The Tactical Traveler
A BUSINESS-TRAVEL BRIEFING
FOR FEBRUARY 6 TO 13, 2003
BY JOE BRANCATELLI
This week: The plunging dollar seriously erodes our buying power in Europe and Japan; Frontier simplifies its fare structure; the politics of airport gates; Red Lion Hotels is growing again out West; how alternate carriers are lapping the Big Six; the Bush Administration wants Amtrak to drop long-haul trains; and much more.
COUNTER INTELLIGENCE: The Dollar's Slide Pinches Our Wallets
The U.S. dollar is in free fall on major world currency markets and that is pinching our wallets when we travel to Europe and Japan. Last year at this time, for example, the Euro was worth only about 90 cents. But this week, the Euro traded as high as $1.09 and closed Thursday (February 6) at $1.08. What does that mean in practical terms? A 25-Euro lunch in Paris or Rome or Frankfurt cost just $22.50 last February, but the same meal now costs $27. In Britain, the dollar was buying 70 pence last year, but just 60 pence on Thursday. That means that a £10 cab ride in London, which cost $14.10 last year, now runs $16.40. Meanwhile, in Japan, the dollar was buying 133 yen last year and just 119 yen now.
CYBERTRAVELER: The Politics of Airport Gates
One of the amazing side notes of the decline and fall of the Big Six carriers is the fact that they are collapsing even while they maintain a virtual stranglehold on the nation's largest airports. For a stark example of how the majors have monopolized major airports, check this story about the gate situation at Boston/Logan from the Boston Globe. Low-fare airlines are clamoring for entry at Boston/Logan, yet the major carriers hoard the available gates by using them inefficiently or not at all. And since you pay for the airports with your tax dollars and user fees, it's your money that the Big Six are burning as they attempt to prop up their own failed business models.
IN THE LOBBY: Red Lion Seems More Like a Phoenix
The Red Lion Hotel brand, slated for extinction when it was owned by Hilton Hotel Corporation, is acting like a phoenix these days. Now owned by the low-profit West Coast Hotels group, Red Lion will be back up to 66 locations in 13 Western states by the end of the month. How? West Coast is converting 22 of its properties to the Red Lion flag. But be warned: Most of the hotels you knew as Red Lions a decade ago are now actually Doubletree hotels. So you'll have to decide all over again whether you're a Red Lion fan. ... Omni Hotels says it now offers free Wi-Fi wireless Internet access at its hotels in Los Angeles, Chicago, New York and Las Colinas, Texas, and will offer the service at all properties by the end of the year. Best Western is creating an upscale division in Europe called Best Western Premier. Forty-five existing hotels in the system already qualify as Premier and Best Western says there will be as many as 150 locations by the end of the year. ... Radisson SAS, which is actually a part of SAS Scandinavian Airlines, has taken over management of the former Hyatt hotels in Jeddah and Riyadh, Saudi Arabia. ... The Mosaic Hotel, a 49-room boutique property, has opened in Beverly Hills. Introductory rates are as low as $169 a night.
EXECUTIVE SUMMARY: Snapshots From the Revolution
If you have any doubts that travelers are increasingly fleeing the cupidity and arrogance of the Big Six carriers and flying more and paying more on alternate carriers, consider these little snapshots from the revolution. In January, Continental, which boasts that it is the best-managed major carrier, says its capacity increased 2.1 percent compared to January, 2002, but its passenger traffic fell .9 percent. On the other hand, AirTran said its January capacity increased 39.8 percent, but its traffic increased by 41 percent. Or, how about this: Southwest now charges a higher average fare than both United and American airlines. At Southwest, the systemwide yield--in other words, the average fare the carrier actually charges it passengers--is 12.25 cents per mile. By comparison, American only manages to charge passengers 11.72 cents per mile and United is only charging 10.29 cents per mile. And as it began to ramp up to compete with Song, Delta's new low-fare operation, JetBlue reports this tidbit from its skirmish with Delta Express, Delta's current low-fare failure. On the New York-Fort Lauderdale route, JetBlue claims its average fare is $108 and says Delta Express is managing to charge an average of just $82. Meanwhile, in case you didn't follow the earnings reports, AirTran, JetBlue and Southwest all reported a profit in 2002. Each one of the Big Six--American, United, Delta, Continental, Northwest and US Airways--reported large 2002 losses.
ON THE FLY: Business-Travel News You Need to Know
Frontier Airlines overhauled its fare structure this week and eliminated advance-purchase, Saturday-stay and roundtrip requirements. The all-coach carrier based in Denver now offers just six walk-up fares on all its domestic jet flights. Depending on the route, prices to/from Frontier's Denver hub are capped at either $399 or $499. The airline says the structure effectively reduces its highest fares by as much as 45 percent and cuts the lowest available business fare by as much as 77 percent. Two examples: Dallas/Fort Worth-Denver fares now range from $89 to $399 one-way and Denver-New York/LaGuardia fares now range from $129 to $499. As part of the move, Frontier also eliminated its short-lived fuel surcharge. ... Delta Air Lines has joined the rest of the Big Six and lowered the limit on free checked luggage to 50 pounds. In typical Delta fashion, however, the airline has a unique and costly twist. Bags over 50 pounds now cost $25 more, but Delta will also charge $80 more for bags that weigh between 71 and 100 pounds. ... The Transportation Department's fiscal 2004 budget envisions Amtrak dropping its worst-performing long-distance routes. "For several trains, it would literally be cheaper for Amtrak to buy each passenger a plane ticket to the next destination" than continue funding train service, according to a budget summary.
This column originally appeared at JoeSentMe.com.
Copyright © 1993-2004 by Joe Brancatelli. All rights reserved.