save: Not much. British Airways and Virgin Atlantic operate on this route, and their lowest average airfares in the same time frame come in at … $628. Seat selection is extra on both airlines (up to $75)—a small price to pay to earn more valuable frequent-flier miles on a bigger carrier.

Wow Air: Not That Great of a Deal

The promise: $200 round-trip fares from seven U.S. cities (now including Chicago) to Reykjavik.

The perks: Planes are no-frills, with universal power plugs instead of onboard entertainment systems. (Bring your iPad.) But frequent fare sales make it relatively easy to score a bargain.

Sticker shock: Convoluted “optional” fees vary depending on your route and include everything from carry-on bags ($39.99-$49.99) to selecting a seat ($8.99-$11.99 in each direction) to checked bags ($49.99-$69.99). You can also pay more for extra legroom, meals, cancellation protection … the list goes on (and on).

What it really costs: Chicago-to-Reyjavik fares were available for $99, albeit briefly—now the lowest round-trip fare is hovering around $390. Add luggage, food, and a decent seat, and you’ll spend $660 on that same ticket.

How much you save: Zilch. Icelandair services the same route for $628, including checked luggage, carry-on, seat selection, and even a full meal.

The Silver Lining

Despite fees and fares that can be hard to navigate, the growing number of low-cost carriers operating trans-Atlantic flights is an overall boon for travelers.

Among other things, their shockingly low airfares have forced traditional carriers to restructure and reprice their own fares on once-monopolized routes, keeping fares lower in general. (On the flip side, they’ve also set a precedent for major airlines to start nickel-and-diming you for every last detail—which means you get less for less across the board.)

A growing range of more-transparent booking options on affordable carriers is also making it easier to bundle ancillary fees for a reduced total price. (A “WOW Plus” fare including a checked bag and carry-on will save you $10 on the respective fees, for instance. Not much, but it helps.) And who can complain about a world in which sub-$600 flights between the U.S. and Europe are regularly within reach?

©2017 Bloomberg L.P.

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

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Peek Acquires Zozi’s Assets in Further Consolidation of Tours and Activities Tech Sector


Peek and Zozi offer software to tours-and-activities merchants, whose market is estimated at more than $100 billion a year in sales to travelers and locals although it is a very fragmented market. Peek

Skift Take: The market for software to tour merchants is fragmented without a single clear leader. Yet Peek now has an advantageous position, thanks to the acquisition of the assets of one of its chief rivals.

— Sean O’Neill

Two of the most heavily funded, venture-backed reservation services and marketplaces for tours and activities are essentially merging, as the healthier Peek acquires the assets and employees of Zozi.

Peek, which has raised $16 million in publicly disclosed funding, is acquiring the assets of Zozi, which has raised more than $44 million. The terms and nature of the transaction are not being disclosed.

Ruzwana Bashir, the chief executive of Peek, claims that “this merger will make Peek the largest platform for tours and activities in the world,” although Skift couldn’t verify that.

Bashir is referring to the backend techology part and not the consumer-facing element. TripAdvisor’s Viator and GetYourGuide, both of which were heavily funded, do not sell backend reservation software.

Over time the Zozi brand will be phased out. Customers of Zozi’s enterprise software platform, Advance, will be moved to Peek’s Pro platform. “There will be no changes in cost, but there will be exciting enhancements in service,” says Bashir.

Peek, founded in 2012, will also move merchants using Zozi’s direct to consumer marketplace to Peek’s site, Peek.com, and will phase out Zozi’s consumer offering.

Documents recently filed say that Zozi in the past year raised more than $10 million. Is that money going to be rolled over into Peek’s hands? Bashir said she couldn’t disclose the structure of the deal.

In March, Zozi had to lay off 38 percent of its employees.

Tours platform startup Zozi, which, as noted, had raised more than $44 million in publicly disclosed investment since its creation in 2007, became mired in trouble as its founder, TJ Sassani, and its investors increasingly disagreed on both the company’s direction and his performance.

Last month he filed a lawsuit against Zozi’s investors. Peek wouldn’t comment on the state of that suit. But in response to a question, Bashir says, “We don’t believe Peek is exposed to any legal risk.”

Consolidation has picked up in the software sector for tour merchants. In July, Zerve, another well-funded tours platform, shut down, due to a cash flow crunch. It accepted an approximately $100,000 payment from FareHarbor, which claims it has since on-boarded “up to 90 percent” of Zerve’s clients to its system.

As of today, FareHarbor says it has more than 4,200 merchants using its system and that it has been adding 100 to 150 new accounts per week.

In 2015, Swiss-based Palisis, which provides software solutions for ticket operators, acquired TourCMS, a reservation system and distribution service. The combined entity says it processes more than $1 billion in transactions a year.

Palisis/TourCMS mostly depends on its work for Gray Line, one of the largest tour providers worldwide. Yet many Gray Line operators do even use the software to manage their business and the company does not seem to be active in technological investment or gaining market share.

Bashir says Peek grew “10x in the last 2 years” although the company didn’t reveal from what base.

Crowded Market

Peek and Zozi have been adept at receiving venture capital. But there are other players in the software market for tours merchants. That’s because the $100 billion tours-and-activities market is still fragmented when it comes to enterprise software. Other companies that offer B2B tours and activities tech systems for suppliers and marketplaces, in addition to the ones noted above, include Bookeo, BookingBoss, Checkfront, Coras, Reservation Genie, Rezgo, Treksoft, Varitrip, and Xola.

The consolidation will assist the drive by tours and activities to finally come into their own, one of the megatrends that Skift is watching this year. Until now, tour merchants have been reluctant to embrace online reservations, as noted in the Skift Research Report on the State of Tours and Activities Tech 2017.

Due to the deal, “many” of Zozi employees will join Peek’s team, the company states. “We’re excited to bring in Zozi’s team members who have incredible expertise.” The companies will be deciding which features of the combined software tools might be merged into the final product, such as the ability of Zozi’s iOS mobile app to allow merchants to reduce fraud risk by accepting mobile payments with an EMV-compatible chip reader.

Although Peek is not keeping all Zozi employees, it says that it is hiring or has recently hired top talent in sales, product, and engineering.

Bashir says she sees Peek as primarily a technology company and that it will continue to prioritize technology investment this year.

For more, see Bashir talk on stage with Skift founder Rafat Ali at November 2016’s Skift Global Forum New York: Video: Why Peek Still Sees Opportunity in the Tours and Activities Market

Ryan Wolkov

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Launching Today: Skift New Luxury Travel Newsletter

Skift Take: All luxury is not created equal, and understanding the modern luxury travel market requires a new approach and a deep appreciation of the sophistication of modern consumers and providers.

— Jason Clampet

Skift is expanding its scope of coverage into various sectors of travel, and we are now looking at the business of modern luxury travel.

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. We’ll keep in mind the needs of the specialist travel agents who sell these products as well as the sophisticated consumers who shop for them.

Skift has covered elements of luxury travel — from agents to hotels to airlines and even retail — for many years. 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 the ones you’ll find below.

We will build on our earlier successful coverage with the addition of two dedicated freelancers who will contribute to supplement our existing coverage. These expert contributors will also author the weekly newsletter, which will be our fifth specialist newsletter.

Veteran travel journalist Laura Powell has covered the industry for more than two decades. She helped develop CNN’s original travel program and covered the beat for the network for nearly five years. Her work has appeared in The Washington Post, Forbes and several airline magazines. She regularly appears on Washington, D.C. television to provide commentary on the travel stories of the day.

Former Skift reporter Samantha Shankman will be contributing stories from her base in Barcelona, Spain. As one of Skift’s early reporters, Shankman has contributed stories on trends, tourism, and spending across all sectors of the industry. She’ll be looking at the luxury sector through the lens of research reports, interviews, and more.

This Week’s Coverage

This first week Powell looks at the attraction of isolation for high-end travelers. With “Isolation Is the Next Big Thing in Luxury Travel,” we see travelers who don’t necessarily want to go off the grid, but they do want to go where access and wealth can make many distances insurmountable.

With “China’s Luxury Travelers Are Young and Spending More Than Ever,” Shankman dives into a Deloitte report on luxury spending that seeks to delineate between the shopping power of Chinese tourists to specifically say what high-spending millennials are after.

The Future

In future weeks, we’ll look at luxury through specific lenses, from products, to consumer behavior, to lessons from retail and food, and beyond, in addition to traditional travel sectors such as hospitality, cruises, airlines, and tourism.

If you want to share your expertise or insights into luxury travel, please don’t hesitate to email me at jc at skift dot com.

Sign up for Skift’s New Luxury Newsletter

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Emirates Copes With U.S. Traffic Drop From Trump Travel Bans


Emirates is seeing a drop-off in passengers to the United States but a surge in China is making up for the falloff. Pictured is a promotional photo from the airline. Emirates

Skift Take: For Emirates, what the U.S. taketh away, China giveth back given its rise in outbound tourists. The Gulf carriers will survive through Trump’s travel bans but it shouldn’t have to be this way.

— Dennis Schaal

Emirates has seen U.S. traffic slip following President Donald Trump’s efforts to ban travel from six Muslim-majority countries and restrict electronics on flights from Mideast airports.

The world’s biggest international airline, which routes passengers from across the globe through its hub in Dubai, is ready to shift travelers to other parts of its 155-destination network to “cope” with demand changes, Thierry Antinori, Emirates’ chief commercial officer, said Tuesday.

“We see people waiting a bit, especially in Iran,” with some knock-on effect in India, where Emirates is a key conduit to the U.S., Antinori said in Dubai. Passenger flows between these countries and the U.S. are “moderately slow.”

Meanwhile, growth in China is helping Emirates offset headwinds in the U.S. With double-digit increases in demand, the country has been “a good growth story for Emirates,” Antinori said.

The comments show how Gulf carriers are weathering the squeeze stemming from Trump’s travel policies by leveraging their massive networks and upgrading services. Qatar Airways on Monday said it saw demand for U.S. flights decline by less than 10 percent, which Chief Executive Officer Akbar Al Baker called a “manageable” drop. The state-owned Gulf airlines, including Etihad Airways, responded to the electronics ban by offering some passengers loaner laptops or tablets in a bid to hold on to lucrative international business travelers.

Those responses appear to be helping to absorb the brunt of the impact. After Trump’s first travel ban, Emirates President Tim Clark said the rate of booking growth dropped by as much as 35 percent.


©2017 Bloomberg L.P.

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

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Bangkok’s Famed Street Food Will Now Be Scarce When Tourists Visit the City

Sakchai Lalit  / Associated Press

In this April 7, 2017 photo, people eat noodles at a street food shop during their lunch on Thonglor road in Bangkok, Thailand. Officials see street food as an illegal nuisance and have warned hawkers in Thonglor to clear out by April 17. Sakchai Lalit / Associated Press

Skift Take: The military junta wants to take the soul out of Bangkok by ridding the city of street-food vendors. Do they know they are shooting themselves in the foot tourism-wise?

— Dennis Schaal

Efforts by authorities in military-ruled Thailand to impose order on the chaotic capital city have a fresh target: cheap and tasty pad thai.

The latest crackdown by Bangkok city officials is going after the vendors whose carts sell everything from Thailand’s signature noodles to spicy tom yum goong soup have become institutions on the capital’s hot and humid sidewalks. The stalls with their metal folding tables and rickety plastic stools serve as a gastronomic go-to for budget-conscious locals and adventurous tourists alike.

“Street food is a big part of daily life,” said Nont Nontiskul, 29, a stockbroker who has lived in the city’s trendy Thonglor area for more than a decade. “Even people who eat at pricy restaurants every day can’t avoid street food. It’s faster, tastes better, and costs less than half the price.”

Officials see street food as an illegal nuisance and have warned hawkers in Thonglor to clear out by April 17. They’ve said the evictions soon will expand to other neighborhoods. Officials have been emboldened by the military junta that has ruled the country since a 2014 coup and has stressed the need to clean up Thai society, whether it is corrupt politicians or crowded footpaths.

That has led to sometimes ham-fisted crackdowns on everything from street markets to beach umbrellas to overpriced lottery tickets. Observers say the poor, many of whom were supporters of the ousted government and its populist policies, have borne the brunt of many of the junta-backed campaigns and that the clean sidewalk effort will hit the vendors and their working-class customers hardest.

Thai crackdowns on corruption, prostitution, pollution, road safety and what-have-you — even those by the junta — are notoriously ephemeral, but officials are talking tough.

Boontham Huiprasert, a Bangkok district chief tasked with clearing out the sidewalks under his jurisdiction, said street food vendors are being evicted to fight traffic congestion and the accumulations of garbage.

About 90 Thonglor vendors and their carts will have to leave by Monday, after which the crackdowns will expand to neighboring streets, Boontham said. Violators could be fined up to 2,000 baht ($57).

“Just don’t sell on the sidewalks,” Boontham said. “People who sell stuff on the sidewalks, they don’t pay rent. There are so many out there now, so we have to organize society.”

In fact, the food sellers say they do pay rent in the form of small monthly under-the-table payments to city officials. It’s an open secret that Bangkok’s sprawling shadow economy is made possible by payoffs to powerful figures, often with ties to police or the military. Boontham said he was unaware of any payoffs and that it was not official practice.

Suchin Wannasutr has been selling khao kha moo — stewed pork leg — for 40 baht ($1.15) a plate on Thonglor’s sidewalks for more than 20 years. The 47-year-old said he has been diligent about keeping up his monthly payoffs of 1,000 baht ($28.60), which is the same sum neighboring vendors say they have been charged.

He is now preparing to open a real restaurant, about 1.5 kilometers (a mile) away from his sidewalk spot. He will share the rent of 35,000 baht ($1,000) a month with three fellow street vendors.

“I have to stay in the area because I have regular customers here,” Suchin said. “I’m doing whatever I can just to send my kid through school. Once she graduates, I will move out of Bangkok. It’s tough here.”

Critics say the government needs to do more to help vendors and to help preserve some the unique chaos that gives Bangkok its soul, which is rapidly being lost to government regulations and redevelopment for condos, shopping malls and office towers.

If the campaign against street food sticks, tourists will no longer stumble upon fried worms, grilled pork intestines or the legendarily smelly fruit durian. And it’s unlikely the hip bars and fancy restaurants will be handing out food in plastic bags sealed tight with a knotted rubber band.

“I feel like I am losing my job and I have no idea what to do next,” said 39-year old Ubolwattana Mingkwan, who sells coffee for 30 baht (85 cents) a cup. “I can’t afford to pay Thonglor’s rent prices.”

“I’ve asked city officials for help and understanding,” she said. “All they say now is ‘No, no, no.’ They said they’ve already received their orders.”

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

Ryan Wolkov

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