At the risk of saying I told you so to Qantas and other airlines who recently announced they were cutting back on premium products...ah, why bother stating the obvious?
IATA's recently published Premium Traffic Monitor shows that "The number of first and business class airline passengers in March increased 10.8 percent worldwide, marking a fourth consecutive month of growth and the largest year-over-year increase measured for any month in at least two years. As business confidence and world trade have turned up sharply business travelers have returned," IATA said, while noting particularly strong growth in Asia.
Sure, there still are some trouble spots (indeed I am talking about Europe - can you say "Greeced" lightning?) and the Kangaroo route from Australia to the UK is not faring all that well, but for the most part premium demand is up. Way up.
And yes, these numbers are coming off of an abysmal 2 year stretch where no one seemed to be turning left when boarding an aircraft.
But who are we to believe - a few airlines, corporate buyers and travel agencies saying the days of premium travel are dead? Or numbers coming from the association made up of actual airlines themselves which would seem to indicate otherwise?
In previous editions of the Cafe I've lamented what I saw was the too-quick reaction by Qantas and Air New Zealand to start ripping out premium products as they said the demand for them was plummeting. If IATA's numbers are to be believed, the only thing plummeting will be those airlines' profits if they continue to pull back on premium services.
To be fair to Air New Zealand, their trimming of premium products is mainly across the Tasman. Depending on how Trans-Tasman flights are classified by IATA the numbers could be confusing as "Within SW Pacific" shows a negative March '10 vs. '09 but a higher YTD '10 vs. '09; yet "SW Pacific" is showing huge growth of premium traffic - 19.9% growth in March '10 vs. '09 and 26.7% growth year-over-year.
The Barista, is, of course, happy to pour his words in to a double espresso and swallow them quickly if I end up being wrong...but for now I'll stick with the "I told you so" to the airlines who were throwing out the premium passenger with the gently scented bubble bath water. Not sure which airline will offer on-board bubble baths first but I wouldn't put it past a few of them....
(Thanks to IATA: www.iata.org/economics and for the full report go to http://www.iata.org/whatwedo/Documents/economics/Premium-Monitor-Mar10.pdf)
Thursday, May 27, 2010
Thursday, May 20, 2010
Cheap, Cheap, Cheap...Are Those Birds? Low-Cost Carrier Pigeons Apparently...
The price war has begun (again) apparently. Low cost carriers are offering one-way fares between Australian cities for less money than it costs to take a return train ride from the Sydney CBD to the airport. $28 one-way? Now that truly is an "air bus."
Of course, the question will be how long will these fares be sustainable? And for whom? Sure, there will only be a limited number of seats at this price on any given aircraft, but if that seat could have been sold for $280 rather than $28 you have to believe this type of pricing is, well, for the birds.
The Australian earlier this week ran a story which highlighted that "domestic airlines are in the midst of a discounting war, with fares down almost 30 per cent since September and likely to keep falling over winter. Cheap ticket prices fell 18 per cent in April, with fares now the lowest since federal transport records began in 1992." Since 1992? Wow, that IS cheap.
But is this good for the industry? Grabbing market share is one thing, but doing it at record low prices can't really be a long-term strategy. Especially in an industry as volatile as the airline industry, what with them being just another ash cloud/animal flu/oil price spike away from turning profit into huge losses.
As a consumer, I usually have little sympathy for airlines losing money if I'm flying on the cheap. However I also want to be sure that airlines will indeed keep flying - after all, I live on an island that's thousands of miles from anywhere.
And although I've not checked lately, my wings don't seem to be growing all that quickly, so airline revenue managers, please stop the madness and get pricing back to sustainable levels? Your future - and mine - depends on it.
EXTRA SHOT FOR THE DAY
Can someone please explain to me the logic behind hotels that have those inane glass half-screens in the bathtub? You know the ones - too small to sufficiently stop your floor from becoming a mini-Sydney Harbour, but big enough to make you nearly throw your back out trying to reach the taps? Not to mention that the side of you under the water is nice and warm and the side facing out is sub-arctic.
I used to think this was a British thing as I remember seeing my first instance of this useless device in a tiny Victorian B&B some years ago. I put that off to it just being an old hotel, but it seems that the Union Jack in the corner of the Aussie flag isn't the only tie to the old mother country. I've stayed in 5 straight hotels in the past 2 months that all had these useless excuses for shower containment.
Makes me want to take a page out of the best travel movie of all time (that would be Planes, Trains and Automobiles) and start selling shower curtain rings. I would like to think I have 5 immediate customers....
Of course, the question will be how long will these fares be sustainable? And for whom? Sure, there will only be a limited number of seats at this price on any given aircraft, but if that seat could have been sold for $280 rather than $28 you have to believe this type of pricing is, well, for the birds.
The Australian earlier this week ran a story which highlighted that "domestic airlines are in the midst of a discounting war, with fares down almost 30 per cent since September and likely to keep falling over winter. Cheap ticket prices fell 18 per cent in April, with fares now the lowest since federal transport records began in 1992." Since 1992? Wow, that IS cheap.
But is this good for the industry? Grabbing market share is one thing, but doing it at record low prices can't really be a long-term strategy. Especially in an industry as volatile as the airline industry, what with them being just another ash cloud/animal flu/oil price spike away from turning profit into huge losses.
As a consumer, I usually have little sympathy for airlines losing money if I'm flying on the cheap. However I also want to be sure that airlines will indeed keep flying - after all, I live on an island that's thousands of miles from anywhere.
And although I've not checked lately, my wings don't seem to be growing all that quickly, so airline revenue managers, please stop the madness and get pricing back to sustainable levels? Your future - and mine - depends on it.
EXTRA SHOT FOR THE DAY
Can someone please explain to me the logic behind hotels that have those inane glass half-screens in the bathtub? You know the ones - too small to sufficiently stop your floor from becoming a mini-Sydney Harbour, but big enough to make you nearly throw your back out trying to reach the taps? Not to mention that the side of you under the water is nice and warm and the side facing out is sub-arctic.
I used to think this was a British thing as I remember seeing my first instance of this useless device in a tiny Victorian B&B some years ago. I put that off to it just being an old hotel, but it seems that the Union Jack in the corner of the Aussie flag isn't the only tie to the old mother country. I've stayed in 5 straight hotels in the past 2 months that all had these useless excuses for shower containment.
Makes me want to take a page out of the best travel movie of all time (that would be Planes, Trains and Automobiles) and start selling shower curtain rings. I would like to think I have 5 immediate customers....
Tuesday, May 11, 2010
The Future of Travel is Here...and it's Quite Futuristic
Last week I had the privilege to attend one of the largest corporate travel conferences in Australia, BTTB 2010 in Sydney. An annual confab bringing together buyers and suppliers of corporate travel services, BTTB has always tried to find topics to put on their agenda that are interesting and provocative.
One of this year's more interesting items on the program was called the "Mobile Shoot-Out" where vendors of travel technology including Amadeus, Sabre, Serko and ConTgo did a few nifty tricks with various new products, but one of them stood out as quite an interesting take on where corporate travel is going.
The guys at Serko have come up with an application which allows a corporation to be able to triangulate (using location-based mobile technology) a traveller's location pretty much down to the square foot he or she is standing on, and view that location on a map. The theory is that the corporation's security manager or HR director or whoever is in charge of traveller safety would then be able to evaluate whether or not the traveller may be in a so-called "hot zone" and then send messages to the mobile device of the traveller. This would all be under the premise that in an emergency the company could provide the traveller assistance and/or directions out of the hot zone.
Hello, George Orwell, you say? Perhaps, but I'm not as much concerned about the technology (which is quite cool in and of itself.) It's more about what it will be like for corporate travellers in the future with respect to what they will have to give up in exchange for what their company will provide them.
Are you comfortable with not only providing your mobile number to your company and your Travel Management Company but also now perhaps your technology provider? This would of course be in exchange for the peace of mind that come a terrorist attack or another ash cloud descending on your location, that your mobile will swiftly and surely start buzzing with useful information on how to deal with the situation. A good trade, having someone literally watching over you while you travel in exchange for them knowing exactly where you are standing/sleeping/sitting at all times?
The other aspect of this technology, of course, is although it may allow certain company execs to sleep better at night believing that the company's "duty of care" is now fully in place, how long will it be that these "find me and help me" services will be enough? Will the expectation - whether from the travellers or perhaps even the law in some countries - go even higher to ensure traveller safety? Will it still be enough to know where travellers are and send them messages to help out, or will companies now be expected to have their own SWAT-like search-and-rescue teams on standby to physically swoop in and get the traveller out of harms way?
Sounds a bit far-fetched, but I'm sure the Orwellians out there will say it's only a matter of time. Regardless, it's obvious that the future of traveller location and safety services is literally just around the corner...or is that danger lurking perhaps? Can anyone see around corners yet?
EXTRA SHOT FOR THE DAY
One other interesting "trend" heard at BTTB last week was hoteliers "being forced" to pass along credit card surcharges to companies wishing to pay for their hotel bills with plastic. Will we hear no end to the seemingly endless belief across so many companies today that no one is allowed to make money anymore except themselves?
If you want to accept credit cards, you need to pay for their services. It's secure, it's convenient, and it's what business travellers want to use. I don't carry $200 in cash around with me to pay for my room, and I don't want your hotel chain's direct-connect payment plan, as I am very happy with my current payment plan. That would be a credit card, by the way. You want to surcharge me? Fine, I will go to another hotel that doesn't.
Sounds like hoteliers are taking a page out of the airline book and try to fawn off costs of doing business as "extraneous services charges" or some other spun terminology. If you want to sell your product in a market-type environment (read: GDS) so you can attract the most potential buyers to your door, then you need to allow the market to make money off that. If you don't want to pay credit card companies to manage and process your cash flow for you, then don't take the cards. Simple. Then those hotels that do take cards and don't pass along the costs to me will get my business. Also simple.
What's next - a water surcharge for flushing the toilet? No wait, strike that - I should probably keep my mouth shut...don't want to give anyone any ideas....
One of this year's more interesting items on the program was called the "Mobile Shoot-Out" where vendors of travel technology including Amadeus, Sabre, Serko and ConTgo did a few nifty tricks with various new products, but one of them stood out as quite an interesting take on where corporate travel is going.
The guys at Serko have come up with an application which allows a corporation to be able to triangulate (using location-based mobile technology) a traveller's location pretty much down to the square foot he or she is standing on, and view that location on a map. The theory is that the corporation's security manager or HR director or whoever is in charge of traveller safety would then be able to evaluate whether or not the traveller may be in a so-called "hot zone" and then send messages to the mobile device of the traveller. This would all be under the premise that in an emergency the company could provide the traveller assistance and/or directions out of the hot zone.
Hello, George Orwell, you say? Perhaps, but I'm not as much concerned about the technology (which is quite cool in and of itself.) It's more about what it will be like for corporate travellers in the future with respect to what they will have to give up in exchange for what their company will provide them.
Are you comfortable with not only providing your mobile number to your company and your Travel Management Company but also now perhaps your technology provider? This would of course be in exchange for the peace of mind that come a terrorist attack or another ash cloud descending on your location, that your mobile will swiftly and surely start buzzing with useful information on how to deal with the situation. A good trade, having someone literally watching over you while you travel in exchange for them knowing exactly where you are standing/sleeping/sitting at all times?
The other aspect of this technology, of course, is although it may allow certain company execs to sleep better at night believing that the company's "duty of care" is now fully in place, how long will it be that these "find me and help me" services will be enough? Will the expectation - whether from the travellers or perhaps even the law in some countries - go even higher to ensure traveller safety? Will it still be enough to know where travellers are and send them messages to help out, or will companies now be expected to have their own SWAT-like search-and-rescue teams on standby to physically swoop in and get the traveller out of harms way?
Sounds a bit far-fetched, but I'm sure the Orwellians out there will say it's only a matter of time. Regardless, it's obvious that the future of traveller location and safety services is literally just around the corner...or is that danger lurking perhaps? Can anyone see around corners yet?
EXTRA SHOT FOR THE DAY
One other interesting "trend" heard at BTTB last week was hoteliers "being forced" to pass along credit card surcharges to companies wishing to pay for their hotel bills with plastic. Will we hear no end to the seemingly endless belief across so many companies today that no one is allowed to make money anymore except themselves?
If you want to accept credit cards, you need to pay for their services. It's secure, it's convenient, and it's what business travellers want to use. I don't carry $200 in cash around with me to pay for my room, and I don't want your hotel chain's direct-connect payment plan, as I am very happy with my current payment plan. That would be a credit card, by the way. You want to surcharge me? Fine, I will go to another hotel that doesn't.
Sounds like hoteliers are taking a page out of the airline book and try to fawn off costs of doing business as "extraneous services charges" or some other spun terminology. If you want to sell your product in a market-type environment (read: GDS) so you can attract the most potential buyers to your door, then you need to allow the market to make money off that. If you don't want to pay credit card companies to manage and process your cash flow for you, then don't take the cards. Simple. Then those hotels that do take cards and don't pass along the costs to me will get my business. Also simple.
What's next - a water surcharge for flushing the toilet? No wait, strike that - I should probably keep my mouth shut...don't want to give anyone any ideas....
Thursday, May 6, 2010
A Cafe Holiday
Dear Cafe Guests, the Barista apologises for the short notice but this Friday's Cafe will be delayed a week. Next week I'll be summarising some of the latest and greatest (and not so greatest) trends in corporate travel I picked up at this week's Australia BTTB Conference in Sydney. However, 2 days at the conference and a 3-year old at home with the flu makes the Barista a busy man today! Thanks for visiting and see you next week.
Subscribe to:
Posts (Atom)