The Tactical Traveler By Joe Brancatelli
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Business Travel Briefing for May 10-May 24, 2018
The briefing in brief: Gogo Inflight might soon be gonegone. United and JetBlue alter their routes to Mexico. Hyatt finally adds some hotels (but not many). Airlines take another run at Havana service. Marriott opens hotels in Africa. Chase trims a Priority Pass perk. And much more.
Gogo Inflight Might Soon be Gonegone...
Long before Gogo went public in 2013, I'd been telling you that the in-flight Internet service was a financial and operational house of cards. Yet its IPO went off at $17 and shares almost doubled by the end of 2013. But as I predicted, it has been sinking ever since. A year ago today (May 10) Gogo closed at $13.21. Today it closed at $5.63. In fact, Gogo's shares have plunged by a third this week. Why has the market suddenly caught up with Gogo's unique combination of miserable in-flight service and cash-burning operations? Its first-quarter earnings report and subsequent earnings call last Friday (May 4) were disasters. Gogo also withdrew its previously published 2018 financial guidance. Moody's promptly lowered its ratings across the board and analysts turned bearish after years of blinking away the endless losses. (Gogo hasn't turned a profit as a public company.) Worst of all, Gogo chief executive Oakleigh Thorne admitted Friday that the company's service is awful--and it will need still more financing to survive. Thorne said Gogo's reliability has plummeted and the firm has software and manufacturing issues. The earnings report was little better: Service revenue fell by 8.6 percent compared to 2017's first quarter and interest expenses jumped. The average monthly revenue generated from the 2,900+ planes wired with Gogo declined. Gogo lost $27.4 million in the quarter, which counted as good news compared to the $41 million loss in 2017's first quarter. The immediate future? Grim since Gogo would only be able to borrow at extremely unattractive rates. The outlook: Thorne was cagey for legal reasons, but Gogo is clearly searching for a cash-rich savior.
United Juggles Mexico Service, JetBlue Adds Flights From the Northeast
Travel to Mexico will change in coming months as JetBlue Airways adds flights from its Northeast hub cities and United Airlines juggles its Mexican network. From JetBlue, there'll be daily flights to Mexico City from both New York/Kennedy and Boston/Logan operated with Airbus A320s. Meanwhile, United Airlines is chopping many routes into secondary Mexican cities. Among the runs being dumped: Mazatlan to Chicago and Houston; Villahermosa and Huatulco to Houston; and Leon-Los Angeles. Also going: United's nonstops between Denver and Mexico City. On the other hand, United will add seats and frequencies on some other routes.
Marriott has added two new hotels in Africa: a 200-room Sheraton in the ACI 2000 neighborhood of Bamako, Mali, and a 208-room Marriott in Accra, Ghana. It is across from Kotoka International Airport.
British Airways is restoring service to Durban, South Africa, after an interval of more than two decades. Beginning October 29, there will be three weekly Boeing 787-8 flights from London/Heathrow. The flight will depart mid-afternoon, allowing easy connection from many U.S. cities.
A Tenth the Size of Rivals, Hyatt Actually Opens a Few New Hotels
The fast, organic growth of Hilton and the acquisition of Starwood by Marriott has left Hyatt in the metaphoric dust. In terms of worldwide footprint, Hyatt is now about a tenth the size of Marriott and nearly as miniscule compared to Hilton. It's also a fraction of all the other main players--InterContinental, Wyndham, Accor, Choice--on the global lodging stage. (Hyatt also cheapened its frequency program, making business travelers less interested in seeking out a Hyatt property.) But if you're looking for reasons to stay with Hyatt, at least the chain has opened (by its standards, at least) a slew of new hotels. It has opened outposts of its embryonic Hyatt Centric brand inside the new 83-story Panorama Tower in Brickell Avenue in Miami; on Basadre Avenue in Lima, Peru; and in the business district of Santiago, Chile. Meanwhile, the Hotel Martinez has reopened in Cannes after a renovation and it has been placed in the Unbound Collection, Hyatt's soft brand of independent properties. Also new to the Unbound Collection is the Eliza Jane Hotel on Magazine Street in New Orleans. It's a newly built property cobbled out of nine historic warehouse buildings.
Sonesta Hotels has added The Clift, a 100-year-old San Francisco lodging icon previously aligned with Four Seasons and Ian Schrager's collection.
Marriott is making changes in New York City. The W Hotel on Lexington Avenue, the flagship and first property in the chain, was stripped of its W. It's now an independent called The Maxwell, but remains in the Marriott fold as a Tribute Portfolio independent property. Meanwhile, the first AC Hotel by Marriott has opened in the Times Square neighborhood. A second AC Hotel is expected to open later this year in Manhattan's financial district.
No Travelers and No Right to Visit, But Havana Gets New Flights
Things haven't gone anything like people expected when 50 years of Cuba sanctions were lifted in 2015 and U.S. airlines returned in 2016 to Havana and other Cuban airports. There weren't enough passengers to fill the flights, Cuba's travel infrastructure was lacking and airlines eventually began to dump service. Then, of course, the Trump Administration last year rolled back the Obama Administration's Cuba initiatives. But hope apparently springs eternal and JetBlue Airways and United Airlines are launching new flights to Havana. On July 20, United will begin daily flights from its Houston/Intercontinental hub. (United has been running one weekly flight on the route.) JetBlue in November will add a weekly flight to the Cuban capital from Boston and three weekly nonstops from Fort Lauderdale.
San Francisco Bay Area travelers take note. Effective February 11, BART will restore the shuttle between Millbrae station and SFO. It'll operate weekdays between 6 a.m. and 9 p.m.
New York travelers take note: A new operator has taken over bus service to New York/JFK and New York/LGA. Hours have been reduced, on-airport stops trimmed and service restricted to the Grand Central Terminal and Times Square. Complete details are here.
Business Travel News You Need to Know
The hammer just dropped on one of the most ridiculously rich benefits of the Chase Sapphire Reserve card. It no longer allows an unlimited number of guests to enter a Priority Pass lounge with the cardholder. Effective August 26, Priority Pass privileges will be limited to two free quests.
Amtrak travelers take note: Hot meals will no longer be part of the ticket price if you purchase sleeper service on trains to Chicago from New York and Washington. The railroad also has closed ticket windows at 15 stations around the country, including Cincinnati, Ohio, and Topeka, Kansas.
United Airlines travelers probably don't have to take note: The airline is trimming meal service again and one of the cuts it made was eliminating tomato juice from beverage carts. An immediate pushback from flyers led United to reverse the decision. On the other hand, if you're a fan of Jim Beam or Sprite Zero, you lose. Those have been permanently tossed from the carts.
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