Skift Daily Travel Briefing

Episode NotesAirbnb is on the cusp of an artificial intelligence-driven revolution, with the technology poised to radically transform the company’s operations, it says. So what might change at the short-term rental giant by next year? CEO Brian Chesky explains Airbnb’s plans in an interview with Skift founder and CEO Rafat Ali.Despite recently unveiling a series of launches yesterday at its annual May product update event, Ali writes Airbnb hasn’t yet announced exactly how it plans to use AI. But Chesky said the technology will be the driving force behind a totally new Airbnb, adding the company would use AI to rebuild its app. Chesky also said that Airbnb would eventually have more AI-augmented customer service.  Next, cruise line Lindblad Expeditions saw its occupancy rate soar in the first quarter — in large part due to its savvy marketing strategy, writes Global Tourism Reporter Dawit Habtemariam. Lindblad’s occupancy rate hit 81 percent during the quarter, a 15-percentage point jump from a year ago. Company executives expect the figure to continue its rise this year but not fully recover to pre-Covid levels in 2023. Habtemariam cites Lindblad’s substantial investment in digital marketing as a factor in the company attracting more first-time guests. Lindblad’s marketing in the past primarily included brochures and direct mail to prospective guests. Lindblad generated roughly $143 million in revenue in the first quarter, a significant year-over-year jump. The company did record a net loss of about $400,000 during the period. Finally, the Lufthansa Group, Europe’s largest network carrier, is optimistic about a banner 2023. The company expects to achieve record summer revenue this year, reports Edward Russell, editor of Airline Weekly, a Skift publication. Russell writes travel demand remains robust, Lufthansa expects to get a boost from the rise in premium leisure travel. Although the airline posted a more than $500 million net loss during the first quarter, CEO Carsten Spohr said it’s on the verge of its strongest summer in terms of passenger revenue. Russell writes Lufthansa’s bumper summer forecast isn’t solely the result of torrid demand. Decreased aircraft availability will result in carriers flying less, helping increase airfares. 

Episode NotesInternational travelers will soon no longer need proof of vaccination to enter the U.S. The White House announced this week the vaccine requirement for inbound international flyers will end on May 11, writes Global Tourism Reporter Dawit Habtemariam. The Biden administration cited the decrease in Covid cases and hospitalizations as a reason for its decision. Habtemariam notes the White House had implemented the vaccine requirements to help slow the spread of the virus. U.S. travel authorities applauded the government’s removal of the vaccine mandate, a move that could lead to an increase in international visitors.Next, VisitBritain is the latest tourism board to jump on the artificial intelligence bandwagon. The organization has created a game using AI voice technology for a campaign targeting American tourists, reports Contributor Samantha Shankman. VisitBritain is using the rapidly emerging technology to play around with regional UK accents as part of its campaign. Prospective visitors are invited to try those accents, which AI scores, and share the results on social media. A VisitBritain executive said the organization created AI speech technology that can judge Americans’ impressions of UK accents. Shankman writes VisitBritain believes the content can push test takers toward booking travel to the UK. Skift examined how generative AI — technology that includes the creation of images, audio and video — could fundamentally alter travel marketing in a 2023 Megatrend. We end today with a look at Qantas Airways new CEO, Vanessa Hudson. She faces the difficult task of living up to the legacy established by her predecessor, reports Edward Russell, editor of Airline Weekly, a Skift publication. Hudson, who will take over from longtime CEO Alan Joyce in November, will inherit an airline that has emerged stronger out of the pandemic. Russell writes Joyce turned Qantas into a profitable aviation powerhouse during his 15 years at the helm. The company posted a more than $1 billion operating profit during the first six months of its 2023 fiscal year. Qantas expects a profit for the full fiscal year ending in June.Russell adds that Hudson, Qantas’ current chief financial officer, will need to manage the airline’s international partnerships. Its joint venture with American Airlines is one of them, which Russell writes grew in importance during the pandemic. 

EPISODE NOTESMarriott International has announced plans to disclose its resort fees in its total prices by May 15. That’s the result of a settlement with the State of Pennsylvania requiring the company to include those charges in upfront total prices, reports Senior Hospitality Editor Sean O’Neill.  Many travelers express outrage when hotels such as Marriott charge them resort fees at the lobby front desk that are separate from the room rate. Travelers sometimes consider them gotcha fees.O’Neill writes Marriott is one of the first major hotel groups to make the change, which relates to extra fees for services offered during a stay. Online tool ResortFeeChecker revealed many travel companies are far from transparent regarding the those additional fees for services or amenities at some properties. President Joe Biden called out companies earlier this year for not disclosing what he described as frustrating charges. The White House said more than a third of hotel guests claim to have paid resort fees.   Marriott has reportedly made at least $206 million off the practice from self-managed resorts since 2012. Next, Norwegian Cruise Line's strong onboard passenger spending in the first quarter demonstrates that the pent-up desire to cruise that people had during the pandemic hasn't dissipated one bit, reports Global Tourism Reporter Dawit Habtemariam.Although the cruise line lost $159 million during the first quarter, executives took heart in the fact that gross onboard revenue per passenger cruise day was nearly 30 percent higher than its comparable period in 2019.Norwegian ties that progress to focus on attracting more higher-spending guests, enhancing its bundled offering and increased guest touch points, starting at the time of booking to capture more revenue and prepayment prior to cabin selection.Finally, Tel Aviv, Israel-based property management company Guesty bought vacation rental tech platform StaySense, writes Short-Term Rental Reporter Srividya Kalyanaraman.Kalyanaraman reports Guesty will use StaySense’s technology to facilitate direct bookings as well as provide marketing tools for its customers. Guesty’s acquisition of StaySense, a Nashville-based company that provides marketing and tech solutions to vacation rental managers, is its seventh overall. Although Guesty and StaySense didn’t disclose details of the deal, StaySense CEO David Angotti confirmed it was financed by the $170 million it raised last August. 

Episode NotesHyatt wants to improve its position in the luxury sector. The company announced plans on Friday to acquire UK boutique hotel booking site Mr & Mrs Smith for about $66 million, reports Corporate Travel Editor Matthew Parsons. Parsons writes the deal could double the number of boutique and luxury properties that Hyatt offers. In addition, Hyatt Chief Commercial Officer Mark Vondrasek said the company would be able to introduce its World of Hyatt loyalty program to a wider audience. The acquisition includes properties in more than 20 countries where Hyatt lacks a boutique presence, including Fiji, Croatia and Iceland. Hyatt said the transaction is anticipated to close in the second quarter. The company also plans to add direct booking access to properties in Mr & Mrs Smith’s platform through Hyatt’s website and mobile app.  Next, Bentley and Fabergé have long been renowned in the world of luxury. And those two iconic brands are branching out into selling travel to help attract new customers, writes Travel Experiences Reporter Selene Brophy.Bentley recently launched a set of curated trips named Extraordinary Journeys, which Brophy notes are designed around once-in-a lifetime road trips. Customers can choose among three destinations, namely Scandinavia, New Mexico and the United Kingdom. The UK trips provide guests private entry to Bentley’s factory as well as access to its headquarters.  Likewise, the jewelry house Fabergé is teaming up with the Regent Seven Seas Cruises to launch a new ship, the Seven Seas Grandeur. It is expected to set sail in November 2023. Regent Seven Seven President Andrea DeMarco said the collaboration would provide guests access to Fabergé experiences and experts. Finally, Visa and Mastercard are reporting a massive jump in cross-border spendingcompared to pre-Covid levels, reports Corporate Travel Editor Parsons. Mastercard said cross-border volumes in April more than 170 percent of 2019 levels. Meanwhile, Visa reported that travel to Latin America and the Caribbean has more than surpassed pre-Covid levels in the first three months of this year. Parson writes cross-border payments are transactions where the person paying and the person receiving the money are in different countries. He adds they’re a good indicator of travel and entertainment spend. Visa said during its recent second quarter earnings call that international travel from the U.S. is at 150 percent of 2019 level. However, travel to the U.S. is less than pre-Covid levels, in part due to the strong U.S. dollar. 

Episode NotesAmerican Airlines has seen the rise in blended travel upend its business. Not only are travelers who combine work and leisure trips driving changes in its strategy, the segment is also emerging as one of the company’s most lucrative areas, reports Edward Russell, editor of Airline Weekly, a Skift publication. American said during its first-quarter earnings call on Thursday that this mashup of blended travel represents 35 percent of the company’s bookings. Russell adds those same travelers are also behind the significant growth in its loyalty program, AAdvantage. In addition, Russell notes blended travelers’ demand for more control over their trips drove American in part to implement distributing its products to travel agencies through the so-called New Distribution Capability, a technology that gives airlines more power over their content.American generated roughly $12 billion in revenue during the first quarter, a 37 percent year-over-year jump.  We turn next to Fiji’s new tourism campaign. The South Pacific nation is showcasing happiness as a way of life for its citizens instead of a trait reserved for tourists, reports Asia Editor Peden Doma Bhutia.Bhutia writes Fiji leverages a happiness vibe to pay tribute to its citizens, culture and natural environment in its “Where Happiness Comes Naturally” advertising campaign. Tourism Fiji’s outgoing Chief Marketing Officer Emma Campbell said happiness lives within Fiji’s people, regardless of whether tourists are around. That tone represents a shift from a previous Fiji tourism campaign, which Butia writes was heavily criticized for perpetuating stereotypes about the country being a happy brown paradise. That marketing effort featured Australian Rebel Wilson. Campbell said the “Where Happiness Come Naturally” campaign felt like a natural evolution to tell Fiji’s story from the perspective of its citizens. She added that resilience and a strong sense of community helped Fiji survive the pandemic. Finally, Wyndham executives don’t see the ongoing U.S. banking crisis damaging its hotel pipeline, reports Senior Hospitality Editor Sean O’Neill.Wyndham, the world’s largest hotel franchisor, said during an earnings call on Thursday that it wasn’t worried about March’s collapse of Silicon Valley Bank, which contributed to a tightening of lending in the U.S. Chief Financial Officer Michele Allen said the company is optimistic about its 2023 financing situation, adding the company believes there’s a significant amount of capital still available. Wyndham executives also argued many of its franchised hotels have long-standing relationships with regional banks. Wyndham generated roughly $67 million of net income during the first quarter. The company also saw its global revenue per available room, a key industry metric, rise 11 percent compared to 2019 levels.

Episode NotesHilton appears prepared to launch a new apartment hotel brand, just the latest expansion into more affordable offerings. This decision comes amid significant levels of activity in both the extended-stay and long-stay hotel spaces due to a shortage in the U.S. supply, reports Senior Hospitality Editor Sean O’Neill. Chris Nassetta, Hilton’s president and CEO, told analysts that the new brand will be like a hybrid between an apartment efficiency and a hotel. He wants Hilton to build “hundreds and hundreds” of these hotels, which will have an average length of stay of probably 20 to 30 days on average.Next, experts forecast that 2026 will bring the likely return to pre-pandemic levels of travel spending. But some markets seem to be recovering faster than others, with India, Britain, the U.S., and Australia showing particular signs of growth, writes Skift reporter Andres Buenahora. Buenahora breaks down varying instances of recovery in different regions, citing insights from industry experts and data points from The Global Business Travel Association regarding travel spending across global markets.Finally, some major cities are placing more value on tourism as in-person office vacancies continue to be replaced by the hybrid work model. For instance, New York is poised to benefit financially over the next decade from rising tourism even if its commercial districts are slower to recover, writes Global Tourism Reporter Dawit Habtemariam. Habtemariam covers how the mayors of many cities are urging larger employers to establish the necessary mandates to require their employees to return to the office. As remote work continues to extend its value to companies post-pandemic, the worker spending gap appears more and more prevalent in impacting city economies. So cities may turn to their destination marketing organizations to boost tourism to compensate.

Episode NotesPremier Inn is looking to expand its brand through mergers and acquisitions. Specifically gearing towards growth in the German market, the hotel chain provides competition to rival brands such as Ibis, B&B, Motel One and Best Western, writes Senior Hospitality Editor Sean O’Neill. O’Neill examines Premier’s acquisition of six hotels in Germany totaling about 900 rooms — each of the properties are being converted into the Premier Inn brand. This transaction means Premier, already the UK’s largest hotel chain, would offer more than 50 hotels and around 9,000 rooms in Germany.O’Neill also relays vital information from conversations with research analysts and travel executives about Premier Inn’s strategy to scale operations and seek market share gains. Next, Sonder received an official delisting notice from Nasdaq due to recent financial struggles. Short-Term Rentals Reporter Srividya Kalyanaraman breaks down the situation and writes that Sonder has the next 180 calendar days to regain compliance with Nasdaq’s minimum required share price.Kalyanaraman describes the alternate option is Sonder can elect to transfer to the Nasdaq Capital Market as a means of receiving an additional 180-day grace period. Kalyanaraman also notes how the potential delisting of Sonder could be a sign of concern for other publicly traded companies struggling to hit financial benchmarks. Finally, Saudi Arabia is planning to continue its trend of major hotel development, which currently leads the Middle East and Africa for the largest amount of hotel construction. Standing at 42,033 hotel rooms, Saudi Arabia is poised to create the necessary infrastructure to meet the region’s tourism goals, reports Asia Editor Peden Doma Bhutia. Doma Bhutia also writes in second place in the Middle East and Africa region in terms of hotel construction is the United Arab Emirates with 22,324 rooms, as per March 2023 pipeline data report from STR. 

Episode NotesCompanies delivering walking tours of Manhattan often deliver stereotypical tours with no originality. So Travel Experiences Reporter Selene Brophy writes about an initiative in New York that helps entrepreneurs develop compelling and original walking tour experiences.  Brophy reports the Alliance for Downtown New York is in the final stages of its Walking Tour Incubator Grant Program. Five walking tour businesses have been chosen to receive grants of up to $12,500. Brophy adds the money for creating more diverse walking tours of Lower Manhattan is set to launch in the summer of 2024. Nikki Padilla, one of the program’s mentors, said diversity in product is important, noting that many tours are mirror images of each other. Padilla added that travelers want to be immersed in different facets of communities, acknowledging the tour guide is often the only meaningful interaction a visitor might have with a destination’s history or culture. Meanwhile, Stephen Oddo, another of the program’s mentors, said the challenge for the entrepreneurs is to find unique ways to reach prospective customers about different facets of New York’s attractions. Next, India’s aviation sector is poised for a major boom. But Asia Editor Peden Doma Bhutia reports it needs an entirely new policy in order to fulfill its enormous potential.  As India’s aviation sector is among the fastest growing in the world, aviation consultancy and research firm CAPA India projects the country might need the infrastructure to be able to welcome 1 billion passengers annually within two decades. The firm has outlined a plan for a new civil aviation policy. India is expected to be the world’s third-largest aviation market by 2025, according to the International Air Transport Association. CAPA India also predicted the aviation industry could inject $1 trillion yearly into the Indian economy by 2043. Finally, Colombia’s flag airline Avianca has unveiled a subscription program just for business travelers, reports Corporate Travel Editor Matthew Parsons.Avianca has partnered with Caravelo, a company that creates subscription platforms for airlines. Parsons notes the new program, Avianca Access, provides corporate travelers opportunities for potentially cheaper trips without their employers having to commit to an annual quota. Caravelo CEO Inaki Uriz said the program is aimed at small and medium-sized enterprises. The program is operational, but Parsons noted it’s expected to be officially launched later this year. 

Episode NotesThe largest public hotel companies will report their financial performance for the first quarter in the next several weeks. So what themes will investment bank analysts be looking for? Senior Hospitality Editor Sean O’Neill explains in this week’s Early-Check In column.O’Neill writes one possibility is an equilibrium where supply and demand are just right, meaning hotel companies are nicely profitable. O’Neill adds that investment bank analysts seem to believe that the hotel industry will dodge a rescission or it will be so shallow that pent-up demand for travel will compensate for it. O’Neill also notes a bear market could emerge if businesses or consumers curtail travel spending due to financial concerns. He adds the recent banking crisis in the U.S. might reduce bank lending to businesses, which could cool business and leisure travel demand. Next, the short-term rental market is continuing to grow in 2023, with demand outpacing supply, writes Short-Term Rental Reporter Srividya Kalyanaraman.Average daily rates globally jumped a little more than 3 percent in the first quarter of 2023 from last year, according to vacation rental data company Key Data. In addition, occupancy rates climbed 17 percent worldwide from the same period in 2022. Meanwhile, Kalyanaraman notes that supply, which is measured by the number of available listings, has shrunk. She added that 22 percent of vacation rentals are listed across multiple top online travel agencies.Finally, Mexico is building six hotels alongside the Tren Maya, a controversial railway that aims to provide access to the Yucatan Peninsula’s most popular tourist attractions. But travel executives are uncertain if the railway will boost tourism, reports Contributor Paula Krizanovic.Krizanovic writes that although Mexican authorities have said the project should be completed by December, some figures in the country’s tourism industry consider that timeframe unlikely. However, Paulina Roura, risk consulting partner of consulting firm BDO Mexico, said the Tren Maya would help spark more investment in the Yucatan’s tourism infrastructure. Hyatt has already announced plans to open 5,000 more rooms in two destinations along Mexico’s Caribbean coast. 

Episode NotesEnvironmental issues have seemingly become more important to travelers in recent years. However, travel companies worldwide have struggled to make their services greener. With that in mind, Associate Editor Rashaad Jorden looks at Skift’s coverage of environmental issues over several years ahead of Earth Dayon Saturday.Jorden notes tourism’s expanding carbon footprint is heightening the need to make travel more sustainable. Transport-related emissions from international tourism are projected to grow 25 percent by 2030 unless urgent action is taken. He reports the hotel industry has made progress in going greener, with a series of small steps, such as using artificial grass to conserve water and removing single-use plastic bottles from guest bathrooms.However, the aviation industry has had little success in reducing its carbon footprint. A 2021 Skift Research report revealed the majority of airlines failed to reach their environmental efficiency targets. And while some airline executives support expanding carbon offsets to reduce emissions, Skift reported in 2022 that flyers were generally unwilling to pay extra to offset emissions from their flights. Next, luxury hotel operator Six Senses is planning to add clubs as a new product alongside its hotels and resorts. Under a new brand called Six Senses Place, the company is also looking to create a membership service providing travelers access to those luxury- and wellness-themed clubs, reports Asia Editor Peden Doma Bhutia.Six Senses CEO Neil Jacobs said the luxury brand aims to open its first club next year, which will likely be at London’s Whiteley Hotel. Bhutia writes that the clubs are unlikely to operate as standalone entities but will usually come attached to Six Senses hotels. Jacobs told her that the Six Senses Place brand would offer restaurants, bars, and wellness offerings.  Finally, Sedona, Arizona’s tourism bureau recently ended its partnership with the city. Why? The local government wouldn’t permit the bureau to restart destination marketing, writes Global Tourism Reporter Dawit Habtemariam. Tension began two years ago when the Sedona City Council changed its contract with the tourism bureau, preventing it from spending money on destination marketing. Sedona saw a tourism surge coming out of the pandemic, with the city attracting 3.7 million visitors in 2021. Yet many residents were unhappy with how tourism had remade their town. Habtemariam writes some local hotel owners and tourism businesses are unhappy with the city council’s decision. These local travel businesses said the post-pandemic boom in travel demand is waning and that Sedona is now facing fierce competition with other destinations. Sedona’s tourism chief Michelle Conway said she expects to find money from elsewhere to run tourism promotion campaigns.