Skift Daily Travel Briefing

European parliament group proposes regulations for short-term rentals to improve housing affordability. Venice implements a fee for day trippers to mitigate the impact of tourism. Florence raises tourist tax on rentals. Global corporations increase investments in tourism industry but still below pre-pandemic levels. Dubai experiences tourism rebound with Russian travelers.

Episode NotesCalifornia is looking to crack down on so-called junk fees at hotel and short-term rentals. The state’s legislators have passed two bills that could impact how California’s hotels and short-term rentals inform consumers about those fees, reports Senior Hospitality Editor Sean O’Neill.   Senate Bill 537 would prohibit businesses that sell lodging for up to 30 days in California from displaying room rates that don’t include all fees or charges, except for government-mandated taxes. Senate Bill 478 would block California businesses from advertising prices without including mandatory fees or charges, with some exceptions. The bills are on the desk of Governor Gavin Newsom, who has yet to take a position on them. While the California Hotel & Lodging Association has expressed support for the final version of the bills, Expedia Group and Airbnb both raised concerns about it. Next, Florida has seen an enormous boom in vacation rentals in recent years. But the state’s short-term rental industry is facing a profit squeeze with soaring labor and construction costs, writes Short-Term Rental Reporter Srividya Kalyanaraman.Kalyanaraman writes that while Florida has always been a formidable destination for vacation rentals, it’s becoming more unaffordable for visitors and residents. She adds the main factor behind Florida’s soaring inflation is the high cost of housing. The surging cost of housing and growing economic divide between out-of-state investors and Florida residents has been blamed for pricing locals out. Kalyanaraman cited Miami as one Florida city that’s seen an enormous demand for short-term rentals. However, an executive at real estate developer Newgard Development Group said despite the demand, it’s getting more expensive to build properties with lenders tightening big construction loans. In addition, the state has experienced a shortage of labor needed to maintain and service those rentals.Finally, despite the recent boom in air travel in the U.S., the country’s aviation industry is still suffering from a pilot shortage. Associate Editor Rashaad Jorden turns to Ask Skift, our artificial intelligence chatbot, for answers why.Jorden notes concerns about pilot shortages are nothing new, with thousands of U.S. pilots approaching mandatory retirement age. But major carriers made the problem worse by encouraging staff to retire early or accept voluntary leave to help avoid massive layoffs during the pandemic. Officials at budget carrier Allegiant Air said U.S. airlines are short 17,000 pilots this year. That number could double by 2032.  In addition, Edward Russell, editor of Skift publication Airline Weekly, reported regional airlines have been the hardest hit by pilot shortage. Crews are leaving regional carriers for jobs at major airlines faster than the regionals have been able to replace the departed staff. 

Episode NotesMaui faces a long road to a full tourism recovery after wildfires decimated the western part of the island last month. Travelers have largely been slow to return to Maui out of sensitivity to local residents, writes Global Tourism Reporter Dawit Habtemariam.Although Hawaii tourism officials have said most of Maui is ready to welcome tourists, Habtemariam reports some travel businesses believe it’s too soon for visitors to come back. Alaska Air Group Chief Financial Officer Shane Tackett said a subset of travelers aren’t eager to vacation in a destination still suffering. In addition, airlines are continuing to cut flights to Maui in response to the wildfires. Habtemariam adds tour operators have been cautious about taking guests back to Maui. G Adventures is considering making a return to the island in October or November. Its Vice President of Product Yves Marceau said it doesn’t want travelers to feel like they’re going back too early. Next, Marriott International is making progress in reducing its carbon footprint ahead of its 2030 target. But the company’s emissions data reveals its greenhouse gas emissions increased last year, reports Head of Research Wouter Geerts. Geerts writes Marriott has some of the best tracking of emissions of any hotel company. That reporting showed the company’s scope 1 and 2 emissions rose by 2.5% in 2022 compared to 2021. Scope 1 and 2 emissions are all emissions from activities under operational control for hotel companies. Geerts notes Marriott is still on track to reach its 2030 emissions goal. But he adds the company needs a 5.4% annual decline in emissions to hit its target. Finally, Spirit Airlines stunned investors and even its competitors with its forecast of a steep third-quarter operating loss, reports Jay Shabat, senior analyst for Skift publication Airline Weekly. Spirit anticipates its third-quarter operating margin to be between negative 15-16%. The company had forecast in August the figure would be roughly negative 7%. Shabat notes that fuel prices have increased sharply in recent weeks while demand has softened. Spirit also expects total revenue for the third quarter to decrease from what was previously forecast. The poor forecast follows a rough first half for Spirit. Only Hawaiian Airlines performed worse in terms of operating margin in the first half of this year among major U.S. carriers. 

Airbnb's New York City listings decreased by 77% due to new registration rules, potentially benefitting hotels. Tour operators continue trips in Morocco despite a recent earthquake. Also discussed: the impact of air traffic control shortage on airlines.

Episode NotesThe rise of artificial intelligence has been a major topic of discussion in the travel industry over the past year. So as the theme of this month’s Skift Global Forum is Connection in the Age of AI, what do major travel executives think about booming technology? Travel Technology Reporter Justin Dawes provides some of their opinions about it.Dawes cites Airbnb’s Brian Chesky and Uber’s Dara Khosrowshahi as two CEOs vocal about the impact of AI on their companies. Chesky said AI would be the driving force between a vastly different Airbnb. Meanwhile, Khosrowshahi said AI could improve user personalization by tracking preferences, such as preferred types of cars. Dawes adds that executives around travel have spoken about how advancements in AI could change travel search and booking. Priceline and Booking.com have already released Google-powered tools on their respective apps. Next, the United Arab Emirates has established a gaming authority to regulate its nascent gambling industry, writes Middle East Reporter Josh Corder. Corder notes the General Commercial Gaming Regulatory Authority will set guidelines for future casinos as well as a potential “Arabian Strip” gambling zone. The country’s media has reported the agency would look to help unlock gaming’s economic potential. The United Arab Emirates could earn roughly $6.6 billion in revenue yearly from gaming, according to Bloomberg Intelligence. Finally, tour operators are increasingly turning to African adventures to attract young travelers, writes Travel Experiences Reporter Selene Brophy.Brophy cites Contiki as one company that has significantly boosted its Africa offerings. Contiki, which organizes trips geared largely towards 18-35 year olds, has seen bookings for its Africa tours jump 57% from 2019 levels. Kyle Junkuhn, Contiki’s Operations Lead for Africa, said its itinerary design has been a major factor in its growth. Its guests can bungee jump and zip wire, among other activities, at Zimbabwe’s Victoria Falls. 

Episode NotesHyatt has seen signs that more workers in big cities are returning to their offices. That could result in the company eventually seeing more business travelers, reports Senior Hospitality Editor Sean O’Neill. CEO Mark Hoplamazian said at a recent conference that some of its New York hotels are seeing increased levels of local traffic, a sign of more people back in their offices. Hoplamazian added the increased traffic doesn’t necessarily mean pre-Covid levels of business travel. But he said it’s an indication of more activity in offices that will eventually boost the sector’s recovery.Hoplamazian also expressed confidence that business travel would rebound fully. Next, budget carriers Allegiant Air and Frontier Airlines are poised to profit significantlyif U.S. authorities approve JetBlue Airways’ proposed merger with Spirit Airlines, reports Edward Russell, editor of Skift publication Airline Weekly.  JetBlue said on Monday that Allegiant would receive Spirit’s assets at Boston Logan and Newark Airports under divestiture agreements reached by JetBlue. In addition, Frontier would gain Spirit’s assets at New York’s LaGuardia Airport. Russell notes both Allegiant and Frontier could expand their operations at the above-mentioned airports. However, the agreements between JetBlue and Allegiant and Frontier are subject to the JetBlue-Spirit merger being approved by the U.S. government. The U.S. Justice Department has sued to block the deal on the basis of concerns about competition. Finally, business travel has made significant progress in its recovery, but will spending in the sector fully rebound? Associate Editor Rashaad Jorden turns to Ask Skift, our artificial intelligence chatbot, for answers.Jordan reports that the state of business travel’s recovery varies across the world. Corporate travel volumes were reported as of August to be at least 30% below 2019 levels globally. While a majority of India-based businesses expect business travel to increase this year, executives at several U.S. and European airlines have said in recent months the sector’s rebound has plateaued. But the Global Business Travel Association projected last month that corporate travel spending would surpass pre-Covid levels faster than expected. The group anticipates spending will hit $1.52 trillion in 2024, two years of a previous prediction. 

Episode NotesTravel companies have just finished reporting their second quarter results. So what did we learn about the state of the industry? Senior Research Analyst Seth Borko outlines four major trends Skift Research discovered after studying more than 200 publicly traded companies.  Borko writes that second quarter revenue growth was still far higher than other sectors – but that it’s beginning to slow down to more normal rates. At the same time, he notes that profits for the travel industry hit a post-Covid peak. In addition, among five travel sectors Skift Research studied, travel tech posted the fastest revenue growth while accommodations had the highest profit margins. Next, Hilton unveiled plans on Thursday to install Tesla electric vehicle chargers at 2,000 of its North American hotels, reported Senior Hospitality Editor Sean O’Neill. O’Neill notes that Hilton is installing up to 20,000 Tesla Universal Wall Connectors. They’re designed to charge all North American electric vehicles, not just Tesla-branded ones. Installation starts next year and once the process is complete, Hilton will own more electric vehicle chargers than any other U.S.-based hotel group. Hilton has had electric vehicle chargers at its hotels since 2015. O’Neill writes the company’s website has seen a significant rise in people seeking out the chargers in its search tool this year. Finally, President Joe Biden nominated airline industry veteran Michael Whitaker to lead the Federal Aviation Administration, reports Edward Russell, editor of Skift publication Airline Weekly.Russell writes Whitaker checks many of the boxes the Biden administration was looking for. Whitaker had previously served as a senior executive at United Airlines in addition to working as a deputy administrator at the FAA. Russell notes Whitaker, if confirmed, would face several major challenges running the FAA. The agency’s five-year funding bill is currently stalled in Congress and it also faces an air traffic controller shortage that won’t be solved soon, among other hurdles.The nomination comes more than five months following the withdrawal of President Biden’s first nominee, Denver Airport CEO Phil Washington, amid questions over his aviation experience. 

Episode NotesTrivago has struggled in recent years, with its shares currently trading for a little more than $1 per share. So the company is returning to its old playbook by looking to significantly beef up advertising, reports Executive Editor Dennis Schaal in his weekly column.  Schaal writes Trivago’s new leadership plans on intensifying its brand advertising, including on TV,by the end of the year. Schaal reports Trivago had built its brand as the place to find hotel deals through its seemingly ubiquitous TV ads. The company spent an average of 82% of annual revenue on advertising from 2015-2019. But the former CEO, who left in May, downplayed that strategy. Next, Capital One will open a branded lounge at Washington-Dulles Airport on Thursday, marking the latest investment by a credit card company in the space, reports Edward Russell, editor of Skift publication Airline Weekly.  Russell writes the new lounge is a part of Capital One’s multi-year strategy to target high spenders. The company is investing in a larger network, with plans to open lounges at both the Denver and Las Vegas airports. Capital One had opened its first branded lounge at the Dallas-Fort Worth Airport in 2021. Russell adds the lounge at Dulles is part of a larger ecosystem at Capital One. The company runs Capital One Travel, a travel booking portal, powered by online travel agency Hopper. Finally, a Mastercard executive highlighted six trends shaping Indian travel at the recent B20 Summit, reports Asia Editor Peden Doma Bhutia.   Mukul Sukhani, the company’s senior vice president of business development, said India is becoming a bigger player in the global travel industry — especially as the world’s largest outbound tourism market. He added that Indians are increasingly eager to visit countries with easier visa policies, citing Thailand as an example. Sukhani also said that more Indian travelers are looking to combine business and leisure trips. 

New York City's host registration system for short-term rentals is delayed. The future of tourism post-pandemic will be discussed at Skift Global Forum. Challenges of attracting tourists to hidden gems and the absence of Chinese tourists will be addressed by industry executives.

Episode NotesWashington, D.C. will spend roughly $20 million in an upcoming campaign to help boost the city’s lagging tourism recovery, writes Global Tourism Reporter Dawit Habtemariam. The global campaign — called “There’s Only One DC” — will launch November 1. Habtemariam reports the campaign will support influencer collaborations, as well as advertising on social media and television. Destination DC, the city’s destination marketing organization, hopes the funding injection will help it in its efforts to attract international travelers.Washington, D.C. welcomed 1.2 million foreign tourists last year, which was just 60% of its pre-Covid figure. Habtemariam cited the absence of Chinese tourists, the city’s largest visitor market pre-pandemic, as one reason for Washington, D.C.’s international slump. Next, U.S. hotel group Sonesta is facing a lawsuit about how it displays resort fees on its website and app, reports Senior Hospitality Editor Sean O’Neill.The suit alleges that Soneta made tens of millions annually since at least 2017 by not disclosing upfront its mandatory resort and destination fees at some of its properties. O’Neill writes Sonesta isn’t alone in not disclosing those fees upfront. He adds all of the major hotel groups and many smaller hotels brands have engaged in the practice of junk fees in recent decades. Lauren Wolfe, a counsel from consumer advocacy group Travelers United, said lawsuits against more companies regarding so-called junk fees are coming. Travelers United filed the class-action suit against Sonesta. Finally, Airbnb and New York City have often had a rocky relationship, once marked by lawsuits and numerous disputes. Associate Editor Rashaad Jorden provides a timeline documenting the tension between the city and the short-term rental giant over the past 10 years. Jorden lists the major twists and turns in New York City’s and Airbnb’s relationship using Ask Skift, our artificial intelligence chatbot, and additional reporting. Airbnb has sued the city twice — including this June over measures the company called a “de facto ban” against short-term rentals. That recent lawsuit was dismissed by a judge. In addition, Airbnb is staring at the prospect of a steep reduction in New York City listings starting September 5. That’s when city authorities said they would start enforcing its host registration law for short-term rentals.