The Tactical Traveler By Joe Brancatelli
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Business-Travel Briefing for April 21 to 30, 2016
The briefing in brief: Another dreary week at United Airlines. Marriott thinks SPG's elites will be impressed with phony, non-guaranteed guaranteed late check-outs. Cathay Pacific would like to sell you an at-the-gate upgrade. Southwest frowns on flying while Muslim. And more.
United Airlines Has a Week Only United Apologists Could Love
The six-week soap opera over the composition of the United Airlines board ended this week. The upshot? United's nonexecutive chairman, Henry Meyer, is out, replaced by former Air Canada chief executive Robert Milton, who joined the United board last month. Milton will rule the roost until 2018, meaning new chief executive Oscar Munoz won't get to add the chairman's title next year as originally planned. Meanwhile, Munoz also accepted two directors from the slate proposed by the hedge funds pressing for a sweeping remake of the dysfunctional United board. Munoz and the hedge funds will then appoint a mutually acceptable third new board member within six months. After the markets closed yesterday (April 20), United released its first-quarter numbers and they were dreary. Net income dropped 36 percent (mostly due to a tax-accounting change). Revenue dropped nearly 5 percent in the quarter. Today (April 21) brought a disastrous earnings call. United said its PRASM, a key measure of revenue, will fall by as much as 13 percent in the second quarter. Munoz also was required to fend off some nasty questions from the usually compliant security analysts and plead for patience, which doesn't go down well more than five years after the disastrous merger with Continental Airlines. The weak earnings, weaker outlook and the board contortions sent the airline's stock into a tailspin. Share prices closed down 10 percent today.
Marriott Offers a Non-Guaranteed Guarantee to Woo Skeptical SPG Elite Members
Ever since Marriott announced the deal last fall to acquire Starwood Hotels, it has been desperate to reassure elite members of Starwood Preferred Guest. SPG elites, used to exceptional privileges, are not sure the nearly perk-free Marriott Rewards elite levels will improve substantially after the programs combine. Marriott executives have repeatedly insisted that they understood the concerns of SPG elites, but this week's smarmy move is clear evidence that Marriott isn't interested in upgrading Marriott Rewards. In case you haven't already heard, Marriott claims it will begin offering "guaranteed" late check-outs next month to Gold and Platinum Marriott elites. But the guarantee is virtually useless since Marriott won't say what the check-out time is. Currently, SPG elites are guaranteed a 4 p.m. check-out time. Marriott's new phony guarantee only promises what a spokeswoman calls "some form" of late check-out. "It's all based on availability," she says. When I asked several Marriott general managers if the late check-out could be as little as several minutes, they all said that would qualify under Marriott's new policy. Not even Marriott Rewards' own members are impressed with Marriott's non-guaranteed guaranteed late check-out.
Hyatt Gold Passport members are now offered a room discount of "up to 10 percent" when they book at Hyatt.com. That's not better than the AAA discount already available at most U.S. Hyatt properties.
American Express Membership Rewards has added Etihad as a transfer partner. Amex points transfer 1:1 to the Etihad Guest program.
Cathay Pacific Would Like to Sell You An Upgrade to Hong Kong
Cathay Pacific stopped selling at-the-airport upgrades in 2014, but at least one person wants the Hong Kong-based carrier to restore the practice for U.S. flights. And since that person is Philippe Lacamp, Cathay Pacific's senior vice president of the Americas, there's hope. "We're leaving millions of dollars on the table by not allowing passengers to buy up" when they reach the airport, he told me this week. "A lot of flyers arrive and feel like they want a little more space, more comfort and the extra service. We should allow them" to quickly, easily and simply purchase an upgrade. Lacamp said the airline eliminated the practice worldwide because it didn't want to cannibalize premium-class sales and flyers in other countries weren't buying more expensive seats because they knew upgrades would be for sale at the airport. "That's not the case here," Lacamp said. "It's much more of a spur-of-the-moment purchase here." So might Cathay resume at-the-gate upgrade sales for its flights from Los Angeles, San Francisco, Chicago, Boston, New York/JFK and Newark? "It's a little bit of an uphill battle," he admitted, but he believes that U.S. flyers may be offered upgrade opportunities again this summer.
OpenSkies, British Airways' boutique airline that flies between New York/Kennedy and Newark and Paris/Orly, has always flown hand-me-down BA Boeing 757s. Now it's adding a hand-me-down BA Boeing 767. It'll be outfitted with 24 business class beds, 24 premium economy chairs configured 2x2 and 141 seats in coach.
LAN Peru is launching three weekly flights between Washington/Dulles and Lima on May 2. LAN Peru will fly Boeing 767-300s configured with 18 business class beds and 220 seats in coach.
The World's Busiest Cities for Hotel Development? You'd Be Surprised
The fevered lodging business is throwing up properties around the world, but you might be surprised where the busiest cities for development are located. It's no shock that there are more hotels going up in New York than anywhere else. According to a report from the Lodging Econometrics tracking firm, there are 204 properties with nearly 35,000 rooms in the Big Apple pipeline. But would you guess that Seoul, with 132 hotels and 28,000 rooms, comes in second? Dubai is third (94 hotels with 27,000 rooms). Then comes Shanghai with 115 projects encompassing 23,000 rooms and Jakarta, with 128 hotels covering 22,000 rooms. Oddly, none of the new hotels below are in the Top 5 cities. Go figure.
Hyatt has opened a 249-room Hyatt Regency in Aurora, Colorado, near the University of Colorado medical campus.
Starwood has opened a 160-room Element hotel in Amsterdam. It's located in a former office building at the Gelderlandplein shopping mall.
Marriott has opened a 170-room Ritz-Carlton in Budapest. It's housed in a 100-year-old building that once housed an insurance company. It has also opened its first Delta hotel in the United States since buying the Canadian chain. The 241-room property is in Orlando, just off Interstate 4 near Disney World.
Hilton has opened a 102-room Homewood Suites near Miami's Brickell business district; a 173-room Hilton Garden Inn in Vienna, Austria, inside the Business Park Vienna; and a 195-room DoubleTree in Tyumen, Turkey.
Business Travel News You Need to Know
Southwest Airlines flyers take note: The airline apparently believes passengers are not allowed to travel while Muslim. Last week, a woman wearing a hijab was ejected for trying to change seats on a Chicago-Seattle flight. Which is bizarre since Southwest doesn't have assigned seats. Earlier this month, a UC Berkeley student was removed from a Los Angeles-Oakland flight. His offense? Speaking Arabic. Southwest's responses to the incidents have been to lock down, deflect media questions and refuse to discuss why the passengers were removed.
Delta Air Lines flyers take note: The SkyClub between Gates E10 and E11 at Dallas/Fort Worth has reopened.
Lisbon travelers take note: The city's Blue Line has been extended to Reboleira in the Amadora district. That means the Blue Line is now connected to the Sintra line suburban train.
Malaysia Airlines, still reeling after two flight disasters in 2014, is leaderless again. Christoph Mueller, recruited last year from Aer Lingus, has resigned as chief executive. Mueller is the first non-Malaysian to run the airline and insiders speculate that the German national has run afoul of the state-owned fund that owns the carrier.
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