2009 March

Hotel News updates for Carlson Hotels and Hilton HHonors

Travel News
How the New Age of Austerity Impacts Your Use of Hotels

You’ll probably make fewer, shorter and cheaper business trips this year and opt for basic efficiency and good service from the hotels you do stay in, according to a report by travel technology company Amadeus for the Economist Intelligence Unit.

Increased scrutiny of how business—any business, not just those using TARP
money—spends money means companies want to make business trips as productive as possible.

Gyms and restaurants count for little. Fast internet access is the most important amenity; efficient check-in is also key. The report predicts a “flight to trusted brands” and expectations of a certain level of good service no matter where you are in the world. (Source: Amadeus press release).

Hotels Make Loyalty Programs More Attractive
Hotel companies are enhancing their loyalty programs. Hilton HHonors has launched a new premium credit card, the Hilton HHonors Surpass Card from America Express, and enhanced the existing Hilton HHonors Card from American Express. Both cards let you earn points fast and offer generous awards.

The new Surpass card awards 9 points for every eligible $1 spent at Hilton Family hotels; complimentary standard membership in Priority Pass, which gives card members access to more than 500 airport lounges worldwide; and the ability to earn Hilton HHonors’ Diamond VIP status with an annual spend of $40,000, Hilton HHonors Card enhancements include upping bonus points (6 up from 5) for spending in an expanded list of double point categories, and special perks such as discounted and upgraded chauffeured car service.

Carlson Hotels Worldwide is offering its guests “3 for 3” – an additional 3,000 bonus Gold Points for members of its goldpoints plus loyalty program who stay three nights at any global Carlson Hotels from now through April 30. (Source: Hilton, Carlson press releases).

PKF Forecasts Declining Room Rates

Drawing on data that it’s collected since 1937, PKF Hospitality Research says that the U.S. has experienced 11 economic recessions since 1937; they lasted anywhere from six to 16 months. Some of the results were obvious, but there were some surprises, too.

As expected, during nine of the 11 downturns, occupancies fell, but that did not automatically mean average daily rates (ADR) fell. In fact, in eight of 11 recessions, they increased. For example, in the 1973-75 and 1980-82 recession, caused mainly by inflation, rates increased and hotels still were able to make some minor profit gains.

This time around, however,

PKF expects ADRs to fall. PKR forecasts that lodging demand will decline a cumulative 4.2 percent from 2007 through 2009
That, coupled with a 5.6 percent increase in supply, will produce 9.1 percent decline in occupancy to 57.2 percent,
The result: a 4.6 percent drop in ADR, continuing the discounting that began in the fourth quarter of 2008. Source: PKF press release

Airlines Travel News Updates from American Express

Airplane at take off.
International Travel Keeps Dropping
Demand for international travel fell 5.6 percent year over year in January, a full percentage point more than the 4.6 percent drop in December and the fifth consecutive month that traffic fell, according to the International Air Transport Association.

Demand continues to fall faster than airlines can cut capacity; capacity cuts were two percent. The decline was biggest in Asia, 8.4 percent; North America was second with 6.2 percent.

The Middle East was the only region to see traffic grow, 3.1 percent. There was one bit of good news: the fact that fuel prices remain well below last year’s levels. But IATA projects that airline revenues will drop $35 billion to $500 billion this year. (Source: IATA press release).

Southwest Offers Free Wi-Fi on Four Planes
Southwest Airlines expects to have four aircraft with in-flight Wi-Fi this month –you’ll be able to tell if you’re aboard one from the placards you see upon boarding and onboard instruction sheets.

Southwest is offering the service for free during the test period. Passengers will be able to log on using Wi-Fi enabled devices such as laptops, iPhones and smart phones. Southwest is also offering an in-flight homepage with the service. It includes an in-flight homepage with a flight tracker and local news and information.

Passengers can follow the plane’s flight path and view points of interest they’re flying over. Cellular technology will not work. (Source: Southwest press release).

More Airlines Go Cash-Free
United Airlines and American Airlines are phasing out cash in flight and will only accept major credit cards and debit cards after a transition period. United is introducing EasyPurchase March 23.

After a brief transition, it will only accept credit and debit cards on flights within the United States, including Hawaii, and on flights to and from Canada, Mexico, Central America and the Caribbean. It will continue to accept cash on flights to and from Europe, Asia, the Middle East and South America. On United Express, it will continue to accept cash.

American will begin its transition to credit and debit cards only this summer on flights within the United States and to and from Canada. (Source: United, American press releases).

Delta Enables Mileage Transfers Between Sky Miles, Worldperks
Delta Air Lines said that Delta SkyMiles and Northwest WorldPerks members now can link frequent flyer accounts and transfer miles between both accounts at no charge. Members who link their accounts before March 15, 2009 will earn 500 bonus miles.

This means members who have SkyMiles and WorldPerks accounts can visit delta.com to link their accounts and transfer any amount of miles into either account on an unlimited basis. Both accounts will remain open and functioning until late 2009 when Delta plans to merge the two programs. (Source: Delta press release).

More Accidents But Fewer Fatalities in 2008
On the bright side, aviation safety performance improved, with the total number of aviation fatalities dropping from 692 in 2007 to 502 in 2008, a 56 percent improvement in the fatality rate, according to IATA.

There were more accidents in 2008—109 compared to 100—and the number of fatal accidents increased from 20 in 2007 to 23 in 2008. There were regional differences. North Asia had zero losses.

North America, Europe and the Asia Pacific performed better than the global average; Africa’s accident rate was 2.6 times worse than the world average, but that was a vast improvement over 2005, when it was the worst in the world. Separately, the U.S. Department of Transportation said that the U.S. has seen a 65 percent reduction in the aviation fatal accident rate between 1997 and 2006.

Before the fatal crash in Buffalo last month, the DOT said that there had been no fatal commercial accidents for more than two years. (Source: IATA, DOT press releases).