Skift Daily Travel Briefing

Episode NotesA new report said JetBlue Airways is planning to raise airfares on routes flown by Spirit Airlines by as much as 40% if the two carriers’ proposed merger is approved, reports Edward Russell, editor of Skift publication Airline Weekly. JetBlue would increase fares between 24% and 40%, according to a report by legal news service Law360. The report cited documents released as part of a lawsuit brought by travelers looking to block the JetBlue-Spirit deal. The travelers suing JetBlue argued that the proposed merger would reduce competition for consumers. Russell notes their lawsuit is separate from the U.S. Department of Justice’s suit to stop the merger. JetBlue said in a statement that, without context, the information gave a “completely inaccurate picture of the facts” and that the proposed merger would result in low fares and better service. Russell adds that while airfares rose substantially last year, the average domestic airfare has dropped below pre-Covid levels. Next, travelers flying Qantas to the U.S. have historically arrived in Los Angeles to connect to other cities across the country. But the Australian carrier is looking to serve U.S. and Asian cities with a new plane order, reports Russell. Russell writes the airline has ordered 24 new long-range planes for both the U.S. and Asia that will see it add more nonstop flights to both regions. That means Qantas’ future will see more flying to Chicago and Seattle than Los Angeles. Qantas CEO Alan Joyce said on Thursday the new aircraft will enable the carrier to have more direct flights into the U.S.Finally, American Airlines has filed a federal lawsuit against hidden city flight platform Skiplagged, reports Executive Editor Dennis Schaal.Schaal writes that American alleges that Skiplagged sells flights without authorization and misleads flyers with deceptive offers, among other practices. Skiplagged is famous for offering hidden city flights, where passengers seeking a bargain ditch the rest of their journey at a layover. Schaal notes that airlines prohibit hidden city ticketing because of operational hassles and lost revenue. American is the latest major travel brand to sue Skiplagged, following Orbitz, United Airlines and Southwest Airlines. Skiplagged founder Aktarer Zaman told Skift he is fighting to protect consumer rights to find favorable airfares. 

Episode NotesMaui’s tourism industry faces an uncertain future as the island recovers from the massive devastation caused by recent wildfires. Maui’s hotels have suffered enormously in the aftermath of the destruction, writes Global Tourism Reporter Dawit Habtemariam.Habtemariam reports that nearly half of all hotel rooms in Maui were unfilled last week. The island’s hotel occupancy rates were 49% for the week ending August 19, according to commercial real estate information provider CoStar. Although the Hawaii Tourism Authority is encouraging travelers to visit areas of Maui away from the destruction, Habtemariam writes the state’s tourism leaders are facing a messaging challenge regarding the island. Three major U.S. airlines have cut their number of scheduled flights to Maui over the past week. The wildfires have claimed more than 110 lives in addition to causing billions of dollars of damage.Next, U.S. hotel companies have viewed China’s economic boom as a vehicle to boost hotel development. However, China’s economic turmoil could derail their plans, reports Senior Hospitality Editor Sean O’Neill. Hilton, Hyatt and Marriott are companies that have unveiled major expansion plans for China. Although O’Neill lists several reasons why hotel executives find China enticing, including the potential to expand quickly, he notes the country’s current economic woes are complicating growth plans. Hotel development in China recorded an 8% year-over-year drop in the second quarter. In addition, Bloomberg Economics Chief Economist Tom Orlik said China’s biggest challenge is that’s working-age population is decreasing. The country population’s fell last year, with O’Neill writing that an aging population will create multi-year problems economically. Finally, Wynn Resorts expects to obtain a gaming license soon for the United Arab Emirates’ first casino, reports Asia Editor Peden Doma Bhutia. Wynn Resorts CEO Craig Billings said recently the company has everything it needs to operate gaming at the Wynn Al Marjan property. Billings added that construction on the casino has already started. Skift reported last November that Wynn had confirmed the property would house a casino. However, Bhutia notes that questions about the casino have lingered to the country’s strict Islamic laws that typically don’t permit activities like gambling.   The Wynn Marjan is scheduled to open in 2027

Episode NotesEurope is experiencing a major air traffic controller shortage. It’s not only delaying flights, it’s hurting the continent’s travel recovery, reports Edward Russell, editor of Skift publication Airline Weekly.European airspace manager Eurocontrol found flight delays have increased 6% from last year, attributing those disruptions in part to air traffic controller staffing shortages. Russell writes the staffing shortage appears the worst in France and Germany, the two countries at the heart of Europe’s air traffic control system. One industry executive said European air traffic controllers, often run by individual countries, are at least 700 controllers short of target staffing levels. Meanwhile, Lufthansa Group CEO Carsten Spohr said in July that air traffic control and other industry constraints would limit growth through at least 2024. Next, global investment in the travel industry has dropped from pre-pandemic levels. How much? Roughly $100 billion, writes Global Tourism Reporter Dawit Habtemariam. Habtemariam reports that $856 billion was invested in the industry last year. While that’s an 11% jump from 2021, it’s substantially below 2019’s figure. Habtemariam notes worldwide investment in travel and tourism isn’t expected to return to pre-Covid levels until 2025. The three countries with the highest levels of investment in travel and tourism last year were the U.S., China and Saudi Arabia. Finally, the U.S. lifestyle and boutique hotel pipeline is projected to grow substantially in the near future, but those forecasts may be overly optimistic, reports Senior Hospitality Editor Sean O’Neill. Analysis by hotel consulting firm The Highland Group said developers and hotel groups are planning to open nearly 60,000 branded lifestyle, soft-branded and boutique hotels by the end of 2027. That figure would represent a 29% annual increase. However, Kim Bardoul, partner at The Highland Group, said those projections are likely too optimistic. Still, O’Neill writes that developers are interested in lifestyle and boutique hotels because of their recent positive financial performance, on par with the traditional, large hotel properties. And there’s growing demand from guests. 

Episode NotesHospitality brand Selina has seen a dramatic swing in its stock price as it attempts to escape from its penny stock status, reports Senior Hospitality Editor Sean O’Neill. The company saw its shares fall 41% last Friday although they rebounded 9% on Monday. O’Neill writes the stock price drop happened after Selina said that 8.6 million shares could be hitting the market soon. Two other hospitality brands, Sonder and Vacasa, have also seen stock prices go to penny stock status recently.  Next, American Airlines pilots approved a new contract on Monday worth nearly $10 billion, becoming the second major U.S. carrier to finalize a pilot deal this year, reports Edward Russell, editor of Skift publication Airline Weekly.  Russell writes pilots at American will immediately see a more than 21% pay raise under the four-year contract. It also includes roughly $1.2 billion in retroactive pay and bonuses. However, Russell notes that the deal was hardly a slam dunk for the Allied Pilots Association, which represents American’s pilots. Only about 73% of crew members voted for the deal. Pilots at Delta Air Lines had ratified a four-year contract of their own in March, which included an up to 34% pay increase. Finally, Omni Hotels knows it has the odds stacked against it in the fight to attract travelers. But it’s confident it can compete against global hotel giants, reports Senior Hospitality Editor O’Neill in this week’s Early Check-In column. Hotel giants have argued that smaller players such as Omni, which only has 51 hotels and resorts, can’t compete with their ability to use huge loyalty programs to lure guests. But Omni CEO Kurt Alexander touted the benefits of his company in an interview with Skift. Alexander said Omni is less expensive for hotel owners than bigger brands from a franchise and royalty fee standpoint.  Alexander added he would like to partner more with institutional owners. He said that Omni is flexible on brand standards, which may make it more appealing than large hotel groups that often have an extensive list of requirements. 

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Episode NotesIHG has launched its 19th brand, called Garner, an IHG hotel, as part of its strategy to target mid-market travelers, reports Senior Hospitality Editor Sean O’Neill.O’Neill writes Garner aims to be more affordable for travelers than IHG’s other brands targeting this segment. The company expects to open more than 1,000 hotels under the Garner brand over the next two decades. O’Neill adds that until the launch of Garner, IHG didn’t have a brand that fit this price range. An added attraction: Garner will allow guests to bring pets into their rooms. Next, Booking Holdings is proposing concessions for an issue threatening European Commission regulatory approval of its deal to acquire flight tech company eTraveli Group. Booking’s plan is to show hotels from competitors when travelers book a flight, reports Executive Editor Dennis Schaal.  Schaal writes European regulators are balking at approving the roughly $2 billion deal because they think it would strengthen Booking’s leading hotel business on the continent. As for a potential solution, Booking could use sister brand Kayak to offer choices from rival online travel agencies or the hotels themselves. Schaal adds such a scenario could also bolster the company’s already market-shaping hotels business. The European Commission is expected to make a decision on the deal by August 30. Finally, the proposed merger of JetBlue Airways and Spirit Airlines has been one of travel’s most watched developments over the past year. Associate Editor Rashaad Jorden provides a timeline of the planned deal poised to shake up the U.S. airline industry. Jorden lists the major twists and turns in the proposed JetBlue-Spirit deal by the month they occurred, which includes Spirit’s initial plans to merge with Frontier Airlines and JetBlue’s repeated attempts to acquire Spirit. The timeline also details the U.S. Department of Justice’s quest to block the JetBlue-Spirit merger, citing concerns the deal would reduce competition and raise airfares. The department’s lawsuit to thwart the proposed merger will go on trial this October. 

Episode NotesAirbnb and Booking.com have delivered strong cash flow over the past year, giving them the flexibility for acquisitions and other transactions, reports Executive Editor Dennis Schaal in his Online Travel Briefing.Schaal looked at the companies’ free cash flow conversion, which measures how efficiently companies convert revenue into free cash flow after interest payments. A key factor in their favor: They are all asset light businesses, meaning they don’t own the hotels or short-term rentals that they offer. The companies’ high levels of free cash flow provides the needed resources for a range of investment, including acquisitions and product development. Next, global luxury travel network Virtuoso has seen a sales boom driven by surging interest in private experiences, writes Travel Experiences Reporter Selene Brophy. Brophy notes that Virtuoso guests are spending between $10,000 to $50,000 per trip on average. Virtuoso’s platform has a network of 20,000 luxury travel advisors and they are seeing growing demand for exclusive experiences, wellness travel and yacht bookings. We end today looking at Saudi Arabia’s big investment in its tourism industry. Associate Editor Rashaad Jorden examines why the kingdom is investing so heavily in the sector using Ask Skift, our artificial intelligence chatbot. Ask Skift provided four reasons why Saudi Arabia is planning to spend more than $1 trillion beefing up its tourism industry over the next decade. That investment is a key part of its strategy to wean away from its heavy reliance on oil revenue. Jordan writes that Saudi tourism officials are heavily targeting Chinese travelers, with the goal of attracting roughly 4 million visitors from the country annually by 2030. Saudi Arabia is also investing heavily in sports tourism, a sector that is expected to be worth more than $3 billion in the country by 2024. Saudi authorities view sports as a key part of its strategy to boost the kingdom’s profile. The country has hosted several major sporting events in recent years, including its first-ever Formula One Grand Prix race in 2021. 

Ask Skift Is the AI Chatbot for the Travel Industry: Ask Skift Your Questions Episode NotesThe Texas state government has filed a lawsuit against Booking Holdings, alleging the company violates state law by not including certain fees when it initially displays room prices, reports Executive Editor Dennis Schaal.Schaal writes the Texas lawsuit comes as the Biden administration and Congress are increasingly taking aim at so-called junk fees, charges that aren’t disclosed to consumers upfront. The lawsuit includes Booking Holdings and its sub-brands, Booking.com and Kayak, and refers to so-called resort fees and other extras.Texas Attorney General Ken Paxton said while announcing the lawsuit that the state had recently sued Hilton and Hyatt for allegedly deceptively displaying their fees. Next, experiences and major tourist attractions have become significantly more expensive in the past four years, writes Travel Experiences Reporter Selene Brophy. Analysis from marketplaces GetYourGuide and TicketLens revealed prices from tours and admissions tickets globally rose on average 18% between June 2019 and June 2023. Charmaine Chua, GetYourGuide’s head of optimization, attributed the jump to factors such as tourism’s rebound and a shift in consumer spending toward experiences. TicketLens found that Turkey recorded the largest price increase for experiences globally, with a 35% jump from 2019. Meanwhile, Miami registered the biggest price hike at 27% for local tourism attractions in the U.S. Finally, major hotels and online travel agencies have benefitted from an enormous surge in travel demand in Asia and Europe in the first half of this year, reports Senior Research Analyst Pranavi Agarwal.Agarwal writes the strength in global demand has now shifted to Europe and Asia. She writes companies initially hurt by their exposure to Asia are now reaping the rewards as its rebound takes hold. Agarwal cites Accor as one example. The France-based hotel company, which derives about a third of its revenue from Asia and nearly half from Europe, saw its revenue jump 40% from last year. 

Ask Skift Is the AI Chatbot for the Travel Industry: Ask Skift Your QuestionsEpisode NotesTourism boards across the U.S. are increasingly supporting measures to get workers back into offices to help boost struggling downtowns, writes Global Tourism Reporter Dawit Habtemariam. Habtemariam notes the U.S. Travel Association strongly backs President Joe Biden’s push to have federal employees spend more time in the office. An executive at the organization said getting federal workers back into the office was critical to the success of U.S. cities. Habtemariam reports cities are losing billions due to workers spending more time working remotely and fewer days in the office.   Tourism bureaus are also taking steps to fill their offices. San Francisco Travel and LA Tourism, among others, have each required employees to head to the office several days a week. LA Tourism CEO Adam Burke said getting people back in office would help increase foot traffic in the city’s downtown. Meanwhile, NYC Tourism+Conventions plans to increase the number of days employees go to the office weekly this fall. Next, Trivago recently brought back commercials featuring ad pitchman, the Trivago Guy. However, it’s uncertain if he’ll be part of the company’s marketing efforts going forward, reports Executive Editor Dennis Schaal. Schaal writes that the Trivago Guy — played by Actor Tim Williams — was credited with helping make the company somewhat of a household name in North America. Trivago CEO Johannes Thomas said the company is trying to boost growth and taking a more experimental approach to its TV ads to help boost traveler engagement. Finally, the U.S. House of Representatives recently passed its version of a bill reauthorizing funding for the Federal Aviation Administration. Reporter Kristin Majcher explains five key issues the bill addresses.  Majcher writes, beyond funding the agency for five more years, the reauthorization is important because it includes provisions about consumer protections and airline safety. She adds that some of those provisions have proven controversial. In particular, the Regional Airline Association has supported a proposal to increase the maximum age for pilots from 65 to 67 while the Air Lines Pilots Association has come out against it. Majcher reports the Senate needs to finalize its own version of the bill and both houses need to work out any differences by September 30. If the House and Senate miss the deadline, Congress would have to approve an extension. 

Ask Skift Is the AI Chatbot for the Travel Industry: Ask Skift Your QuestionsEpisode NotesU.S. tourism businesses were heavily dependent on Chinese visitors pre-pandemic and now are looking elsewhere to replace billions in tourist spending, writes Global Tourism Reporter Dawit Habtemariam. Brand USA CEO Chris Thompson said Chinese visitors spent $35 billion in 2019, making them the largest tourism market in the U.S. in terms of spend.  So where are U.S. travel brands turning? NYC Tourism + Conventions CEO Fred Dixon cited Brazil as one market the city is focusing on. Meanwhile, LA Tourism CEO Adam Burke said his city is ramping up its marketing efforts in countries such as Australia, New Zealand and the United Kingdom.  Next, tour operator group TUI has posted its first post-pandemic net profit. However, the company’s overall performance for the year is expected to be impacted by extreme weather throughout Europe, writes Travel Experiences Reporter Selene Brophy.  TUI Group CEO Sebastian Ebel said on Wednesday that surging travel demand in its third quarter pushed its booking performance to a 6% gain. He added the company had seen a drop in bookings after recent wildfires in Greece’s Rhodes Island. Brophy reports an estimated 8,000 TUI customers were impacted by weather and wildlife disruptions. Although Ebel outlined several ways extreme weather could impact the travel industry and the company, including destinations with more moderate climates likely seeing a boom in popularity.    TUI Group reported revenue of $5.8 billion during the third quarter, a 19% jump from last year. Finally, luxury travel subscription brand Inspirato has had its share of struggles recently, including mounting losses and another round of layoffs. But the company does see a path back to profitability, writes Short-Term Rentals Reporter Srividya Kalyanaraman. Inspirato CEO Brent Handler announced a partnership on Wednesday with investment firm Capital One Ventures, in which Capital One would provide Inspirato a $25 million convertible note. In addition, Inspirato has reduced supply, removing 60 residences from its portfolio due to non-renewal and/or early terminations of leases. Handler expressed confidence the company’s efforts to cut costs will be successful and said it can be profitable even without growth.