In this year’s Travel Industry
Survey, researcher Stan Plog
found plots and subplots. 12
Hotel incentives. 43
Wholesaler beat. 46
Short takes on itinerary tools,
nude beaches, blogs and obese
Section 1 of 2
ADR up 3.7% while occupancy was down
With hotel analysts constantly reminding hotel owners how long it took for their
rate structures to recover from post-9/11 fire
sales, hoteliers, for now at least, seem to be
focused on promotions that reduce a travel-
OCTOBER 27, 2008
a growing trend
for U.S. airlines
THE NATIONAL NEWSPAPER OF THE TRAVEL INDUSTRY
originally was slated for distribution in
September. As Ameri-
By Michael Fabey
8 = 3 D B C A H >Rc^Q Ta!&! '
ARC kills system that
let airlines draft fees
from agents’ accounts
By Jerry Limone
Year-to-date numbers from Smith show
3%, to 62.9%, and RevPAR was up 0.6%, to
See RATES on Page 71
By Lester Craft
Times that defy
Business owners and managers will be ex-
cused if they decide to put off 2009 plan-
ning and budgeting for a while. After all,
what good is it to plan for next year when
prospects for the economy and the travel
industry seem to change from day to day,
all too often for the worse?
But while owners and managers prob-
ably can wait, analysts and economists do
not have that luxury. This is hump time for
them, the season when forecasts for the
year ahead are churned out so that man-
agers can use them to plan.
Not surprisingly, prognosticators are
having a hard time. American Express
Business Travel, for example, last week
released a forecast for next year that
can Express put it, the
sible for producing the report delayed its
release in order to evaluate the impact of
market activities that have occurred over
the last 30 days.”
SPECIAL PULLOUT SECTION
Why do consumers use the Internet?
Why do consumers use travel agents?
C A 0 E 4 ; B42C8>=!^U!
What a difference a few inches can make.
On one hand, Continental’s decision to
cut the maximum size for carry-on bags to
45 linear inches from the previous 51-inch
limit helps maximize onboard overhead stor-
But it comes just as Continental joins other
carriers in charging coach passengers $15 for
a first checked bag. Since the checked-bag fee
pushes passengers to cram as much as pos-
sible into their carry-ons, the simultaneous
reduction in size limits is clearly designed to
divert as much baggage as possible into the
carrier’s revenue stream.
Though many passengers see such fees as
obnoxious nickel-and-diming, the airlines
See A LA CAR TE on Page 70
Conversations with other analysts and
economists over the past week have
revealed similar stories. The advent of
the credit crunch and Wall Street’s melt-
down introduced startling elements of
uncertainty, tinged with the realization
that things will be worse than had been
expected, into attempts to predict next
On top of this, a massive reordering is
taking place at many levels. The luxury
segment has lost its luster. The dollar, life-
less just a few weeks ago, suddenly is at
five-year highs. Fuel costs have gone from
stratosphere to nose-dive. And so on.
[ PRICING STRATEGY AVOIDS TRAPS THAT FOLLOWED 9/11 ]
Hotel rates keep rising, despite
sliding occupancy and revenue
By Jeri Clausing
Despite dropping occupancy and sliding
revenue, the latest numbers from Smith
er’s bottom line without reducing the base
rate that hotels use to negotiate future group,
business and tour operator prices.
So far, it seems to be working.
But this much is certain: All forecasts for
2009 will be subject to revision. And barring an unforeseen string of good news,
the bias of changes is likely to be downward. It’s worth bearing in mind when
the calendar indicates that planning and
budgeting for next year can’t be put off
Travel Research show the average daily rate
for hotels in North America was up 3% last
But that doesn’t mean travelers aren’t get-
ting better deals.
Last month, average daily rates rose 3%,
to $107.31 from $104.14 last year, Smith reported last week. Meantime, occupancy in
September fell 5.9%, to 60.6%. Revenue per
available room declined 3.1%, to $65.08.
ARC said last week that it would discontinue
the use of Payment Express, a tool that al-
lowed airlines to automatically draft travel
agencies’ accounts to collect certain fees.
Payment Express will be replaced by ARC
Memo Manager, a product that enables
agents to initiate payments.
“It’s excellent news for travel agents that
this heinous program has been terminated,”
said Paul Ruden, ASTA’s staff senior vice
president for legal and industry affairs.
ARC spokesman Allan Muten said United,
Delta, Continental and Lan Chile were us-
ing Payment Express to automatically debit
agents’ accounts. The tool was launched after
the 2006 upheaval of the GDS economic sys-
tem, when airlines started charging segment
fees to travel agencies that did not opt into
approved booking programs.
See ARC on Page 72