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A BRIEFING FOR OCTOBER 15 TO 29, 2009
By Joe Brancatelli
· Why You May Be Changing Hotels Next Year
· United Now Gives Unlimited Upgrades to a Few
· Lufthansa Takes Another Run at In-Flight Internet
· More Hotels? Of Course. You Know the Story.
· FAA Whacks United, US Air With Big Safety Fines
· Hilton Opens 2,000 New Rooms in Orlando
· Mokulele Gives Up the Ghost in Hawaii
Why You May Be Changing Hotels Next Year
Hotels and corporate buyers are deep in negotiations over the 2010 rates business travelers will pay. And guess who has the pricing hammer? With hotel occupancy falling and more and more hotels opening every day (see below), corporate buyers are driving incredibly hard bargains. So hard, in fact, that some hotels are letting long-term customers walk away. "What I'm finding, as usual, is that a lot of ego is involved," the buyer for a Fortune 1000 company told me this week. "I can get the price I want, but I often have to get the price from a different chain. Then I find out the chain I just left gave the deal I wanted to another buyer. They can't be seen making big concessions to existing clients, but they'll do the same deal with another account if it is seen as 'winning new business.' It's silly, but that's how it is." And what do the corporate buyers who negotiate where you stay want from the hotels? The sales manager for a big-city luxury property told me recently that a big corporate client paid $249 a night in 2008. They negotiated it down to $199 this year. The corporate buyer's demand for next year? "They wanted to pay $169 a night and wanted the rate guaranteed for two years. I had to let them walk," the sales manager said. So don't be surprised if your company tells you that you're changing hotels next year. It's all part of the price war between hotels and corporate buyers.
Want an Upgrade on United? They're Unlimited for the Chosen Few
Just weeks away from a new partnership with Continental Airlines as part of the Star Alliance, United Airlines is bringing its Mileage Plus program in line with Continental's OnePass plan. Beginning in the second quarter next year, United will kill its 500-mile upgrade certificates. The new upgrade regimen is somewhat simple: unlimited domestic upgrades based on your elite status in Mileage Plus. Naturally, Global Services and 1K Mileage Plus members get first dibs. They'll be automatically upgraded at the time of booking when seats are deemed available and can call the earliest (up to 120 hours before flight time) to score what's left. All other United Mileage Plus elite get the crumbs. According to United, the "domestic" upgrades include Hawaii flights but exclude the airline's three-class p.s. service between New York/Kennedy, San Francisco and Los Angeles. You can find the details of the new upgrade program here. … American AAdvantage members take note: Your chances for a freebie to Puerto Rico will get better. The carrier resumes daily flights between Washington/Dulles and San Juan on November 19.
Lufthansa Makes Another Run at In-Flight Internet
Lufthansa was almost alone in mourning the loss of Boeing's Connexion in-flight Internet service, which ended in 2006 after $1 billion or more in losses. And it's been searching for a replacement ever since. It may have found one. The German carrier says it will begin using a new service from Panasonic in mid-2010. Unlike Aircell, which uses a ground-to-air system, Panasonic uses a satellite-based service. It's more expensive to install, maintain and use, but it's the only way to do it over oceans and Lufthansa hopes to re-install what it calls FlyNet on the vast majority of its international fleet. Pricing and timing have not been announced, but if Aircell's experience with the 500 or so domestic jets it has wired is any guide, Panasonic and Lufthansa will face the same problem Boeing faced earlier in the decade: Everyone wants in-flight Internet, but no one seems to want to pay for it. … British Airways launched its second all-business-class daily flight on the New York/Kennedy-Shannon-London/City route this week, then promptly shut it down. The Airbus A318 used on the second flight was involved in a bird strike and is currently out of service. So for now, it's back to one a day between LCY and Kennedy.
More Hotels? Of Course. You Know the Story.
Look, you know the story: Hotels are planned a couple of years before they actually open, so all the new properties started during the boom times are coming on-line now, in the midst of one of the worst travel slumps in modern history. So let's just get through these new openings without any further chatter. … In New York, a 122-room Hotel Indigo in the Chelsea neighborhood, which is now lousy with limited-service properties from the big chains. … In Hamburg, Germany, a 179-room Holiday Inn Express located in the city's former tax office. … In Bogota, Colombia, a 239-room Marriott. … In Bangalore, India, a 292-room Starwood Luxury Collection property called the ITC Royal Gardenia. … Hilton HHonors members take note: Your chance for a free room in Orlando has gotten substantially better. Hilton has opened three new hotels in the area: a pair of 1,000-room Hiltons and a 497-room Waldorf Astoria.
Business-Travel News You Need to Know
The Federal Aviation Administration has fined United Airlines and US Airways a total of $9.2 million for safety-related violations. United was fined $3.8 million for operating a Boeing 737 on more than 200 flights with towels, instead of protective caps, covering an oil sump pump compartment inside an engine. US Airways was fined $5.4 million for operating eight aircraft on 1,647 flights even though the planes were not property inspected. … Say goodbye to Mokulele, an inter-island Hawaiian carrier mostly owned by Republic, which also owns Frontier Airlines, Midwest Airlines and a slew of regional airlines. Republic is essentially handing over its service to go!, an inter-island carrier owned by Mesa Airlines. Republic and Mesa are positioning the deal as a "joint venture," but the effective result is the end of Mokulele flights in Hawaii. … Most legacy carriers raised fares by as much as $16 roundtrip this week. Southwest Airlines raised some of its fares by up to $10 roundtrip.
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ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.
This column is Copyright © 2009 by Joe Brancatelli. JoeSentMe.com is Copyright © 2009 by Joe Brancatelli. All rights reserved.