Skift Daily Travel Briefing

Episode NotesTravelers might be uncertain if Sonder is a short-term rental operator like Airbnb or a hotel operator. Now, the company is launching its first hotel collection, writes Executive Editor Dennis Schaal. Schaal reports that Powered by Sonder includes 23 Sonder-operated properties in 13 markets. The company said those hotels are different from other hotels and multi-unit apartments in that they’re boutique hotel-oriented. In addition, Schaal notes the Powered by Sonder properties have their own design elements and features, such as onsite food and drinking facilities. Patrick Mitchell, Sonder’s vice president of marketing and distribution, said the boutique hotel experience at those Powered by Sonder properties appeal to millennials and Gen Z travelers. Next, the lifestyle hospitality brand Ennismore has launched a loyalty program that features no need to earn points as well as no tiers to climb. It’s an attempt to distinguish itself from complex loyalty programs run by rivals, writes Travel Experiences Reporter Selene Brophy.Ennismore is calling the concept “Dis-loyalty,” and the company’s Chief Brand Officer Martina Luger said it’s meant to encourage exploration of new venues and experiences. Members can start using their benefits, which include half off all new hotel openings, as soon as they sign up for the program, which launches July 27 with a monthly subscription fee of $18 Ennismore has 15 openings planned for the next 12 months. Brophy also reports that members qualify for discounts across the 75 participating Ennismore hotels and 10 of its participating brands. Senior Hospitality Editor Sean O’Neill said the lack of a tier-based model may signal a broader upheaval in hotel loyalty programs. Finally, India is poised to become a bigger force in the global travel industry in years to come. How big in fact? The country’s outbound tourism market is expected to reach a little more than $44 billion by 2032, writes Middle East and Asia Reporter Amrita Ghosh.Ghosh notes a recent report outlined the sector’s projected growth. The report also featured recommendations for growing outbound tourism from India, including issuing tax rebates and collaborating with destinations and airlines. International leisure flight bookings from India have jumped by 40% for trips between June and August compared to the same time in 2022, according to travel software company RateGain. 

Episode NotesHotel companies will report earnings over the next several weeks. So what will industry insiders be paying close attention to? Senior Hospitality Editor Sean O’Neill explains in this week’s Early Check-In column. O’Neill writes investors will look closely to estimate when sector revenues may return to pre-pandemic levels. The American Hotel and Lodging Association doesn’t expect U.S. hotels to hit their pre-Covid sales figures until 2024. O’Neill adds that analysts are eager to find out if hotel companies are still considering expansion. One analyst said the pace of hotel supply growth is noticeably below the historical average. Next, the U.S. travel industry is continuing to make enormous progress in its rebound from the pandemic as Americans travel in huge numbers this summer. Yet, the industry still hasn’t made a complete recovery. Associate Editor Rashaad Jorden delves into the reasons why with answers provided by Ask Skift, our artificial intelligence chatbot, and further research. Jorden cites the decrease in visitors from China, a major market for the U.S. tourism industry, as one factor in the U.S.’ inability to make full recovery. Although U.S. tourism boards have unveiled plans to increase marketing efforts in China, their efforts are complicated by the inability to restore flight schedules between the two countries to pre-pandemic levels.In addition, U.S. Travel Association CEO Roger Dow said a full complete travel company depends on reopening international markets. The U.S. welcomed 51 million overseas visitors last year, about 64% of its 2019 mark. Dow’s organization projected international inbound travel to the U.S. would hit three-quarters of its pre-Covid volume this year. Finally, Icelandair rode a surge in transatlantic travel to record profits in the second quarter. However, the company might see a drop in travel demand in Europe later this year, writes Edward Russell, editor of Airline Weekly, a Skift publication. Icelandair CEO Bogi Nils Bogason said during its earnings call on Friday that economic turbulence across Europe could stunt the company’s revenue growth in the second half of 2023. Bogason had acknowledged earlier this year that inflation would impact travel demand. However, Russell notes economic uncertainty hasn’t affected the company’s forecast of a 4-6% operating margin for the year. Icelandair reported a $21 million operating profit in the second quarter, its highest quarterly profit since 2016. The company also generated roughly $414 million worth of revenue during the quarter. 

Ask Skift Is the AI Chatbot for the Travel Industry: Ask Skift Your Questions Episode NotesDestinations across the U.S., Canada and Mexico are ramping up their preparations to welcome soccer’s World Cup in 2026. And they’ll need a substantial influx of money to make hosting the event a success, writes Global Tourism Reporter Dawit Habtemariam. Officials at this week’s Destinations International Annual Convention addressed the challenges of welcoming thousands of visitors for the World Cup. Each of the 11 U.S. host cities is responsible for finding ways to pay for tournament-related expenses. Monica Paul, executive director of the Dallas Sports Commission, said the U.S. federal government doesn’t assume most of the cost of major international sporting events, unlike in other countries. Visit Kansas City CEO Kathy Nelson acknowledged the difficulties of securing the funding for World Cup-related operations. Nelson said the organization has to appease governors from both Kansas and Missouri, adding that it’s the most contentious issue she’s ever experienced. Next, several vacation rental markets that experienced a major post-Covid boom are feeling the effects of oversaturation. That’s causing rental rates to plummet and driving investors to sell their properties, writes Short-Term Rental Reporter Srividya Kalyanaraman. Kalyanaraman cites Palm Springs, California as one destination where the surge of licensed vacation rental properties has helped contribute to falling rental rates. She also notes that a growing number of investors in short-term rental properties are looking to exit the sector. Christopher Ledwidge, executive vice president of wholesale mortgage seller TheLender, said supply for rentals went up, and there was a slight drop in demand. Ledwidge also acknowledged that the cost of operating rentals has increased. Finally, American Airlines has raised its earnings outlook for 2023 after reporting a strong second quarter, writes Reporter Jess Wade.The company now expects to earn between $3 and $3.75 per share, an increase from its previous forecast of between $2.50 and $3.50. American said on Thursday it generated a little more than $14 billion in revenue during the second quarter, its highest-ever quarterly revenue. The company also recorded a $1.4 billion profit that Wade notes was made possible in part by a 35% decline in average jet fuel prices. 

Episode NotesThe travel industry is continuing to make substantial progress in its recovery from the pandemic, but what challenges is it still facing? Skift Research answers that question and more in its newly released State of Travel 2023 report.The report contains more than 250 data slides documenting the current state of travel and trends shaping the industry’s future. For example, Americans are increasingly looking to vacation abroad as international travel has become easier. Skift Research compiled the data appearing in the report through its own research and information from third-party sources. The first section of the report delves into the travel industry’s performance as well as the wider economic landscape while the second is devoted to trends in the industry.  Next, more airlines are offering travelers free Wi-Fi in an attempt to increase sign-ups to their loyalty programs, writes Reporter Ajay Awtaney. Awtaney cites Singapore Airlines and Delta Air Lines as two carriers that offer complimentary Wi-Fi to members of its loyalty programs. A Delta spokesperson said requiring SkyMiles membership for Wi-Fi access enables it to offer travelers a personalized experience different from what other airlines provide. Awtaney adds that some airlines are looking at complimentary Wi-Fi as a reward for being a frequent flier. Emirates earlier this year started offering all of its Skywards members some form of free connectivity, including free app messaging services during their flights. Finally, Mondee has released an updated version of its travel booking platform to include a mobile app and generative artificial intelligence chatbot, writes Travel Technology Reporter Justin Dawes. Dawes reports a chatbot named Abhi can provide users planning trips information such as links for booking flights, hotels, and more. Mondee’s updated booking platform also includes a shopping cart so users can save different aspects of a trip and then purchase them all together. Dawes adds that people from a group planning a trip can see the cart and book everything simultaneously instead of having to book individually. Mondee’s vice chairman Orestes Fintiklis said the update is the culmination of three years of work and a series of acquisitions that took place during the pandemic. The update comes exactly one year after the company went public.

Episode NotesSingapore has overtaken Japan as the country with the world’s most powerful passport while the U.S. dropped two spots in recently released rankings, writes Travel Experiences Reporter Selene Brophy.Citizens of Singapore have visa-free access to 190 destinations, according to the Henley Passport Index. The Index ranks the world’s passports by the number of destinations their holders can travel to without needing a visa. The U.S. passport is now tied with Lithuania for the world’s 8th most powerful, providing visa-free access to 184 destinations. Brophy notes the U.S. has seen a decade-long decline in passport power. A U.S. passport currently provides visa-free access to 12 more destinations than it did in 2013. Meanwhile, a Singaporean passport has obtained visa-free access to 25 more destinations over the past 10 years. Next, United Airlines is moving to take advantage of the Asia-Pacific region’s booming travel demand. The Chicago-based carrier unveiled on Tuesday three new routes serving the region, writes Reporter Jess Wade. Wade reports those routes will include direct flights from San Francisco to Manila as well from Los Angeles to Hong Kong and Tokyo-Narita. United will also become the only U.S. airline to fly nonstop to Manila. A company executive said demand for transpacific travel is as strong, if not stronger, than transatlantic travel. Wade notes that the new routes, which start service in October, will result in United’s transpacific network being 50% larger than all other U.S. airlines combined. Finally, Thailand is increasingly targeting the Middle East as a major source market for tourism. Thai authorities aim to attract 400,000 visitors from the region this year, reports Asia Editor Peden Doma Bhutia in Skift’s Middle East Travel Roundup.Bhutia writes Saudi Arabia is expected to surpass the United Arab Emirates as Thailand’s largest market. Thailand anticipates welcoming 150,000 visitors from Saudi Arabia this year following the resumption of direct flights between the two countries. Saudi Arabia accounted for a little more than a quarter of the visitors from the Middle East to Thailand in the first half of 2023. A Thai official said flight schedules between Thailand and the Middle East are currently 80% of pre-Covid levels. The Thai push to increase visitor numbers from the Middle East comes as Thailand expects tourist numbers from China, a major market for the country, to fall short of projections.  

Ask Skift Is the AI Chatbot for the Travel Industry: Ask Skift Your Questions Episode NotesTwitter has increasingly lost its relevance as a tourism marketing tool in recent months. And now, a growing number of destination marketing organizations are turning to its new rival Threads, writes Global Tourism Reporter Dawit Habtemariam. Habtemariam cites Destination Toronto, Visit Orlando and Visit Utah as some of the destination marketing organizations that have signed up for the direct competitor to Twitter. The brands have been able to grow their audiences quickly on Threads in large part due to the vast reach of Threads’ parent company Meta, which also owns Facebook and Instagram. Paula Port, Destination Toronto’s vice president of marketing, said the organization added most of its 10,000 followers on Threads in a short period of time.   Habtemariam notes some destination marketing organizations haven’t posted anything on Threads yet while others like Visit Orlando have posted regularly. He adds any strategies they might develop for Threads will depend on the platform’s evolution. Next, people who made plans to travel this summer likely noticed the price of hotels and flights increasing. So why has travel gotten more expensive? Associate Editor Rashaad Jorden delves into the reasons why using responses provided by Ask Skift, our artificial intelligence chatbot, and additional research. Jorden found three reasons for why going on trips has gotten pricier — booming travel demand, overall inflation and airlines’ surging operational costs. Italy’s Minister of Enterprises Adolfo Urso recently blasted Italian airlines for raising airfares in response to Italy’s travel boom. Sky-high travel demand is one of the reasons airfares to and across Europe have jumped substantially this summer. Meanwhile, Skift Senior Research Analyst Seth Borko wrote last month that most hotel owners are increasing prices to keep pace with the rising cost of items such as food, fuel and heating. In addition, the aviation industry has been hit by an ongoing pilot shortage and aircraft delivery delays. With travel demand surpassing the supply of seats, airfares have risen. However, the trend is beginning to reverse: U.S. airfares dropped 8% in June from the previous month. Finally, Marriott International announced a licensing deal with MGM Resorts on Monday. Marriott Bonvoy loyalty members will be able to earn points during stays at 17 MGM resorts throughout the U.S. from October, reports Senior Hospitality Editor Sean O’Neill.  Members of both companies’ loyalty programs would be able to exchange MGM Rewards points for Marriott Bonvoy points and vice versa. Bookings at 40,000 of MGM’s Las Vegas rooms will be available through Marriott’s site and app by the end of the year. O’Neill writes Marriott’s move represents its first attempt to make inroads in the gaming resort sector. Las Vegas has long been a difficult market for Marriott to crack because of the dominance of gaming resorts. 

Episode NotesSome hotel executives have expressed concerns about the security and reliability of today’s generative artificial intelligence. However, industry experts are confident that AI will make room pricing more profitable, reports Senior Hospitality Editor Sean O’Neill. Former IHG executive Jeff Edwards said revenue management would be the perfect use for the technology because it is too complex for humans to manage in real-time. Future tech could also enable dynamic pricing for individual rooms. O’Neill notes an extra-spacious room appearing frequently on social media could, in theory, command higher rates. Ryan King, an executive at hotel software services firm Shiji Americas, said revenue management software platforms could assign specific rates for certain rooms based on perceptions of those rooms. O’Neill also writes that today’s revenue management systems often struggle to handle non-room revenue, including spending in hotel restaurants and spas.  We head to San Francisco next. Global Tourism Reporter Dawit Habtemariam writes the city’s struggling downtown is holding back its tourism recovery. Although some neighborhoods outside of San Francisco’s downtown have seen an increase in visitors, Habtemariam reports several tour operators aren’t enthusiastic about taking groups to the center of the city. One tour operator, G Adventures, said it now starts tours in Las Vegas instead of San Francisco and that it has reduced the time its tours spend there. Another tour operator said he avoids group trips to the city. Local officials recently launched a global marketing campaign called “Always San Francisco” in an attempt to counter the city’s negative reputation. San Francisco Travel Association Chief Marketing Officer Lynn Bruni-Perkins said the organization wants to remind the public that the majority of visitors to the city last year said they wanted to return. We finish today in India, the host of the Cricket World Cup this fall. The country is racing to have budget hotels ready for the start of the event in October, writes Middle East and Asia Reporter Amrita Ghosh.The rush to provide cricket fans more budget accommodation options comes as event organizers expect to see an enormous demand for tickets. Budget hotel operator Oyo said it will add 500 hotels in host cities to its portfolio over the next three months. An Oyo executive said the hotels will be located near tournament venues. In addition, India-based online travel company MakeMyTrip has unveiled plans to increase its inventory of homestay properties during the cricket season. 

Episode NotesDelta Air Lines saw a significant revenue bump during the second quarter thanks to a major surge in international travel to Europe and Latin America, reports Edward Russell, editor of Skift publication Airline Weekly. Delta President Glen Hauenstein said the company’s international revenue recorded a 61% increase while domestic revenue was only up 8%. Hauenstein added that Europe and Latin America were Delta’s strongest regions, with Russell noting the return of international travel is a big deal for global airlines. Although some long-haul international markets have recovered from the pandemic, Russell writes Delta doesn’t anticipate a full global recovery in passenger numbers until next year.Meanwhile, Delta expects an 11-14% increase in revenue during the third quarter. Next, the Grand Canyon National Park recently got a major boost in its efforts to go greener. The park secured $27.5 million in federal funding from the National Park Service to electrify its bus shuttles, writes Global Tourism Reporter Dawit Habtemariam.The park will replace its current fleet with 30 new buses as well as install charging infrastructure to support them. Habtemariam reports that national parks have been looking to reduce their carbon footprint. Zion National Park in Utah also received federal funding in recent years to electrify its fleet. Although electric vehicle adoption has been slow in the U.S., the Biden administration has set aside billions to help states and businesses invest in charging stations.Finally, India’s government has changed its tax rules for international tour packages four times in the past five months, reports Asia Editor Peden Doma Bhutia. Bhutia writes the flip-flops have left the industry frustrated and confused, with one executive describing the frequent changes as “amateurish.” Another executive said the policy changes are an inconvenience for companies trying to expand their outbound travel business. However, Bhutia notes industry leaders view the changes as more than an inconvenience — they believe the new taxes could put their companies at a disadvantage. She adds that a special tax on Indian tour operators could encourage travelers to book with international companies. 

Episode NotesExpedia Group terminated its relationship on Wednesday with online travel agency Hopper over practices that Expedia considers anti-consumer, reports Executive Editor Dennis Schaal. Expedia had supplied rival Hopper with hotel and short-term rental inventory for several years. An Expedia spokesperson said the company cut ties with Hopper because it believes Hopper’s content confuses customers, leading them to purchase services they neither need nor completely understand. Schaal notes Expedia also has a competitive motive for terminating the relationship. Hopper is considered the third largest online travel agency in North America behind Expedia and Booking. Schaal writes it’s unclear how Expedia’s decision will impact Hopper. A Hopper spokesperson said Expedia’s move to end their relationship wouldn’t affect Hopper, adding that Expedia was one participant among many in Hopper’s marketplace. Schaal notes that Expedia might be supplying close to half of Hopper’s hotels. Next, three airlines — American Airlines, Lufthansa and EasyJet — and the Federal Aviation Administration are joining Google on an advisory committee to develop a model for reporting the climate impact of flights, reports Executive Editor Schaal in his weekly Online Travel Briefing. Schaal writes the committee could help provide travelers, travel agencies and corporations with more reliable data on flight emissions. Its goals include assessing the impact of non-carbon dioxide flight emissions and comparing emissions from flights to other transportation methods like trains. James Byers, who leads Google’s travel sustainability team, said the three airlines on the committee were selected for their mix — two network carriers and one low-cost carrier — and geographic balance. Finally, a growing number of people in India are making travel plans. And a recent survey reveals many of them are looking to make their trips more affordable, reports Asia Editor Peden Doma Bhutia. Nine in 10 travelers said in a survey by flight search engine Skyscanner that the rising cost of living will influence their plans for 2023. Bhutia writes that might mean choosing cheaper destinations or non-peak travel periods. The Skyscanner report also found that many Indians are willing to increase their travel budget to see live cricket matches. The country hosts the Cricket World Cup later this year. 

Episode NotesDelta Air Lines is launching two routes this fall that will serve Austin. But that expansion may come too late for Delta to overtake the market share of rivals American and Southwest in the city, reports Edward Russell, editor of Skift Airline Weekly.   Delta will connect Austin, one of the U.S.’ fastest-growing cities, to Las Vegas and Orlando daily beginning on October 9. Russell notes those routes follow frequency additions on seven existing Delta routes from Austin. The Atlanta-based carrier will operate up to 39 daily departures from Austin by August, a jump from 31 a day in May.  However, Russell asks if Delta’s new service to Austin is a case of too little, too late. Delta trails both Southwest and American by double-digit percentage points in terms of market share in Austin. Russell adds that Delta is a long way from matching and setting itself apart from Southwest and American’s offerings in the city. American will offer close to double the number of seats from Austin this year as it did in 2019. Next, Sojern, a business-to-business marketing platform for travel brands, is expanding into hotel tech via its newest acquisition. Travel Technology Reporter Justin Dawes explains what Sojern is looking to accomplish. Sojern announced on Tuesday it acquired VenueLytics, a company that provides guest management and communications software for independent hotels. Dawes reports the tech from VenueLytics will power the new Sojern Guest Experience Solutions business. In addition, the new technology coming on board includes an artificial intelligence chatbot that can automatically send pre-stay greetings as well as automate guest interactions. Dawes notes desk staff at hotels should be freed up to perform more complicated duties. Sojern Chief Solutions Officer Kurt Weinsheimer said the company has seen hotels reduce front desk calls by up to 70% by implementing an AI-powered concierge. Finally, Middle Eastern carriers are playing a leading role in the aviation industry’s global recovery, reports Asia Editor Peden Doma Bhutia in Skift’s Middle East Travel Roundup. Airlines in the region saw traffic in May reach 17% above 2019 levels, according to a report by the International Air Transport Association. Middle Eastern carriers also saw a 31% traffic increase in May compared to the same month last year. Bhutia adds international aviation traffic in May hit 96% of pre-pandemic levels.