This Week’s Take offers you a capsule summary of the high and low lights of TakeOffeh.com’s Daily Dispatches from the past seven days.
Back To Front?
When you pull back the curtain dividing economy from premium seats on many planes these days, you’ll find a lot of those big, comfy seats masquerading as passengers. Or you’ll find a bunch of passengers masquerading as premium-paying flyers. As the Globe and Mail’s Brent Jang reported this week, the big question for airlines is whether there will ever be a return to the days of business class travellers subsidizing mass air travel by paying up to 10 times as much as economy passengers. The big airlines – referred to as ‘legacy carriers’ — have relied heavily on premium revenues. As well as being hammered by corporate travel cutbacks, they’re also being pecked to death by low-cost carriers. “The legacy carriers are in deep trouble,” Kevin Mitchell, chairman of the U.S.-based Business Travel Coalition, told Jang. “God forbid that we get another huge run-up in oil prices. It’s going to be disastrous. The sustainability of the global airline industry is going down, down, down.” Those are sobering words for a troubled industry, and they’re reflected across the pond too. U.K.-based Air & Business Travel News says in an analysis piece that it is unlikely high flying lawyers, bankers and the like will settle for the back of the bus when the economy improves, but mid-level execs might have to.
You Can Keep Your Shoes On
If you hate taking your shoes off when going through Canadian airport security, just say no. Actually, you shouldn’t even have to say no, because airport screeners are being told not to ask. Canadian Press reported this week that the Canadian Air Transport Security Authority(CATSA) has issued a bulletin to front-line security officers instructing them not to ask passengers to doff their footwear before boarding domestic or international flights. (The exception is for passengers heading to the U.S.) Interestingly, Canadian Press had to use the Access to Information Act to access the bulletin, which suggests that CATSA doesn’t really want the rules advertised. Further confusing the issue, a CATSA spokesperson said the bulletin is nothing new, just a reaffirmation of existing policy. Then why did the bulletin state that the shoe directive was “effective immediately?” Footwear became a security focus when hapless would-be bomber Richard Reid tried to ignite explosives hidden in his shoe on an American Airlines flight. Let’s just all be thankful he didn’t hide a bomb in his Jockeys.
Fewer Cars, Higher Prices
In many travel industry segments, slumping demand has led to lower prices. Not so in car rental, where smaller fleets have mitigated the effect of lower demand. According to USA Today, leisure travellers are taking the brunt of higher prices. Car rental consultant Neil Abrams told the publication that leisure rates based on a sampling of eight major rental companies in 10 U.S. airport locations were up as much as a startling 36% this summer. Like airline seats, rental cars have become more of a commodity in recent years, and consumers have usually been the winners, paying very low rates, especially in leisure destinations. A car rental executive once lamented to TakeOffeh that it was more expensive to rent a $700 chainsaw than one of his $30,000 cars.
The first Holiday Inn opened in 1952 in Memphis, on the main road to Nashville. The name referred to a 1942 Bing Crosby film and the chain that became one of the world’s most familiar brands had its genesis in a family road trip made miserable by lousy roadside motels. Founder Kemmons Wilson was a homebuilder and seized on the idea of building inexpensive family accommodations, with diverse locations offering a consistence experience.
Today, with its 1,300+ hotels and 240,000 rooms, Holiday Inn is part of the massive InterContinental Hotels Group, (630,000 rooms, 4,300 hotels) and, as the Globe and Mail reported this week, it’s in the midst of a massive billion-dollar brand makeover. Holiday Inn wants you to think of it as a scent- and soft-music filled accommodation experience targeted to young families rather than a roadside stop with a memorable sign. While competitors are dropping star ratings to cut costs, Holiday Inn is investing in its product, hoping to position itself for prosperity during recovery. Truly a global brand name now, Holiday Inn has been in China for 24 years, and an IHG executive told the Globe that a recent study found the Chinese believed Holiday Inn was a domestic brand.
It’s a common peeve of travellers that airlines, cruise lines and tour operators make it difficult to grasp the actual price of the product. While most hard goods come with clear price tags, travel products often don’t, separating out taxes and fees and surcharges and who knows what else. As Consumer Traveler’s Christopher Elliott reported this week, Costa Cruise Lines got bitten back for the practice recently, absorbing a $36,000 fine from the U.S. Department of Transportation for failing to disclose fuel surcharges and taxes in its advertising. We have the same problem here in Canada, as TakeOffeh.com contributor Douglas McArthur reported in the Globe and Mail back in March. The story’s headline summarized the issue succinctly: “How does a $224 flight end up costing $826?” As Debra Ward reported right here on TakeOffeh: “Some travel industry pricing practices would not stand up to the scrutiny of misleading advertising legislation in any other industry.” How do they get away with it? Bluntly, it comes down to the government sitting on its hands. A provision requiring truth in airline advertising was part of a bill passed in Parliament last year. But thanks at least in part to airline lobbying, that section was removed by the Senate, which called for more talks between government and airlines. Since then, there’s been nary a peep. So keep that calculator handy.
Bruce Parkinson is a travel industry journalist and regular contributor to TakeOffeh.com as well as OpenJaw.com.
Photo Credits: Arand, monkeybusinessimages, holidayinn.com, costacruise.com