APRIL 2017 NEWSLETTER
Cathay Pacific Will Increase Service to
Europe, Australia & San Francisco
PAGE 4
Airbnb Buys Luxury Retreats
PAGE 3
Travel Agents Make A
Comeback: Millennials Top
Audience
PAGE 2
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INFocus Newsletter
Travel Agents Make A Comeback:
Millennials Top Audience
By Travel Daily Media
When is the last time you booked a trip
through a travel agent? Chances are you
book directly through airlines and hotels,
or look to sites like Expedia, Kayak or Trip
Advisor to help you make your decision.
But a new study shows more and more
people are turning to travel agents and
advisors for convenience and knowledge.
A report by the American Society of Travel
Agents surveyed 14,000 U.S. households
more people are turning to travel agents.
And according to the same report the
generation using this service the most are
busy millennials who don’t have time to
sort through thousands of online reviews,
and have the cash to spend to ensure their
trip is planned perfectly. The report found
that more than 30 percent of millennials
said they used an agency in the 12 months
prior and almost half would recommend
using a travel agent to friends or family.
“There are a few different reasons that
people are turning to travel agents again.
The Internet is absolutely flooded with
information and travel advertisements.
Travelers don’t even know where to start
because everyone is claiming to be the
cheapest and the best,” says Samantha
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INFocus Newsletter
Hartman, a Travel Consultant
Protravel International LLC.
with
“A travel agent can help their client
sort through all of their options. They
can make solid recommendations based
on the clients’ interests and professional
experience. They also ensure that their
clients are getting the best value for their
money.”
Beyond the number of options to sort
through, Hartman, a millennial herself,
also says a travel agent can take the
hassle out of planning.
“Many
young
professionals
are
connected to their jobs 24/7, so they are
beginning to lean on the services offered
by other professionals. Working with a
travel agent is like working with an interior
designer. (Like an interior designer) a
travel agent does the work for you… and
you reap the benefits of a professional,
job-well-done,” says Hartman.
Mahesh Chaddah, who co-founded
Reservations.com, agrees with Hartman
that millennials are the fastest growing
client component.
“Millennials are known for shaking
up the travel industry and their return to
travel agents stems from their desire to
talk to travel experts to plan all the insand-outs of their perfect trip and the
rise of experimental travel. Essentially,
travel agents are the gatekeepers to their
extreme adventures,” Chaddah says.
Chaddah is also seeing another sector
using travel agencies however.
“Along with Millennials, the luxury sector
and (people booking) multiple destination
trips, are turning to travel agents to not
only help them find the best deals, but
to save them hours of research and trip
planning,” Chaddah says.
And the catalyst for this change in how
travel is being booked?
“Although there has been enormous
advancement in automation, the industry
is seeing a trend to bring back the human
element for more curated bespoke
experiences and provide on-demand
personal travel,” Chaddah concludes.
Airbnb Buys Luxury Retreats
By Julie Sickel
Airbnb Inc. bought Luxury Retreats
in its biggest acquisition yet as the
apartment-rental website takes steps
toward becoming a full-service global
travel company.
Airbnb unveiled the acquisition of the
Canadian manager of high-end rentals and
services Thursday, declining to disclose
financial terms. The cash and stock deal
was worth roughly $300 million, people
familiar with the matter said. Bloomberg
reported the two were in talks last week.
Accor SA, Europe’s biggest hotel
operator, and Expedia Inc., the global
online travel giant, also bid for Luxury
Retreats, people familiar with the matter
said. Those companies’ cash offers were
bigger, but Luxury Retreats decided on
Airbnb partly because its founder, Joe
Poulin, foresaw having more control than
at those other firms, said the people, who
asked not to be identified because the
discussions were private.
Airbnb, Luxury Retreats and Expedia
declined to comment on the bidding
process. Accor didn’t immediately have
comment.
Luxury Retreats, with more than 4,000
properties around the world, has built
a concierge service that Airbnb will be
able to offer to its customers. Premium
vacation-home rentals are a key growth
area for the travel industry, which seeks
greater profit margins on properties rented
to wealthy globe-trotters.
Luxury Retreats will remain based in
Montreal, and Poulin will lead the San
Francisco parent company’s luxury
homes division, reporting to Airbnb Chief
Executive Officer Brian Chesky, the
company said in a statement.
Accor said this month it was in
negotiations to buy Travel Keys, a broker
of private villas in the Caribbean, Florida
and Mexico, adding to its 150 million
euro acquisition of luxury home rental
site Onefinestay last year. Expedia is
expanding its vacation listings business
HomeAway, which has its own high-end
division called Luxury Rentals. The heads
of HomeAway and Onefinestay both left
their companies soon after they were
acquired.
The purchase of Luxury Retreats is just
one of many deals expected for Airbnb in
2017. The company is considering several
acquisitions and partnership deals, people
with knowledge of Airbnb’s plans have
said. Targets are in airfare aggregation,
group payments and pricing tools to help
homeowners make more money when
listing their properties on Airbnb, the
people said. The company, valued at $31
billion, is also focused on doing deals in
China and India, they said.
April 2017
3
Cathay Pacific Will Increase Service to Europe, Australia & San Francisco
By Michael B Baker
In October, Cathay Pacific will add four
weekly flights from Hong Kong to San
Francisco, upping its service between the
two cities to three times daily. The new
flights also will mark Cathay Pacific's first
North America flights to use A350-900
aircraft. At the same time, Cathay will cut
service to Los Angeles from 28 to 21 flights
per week. In the fourth quarter, the carrier
will add a daily flight from Hong Kong
to each Madrid, Manchester and Paris.
Additionally, Cathay Pacific in October will
change its service to Brisbane, Australia,
with a stop in Cairns, Australia, instead
flying direct to Brisbane 11 times a week
and direct to Cairns three times a week.
Delta Increases Aeromexico Stake
By Michael B Baker
Delta has completed its cash tender
offer to acquire 32 percent of Grupo
Aeromexico's outstanding shares through
the Mexican Stock Exchange for US$620
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INFocus Newsletter
million. Adding its previously held 4.2
percent stake, Delta now owns 36.2
percent of Aeromexico's outstanding
shares and holds options to acquire up
to 49 percent, equivalent to its stake in
Virgin Atlantic. Delta also will launch a
new joint venture with Aeromexico during
the second quarter.
American Airlines adds two routes at CLT
By Jen Wilson
American Airlines Group Inc.
(NASDAQ: AAL) has added two routes
to its schedule of flights out of Charlotte
Douglas International Airport.
In an email Monday morning, a
spokeswoman for the airline noted that
weekly service to Georgetown, Bahamas,
and Bangor, Maine, will begin in early
June. Both flights will be operated by PSA
Airlines, American's regional subsidiary,
on Bombardier CRJ-700 aircraft.
The flight from CLT to Georgetown's
Exuma Airport (GGT) will run on
Saturdays only, departing at 9:20 a.m.
and arriving in the Bahamas at 11:40 a.m.
The return flight departs GGT at 12:20
p.m. and arrives in Charlotte at 2:34 p.m.
That route will be suspended during peak
hurricane season, Aug. 20 to Oct. 6.
The seasonal flight to Bangor
International Airport (BGR) also operates
on Saturdays only, between June 3 and
Aug. 19. It departs Charlotte Douglas at
9:30 a.m. and lands at 12:10 p.m., while
the return flight leaves Bangor at 12:45
p.m. and arrives at CLT at 3:35 p.m.
American Airlines, based in Fort Worth,
Texas, is the world's largest carrier by
operations. Its second-largest hub is at
CLT, where American operates more than
90% of local flights.
Airlines rushed to fly to Cuba. Here's why they've now pulled back.
By David A Arnott
Multiple commercial airlines in recent
days have announced they will drop their
flights to Cuba, a stark reversal from the
enthusiasm the industry displayed when
bidding for permission to fly those routes
just last year.
one of the available routes. Once all the
flight routes were granted they went to
market to see what would happen.”
Another theory proffered in that
report is that even though the number of
Americans visiting Cuba has spiked — a
state-run Cuban news source placed it
at 43,200 visitors in January, more than
double the count from a year earlier —
that may be in part due to the novelty.
There may have been a good number of
people interested in going to Cuba for a
first visit, the theory holds, but not nearly
Even airlines that aren’t dropping their
routes entirely are adjusting to what
they’re finding passengers want. Both
American Airlines (NASDAQ: AAL) and
JetBlue (NASDAQ: JBLU) have scaled
back service from what they initially
offered.
The reductions come as airline
executives cite an excess of capacity and
lower sustained demand than expected.
So, was the industry wrong to be so
eager to get flights to the island in the
first place?
There are multiple theories about how
the airline industry ended up in this spot.
One Cuba tour executive suggested to
NBC News that it was a simple matter
of lack of data. Tom Popper of Insight
Cuba said in that report, “Not having any
historical data for 50-plus years on what
commercial flight capacity and volume
would be, everybody wanted to apply for
April 2017
5
Airlines Cut Back.. CONTINUED
as interested in returning again and
again, NBC News said.
In the end, American tourism to Cuba
is in a state of flux, and it’s not just
airlines that have to adjust. NBC News
pointed out that a relative lack of hotel
rooms on the island for the increased
number of visitors has led to inflated
lodging prices. Increased taxi and
restaurant prices have come as well.
There is, however, one segment
of the tourism industry that appears
well positioned for continued business
with Cuba: cruises. The Miami Herald
reported that about 172,000 people are
expected to visit Cuba from the United
States via ship this year.
Unlike airlines and hotels, the Herald
reported, cruises are less exposed to
shortcomings with Cuba’s infrastructure
since their business is already built
around full-service accommodations. To
be sure, cruise lines aren’t completely
insulated from those concerns, the
Herald said, but for now, they’re looking
to grow their business to the island.
the normalization process unless the
Cuban government gives in to certain
demands. That kind of change would
put a major crimp on tourism to Cuba,
drastically affecting business for multiple
industries, including airlines and cruises.
There is one additional
possible complication
that could be outside
the airlines' and cruise
companies’ control. All this
tourism to Cuba is made
possible by executive
policy changes put in
motion by the Obama
administration, and there’s
no guarantee the Trump
administration will maintain
those policies.
As the Herald noted
in a separate story,
from January, the new
administration has already
said it would review the
United States’ Cuba policy,
and Trump himself has
suggested he might end
Call Travel Vacations to Book Today: 800-627-2987
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INFocus Newsletter
Marriott Reports Corporate Uptick in Q4
By Julie Sickel
During the fourth quarter, Marriott
International reported a 1 percent
year-over-year increase in sales to the
legacy company's largest 300 corporate
customers. "Sales to these customers
were flat in the third quarter," Marriott
CEO Arne Sorenson said.
systemwide occupancy increased 0.4
percentage points to 69.6 percent and
average daily rate grew 0.3 percent to
$155.14. For the full year, combined
systemwide occupancy rose 0.6 percent
to 72.5 percent and ADR increased 1
percent to $156.53.
While sales to energy and financial
industry corporate clients continued to
wane, sales to the manufacturing sector
picked up 4 percent year over year during
the fourth quarter, Sorenson said. Hilton,
too, reported positive corporate demand
during the last quarter of 2016.
For its full-year 2017 outlook, Marriott
maintained its previous guidance for
North American revenue per available
room growth in the 0 percent to 2 percent
range. Eighty percent of negotiated
corporate business for 2017 is already
priced at a low single-digit rate increase
for comparable customers, Sorenson
said, but Marriott also is signing up more
accounts. Full-year group revenue pace
at company-operated, full-service hotels
across Marriott's combined portfolio is up
about 3 percent year over year.
Marriott's earnings call with investors
and analysts marked the first time it
reported combined earnings following
the closure of its September acquisition
of Starwood Hotels & Resorts. For the
combined company, fourth-quarter
Austria Halves Air Travel Tax Rates
"Do we feel more optimistic about 2017
than we did a quarter ago? The short
answer is yes," Sorenson said. "There
is considerable data that shows broad
expectations for stronger GDP growth in
2017." However, he said, hotel industry
metrics and data around group booking
trends and special corporate negotiations
don't yet give "clear enough proof that
GDP is in fact growing at a higher rate
or that the greater prevailing optimism is
impacting our business."
The company's fourth-quarter adjusted
net income increased 15 percent year
over year to $334 million. At year-end,
Marriott's global development pipeline
was 2,493 properties, totaling 420,000
rooms.
New Mumbai Flight Boosts Brussels
Airlines Summer Capacity
By Julie Sickel
By Michael B Baker
Austria will cut its air travel tax rates in half next year,
according to the International Air Transport Association.
On Jan. 1, 2018, the rates will drop to €3.50 per
passenger for short-haul flights, €7.50 for medium-haul
flights and €17.50 for long-haul flights.
Brussels Airlines is boosting its summer capacity 8
percent year over year, including new service between
Brussels and Mumbai five times a week beginning March
30, the carrier announced. Other new service includes
weekly flights to Yerevan, Armenia, as well as increased
service to Washington, D.C.; Toronto; Paris Charles de
Gaulle Airport; Nantes, France; Naples, Italy; Warsaw;
Athens; Accra, Ghana; and Abidjan, Cote d'Ivoire.
April 2017
7
Etihad Is Adding Bigger Planes to Paris Routes as Travel Demand Rebounds
By Julie Sickel
Etihad Airways is introducing its
superjumbo aircraft to Paris in a vote of
confidence that the French market is
rebounding from a travel slump following
a spate of terror attacks.
The Abu Dhabi-based airline will deploy
an Airbus Group SE A380 now serving
Mumbai for one of two daily flights to Paris
during the peak July 1-to-Oct. 28 summer
timetable, Etihad said in a statement. The
carrier will assign an Airbus A340-600 to
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INFocus Newsletter
the Indian route, a spokeswoman said in
an e-mail.
The adjustment meets “growing
demand,” Peter Baumgartner, the head
of the carrier, said in the statement. The
496-seat A380 will replace a 328-seat
Boeing Co. 777 on the Paris route, lifting
daily capacity by 26 percent.
Travel to France has dropped following
a series of terrorist attacks that started
in 2015, with foreign visitor arrivals by air
falling 8.1 percent in the first 10 months
of last year. The government outlined a
series of measures in November intended
to improve security for tourists.
Etihad also flies the double-decker
A380 to London, Sydney, New York and
Melbourne.