The Tactical Traveler By Joe Brancatelli
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Business Travel Briefing for Feb. 23-Mar. 9, 2017
The briefing in brief: Norwegian Air adds 10 U.S. routes with a $65 bait-and-switch fare. The five cities with the most hotels in the development pipeline. Hainan Airlines adds two new routes to China from LAX. Trump Administration now slow-walking revised travel ban. And more.
Norwegian Shows It's Not Just Legacy Carriers That Bait-and-Switch
With all three U.S. legacy carriers now selling Basic Economy and engaged in nasty upselling, it's sometimes hard to remember that the low-fare/high-fee airlines first perfected the technique. Case in point: Norwegian Air, the fast-growing carrier that recently won a years-long Transportation Department battle to create an Irish subsidiary to serve U.S. destinations. The first fruits of the new arrangement were revealed this morning (February 23) with as audacious a bait-and-switch pitch as you've ever seen. On its new nonstop flights to Europe from three secondary East Coast airports--T.F. Green in Providence; Hartford; and Newburgh/Stewart in New York's Hudson Valley--Norwegian trumpeted an eye-popping introductory fare: $65 one-way. Not $65 each way, mind you, but $65 one-way. The difference: While Norwegian did have a very limited smattering of $65 fares on the 10 new routes to destinations such as Edinburgh, Dublin and Belfast, there were no similar fares on the return. If you want to fly home from Europe, the lowest price you can find is $226.80 one-way. And that is before all of Norwegian's ups and extras: checked bags; seat assignments; fast track ground service; and snacks, meals and beverages. Conversely, Norwegian offered European travelers one-way fares of 69 euros or 69 British pounds to the United States. But Europeans couldn't get return fares at those prices, either. Their return flights also cost north of 200 pounds or euros. The new routes will operate with all-coach Boeing 737MAX aircraft stuffed with 189 seats. Service will run several days a week on each route beginning as early as June 15.
Where the New Hotels Are: New York, Houston, Dallas, Nashville and Los Angeles
The frantic pace of U.S. hotel building is most pronounced in five metropolitan markets, according to the Lodging Econometrics (LE) consulting firm. The most active market is New York, where 192 projects accounting for more than 30,000 new rooms are in the pipeline. Despite an existing oversupply of rooms and a sagging energy market, Houston is second with 169 new projects and 18,000 new rooms. Then comes Dallas (140/17,000), Nashville (121/14,800) and Los Angeles (111/18,700). As if to punctuate the LE report, Marriott has opened its fifth Four Points in Manhattan. This one is located at 446 10th Avenue, just a few steps from the Javits Convention Center.
Hyatt has opened two new Hyatt Regency hotels: a 391-room property in Xiamen, China, and a 257-room branch in the Andares mixed-use development in Guadalajara, Mexico.
Hotel Phillips, a mainstay in Kansas City lodging, has joined the Hilton Curio collection of independent hotels. The 216-room hotel in the Power & Light District has recently been renovated.
The Duke is the new name of the terraced, three-winged hotel in Newport Beach long known as the Fairmont. The 444-room property, about a mile from John Wayne/Orange County Airport, will receive a renovation and emerge as a Renaissance hotel. It's already bookable via Marriott.com.
Hainan Adds Two More LAX Nonstop Routes to Inland Cities in China
The speed with which new nonstop routes are being added between the United States and China can't be overstated. As the outbound travel market in China is booming, Chinese airlines especially are trying to capitalize on the growth. They are not limiting themselves to flights to and from Beijing and Shanghai, either. One notable example: Hainan Airlines, the well-regarded, privately owned Chinese carrier. Hainan opened a nonstop last year between Los Angeles and Changsha, capital of Hunan Province. Next month, it adds two more nonstops to the "inland" Chinese empire. Effective March 16, it will launch two weekly flights between LAX and Chengdu, the capital of Sichuan Province. A week later, it'll add twice-weekly flights to Chongqing, the massive city with a metropolitan area population of about 30 million. That'll give Hainan Airlines an even dozen North American routes from places like Boston, Chicago, Seattle, San Jose, Toronto and even Calgary. "It's odd that huge cities like Chengdu and Chongqing are called 'secondary' markets, but that shows you how large the China market is," says Joel Chusid, Hainan's executive director for the United States. "There's room and demand for many more nonstops" between the two countries. In fact, Hainan also has rights to fly from New York/Kennedy to both Chengdu and Chongqing. If Hainan can secure JFK slots, it hopes to launch those flights later this year.
Trump Administration Suddenly Slow-Walking Its Travel Ban
President Donald Trump unveiled his controversial Executive Order on travel and immigration after just seven days in office. It was dead within days after multiple courts stopped its implementation. Yet despite a clear path to fix the legal deficiencies--don't stop travel by green-card holders or detain people with visas already in the air--and President Trump's repeated insistence that a new Executive Order was imminent, the White House took no action again this week. In fact, Trump Administration spokesman Sean Spicer said today (February 23) that a revised Executive Order now won't come until next week. Why the slow-walking of something President Trump initially claimed was an immediate security need? Good question. One potential answer: The original Executive Order was a stunt aimed at name-checking a campaign promise rather than plugging a hole in the nation's travel policy. Another possibility: Someone has convinced the President--who, if nothing else, is a canny businessman--that his first travel ban has seriously impacted legitimate inbound travel. Airline executives say passenger traffic to the United States is down, interest in coming has fallen and surveys show visitors are souring on the idea of U.S. holidays.
Business Travel News You Need to Know
Alitalia cancelled more than 60 percent of its flights today as unions and management are once again at odds over cost-cutting measures at the chronically unprofitable carrier. Expect more trouble and more strikes in the weeks ahead.
Paris may be the world's most popular tourism attraction, but two years of terror attacks have taken their toll. Visitor numbers fell by 1.5 million last year, the number of nights spent in hotels by foreigners fell by nearly 11 percent and travel income plunged by 1.3 billion euros. Tourism from the United States was down only by 100,000 people last year, but travel from China fell by 268,000 and Japanese visitor numbers dropped by 225,000.
St. Lucia is raising its departure tax on April 1. Tickets issued before March 15 are not affected, but others will pay an ECD$68 per person departure tax and an ECD$35 airport development fee. The current departure tax is about ECD$30.
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