The Why’s and How’s of Airline Pricing
We at TravelPlex are often asked questions about what determines airline pricing and why air prices are available one minute and gone the next. We’d like to address these questions. The first blog will be “The Why’s and How’s of Airline Pricing”. Our next blog will address “What Determines Airfares?”
However, the first thing you need to realize is that to an airline, an empty airline seat is as worthless as a rotten piece of fruit. As airlines struggle to re-capture the days of record profits, the yield-management system that the airlines have employed for years has given way to a revenue based model. This program monitors each flight's profitability versus a mix of the flight's yield and flight's load.
Confessions of a Hotel Executive
Recently, people have asked questions about hotel pricing. We thought it was a good time that we reprinted a blog we did a few years ago about a local hotel General Manager that shared some industry insights with us. This person has been in the industry for the past 22 years and has climbed the hotel ranks, starting as a front-desk clerk, auditor, accountant, human resources director, and finally a General Manager. He has worked at several big-name hotel groups in St. Louis, and has recently relocated to Chicago. The move has nothing to do with the “spilling of the beans” either...
Travel Loyalty Points Reviewed
More than half of all U.S. travel loyalty points redemptions happen from April to August. This is, of course, the busy summer travel season and redemptions for this past summer were up 50 percent year-over-year as travelers took advantage of a growing U.S. economy.
That’s according to Connections, a company helping brands create white label loyalty programs with travel clients such as American Airlines, Marriott International, and Royal Caribbean International. The data is based on Connections’ internal analysis of 2.2 million U.S. travel loyalty program members that were part of co-branded card programs from December 2014 to June 2016.
Three reward points discussions broken down below highlight consumer redemption behavior online and through call centers:
Marriott / Starwood Merger Complete
If you are one of those travelers who have been on the edge of your seat waiting for the merger between Marriott and Starwood to finally formalize, well, your wait is over.
As expected, there were changes in the two chains' frequent guest reward programs. Members are eligible to transfer points at a 3-to-1 ratio (three Marriott Rewards points equal one SPG Starpoint). Starwood and Marriott guests will have their current status matched in the combined company’s loyalty program.
Hotel Service Back in Fashion
If you travel for business – or even stay at hotels for vacation – you’ve probably witnessed a vast difference in the hotel experience within the past five years or so. Long gone is room service, replaced by food and drink kiosks in the lobby. Reward programs are modified as often as you change the oil in your car, and customer service? Well, hotels have followed the airlines' blueprint of customer service, and you know what dark alley that’s heading toward.
In order to expand the brands' offerings, both on new-build properties and renovated, older hotel chains have chased the traveler dollar and reduced the services and amenities provided. That is, until 2016. A recent traveler study has found that hotels are shifting their focus back to the service element.
Ready Or Not – Marriott-Starwood Merger is Almost Here
We at TravelPlex have been closely monitoring the Marriott – Starwood merger, wondering what effects this could have on our corporate clients. Ms. Kathy Stirmlinger, TravelPlex’s Director of Hotel Operations, was recently quoted as saying, “Marriott’s acquisition of the Starwood Group will have a larger consequence on companies with hotel spend north of half a million dollars. These companies will feel the squeeze and the impact when negotiating larger contracts more so than those with a smaller hotel spend. Ms. Stirmlinger added, “Companies who have the capabilities – and savvy – to shift room nights to other hotel brands will ultimately win this game.”
TravelPlex's Memorable City: Raleigh - Durham
Our Memorable City for this newsletter is Raleigh-Durham. Or, more correctly, our “cities” this month. While many who are not familiar with the area confuse the two as one city, this is not the case. Just as many people confuse Budapest one city straddling the Danube, they are in fact two, distinct cities (and by the way, as I was recently reminded, it is pronounced Buda – Pesh).
So, to honor two distinct cities, separated by 24 miles, we shall address each one and the tourist sites of each.
New Hotel RFP Technology Puts Companies in Charge
For years, TravelPlex have been assisting our clients with their preferred hotel negotiations. As industry technology has progressed, we have kept an eye on the emerging tools available that can assist with our client’s hotel needs.
This past year, Ms. Kathy Stirmlinger, TravelPlex’s Director of Hotel Operations, has identified new technology now available to us in order to simplify the hotel negotiation process.
TravelPlex is proud to announce that we will launch RFP-Finder in the coming months. This tool will help us unite corporate travel buyers with hotels to efficiently solicit, negotiate, finalize and audit their corporate transient hotel programs.
Wyndham Replaces Marriott as Best Frequent Guest Program
Every quarter TravelPlex reviews and monitors frequent traveler programs. For the last few years, the same vendors have maintained the #1 rankings in their perspective industry. Southwest Airlines replaced American Airlines three years ago and has not relinquished its dominance. National has ousted Hertz as the top rental car company in both customer service and frequent renter program.
But, what has been a given for the last 10 quarters has now changed. Marriott was the hotel brand offering great service, competitive prices (in its category) and a very friendly frequent guest program. However, when Marriott purchased Starwood last November, whispers were loud in the industry that the marriage of the two frequent guest programs could be messy and not as smooth of a transition as some were predicting, including those at the hotel companies. Apparently, the experts got this one right.
Domestic In-Flight Entertainment Is Now Free on Most Airlines
Roughly 10 years ago, finding entertainment on domestic flights was limited to playing computer games or cards; listening to the elderly grandmother next to you talking about her incredible grandchildren; or counting down the seconds before you remind the six-year-old with the need to practice their soccer kick on your back seat that they need to stop it – now!
Frontier Airlines began the move to provide inflight entertainment – I mean REAL inflight entertainment in 2005. They realized this was a nice money maker and offered something other carriers did not. A break from the monotony of flying. However, it wasn’t long before other airlines saw in-flight entertainment as a revenue stream...
Ridesharing and Car Services May Join Forces Soon
TravelPlex counselors get asked quite a bit about the differences and benefits of taxi services versus the up and coming services of an UBER or Lyft. The growth of the sharing economy in corporate travel has been a challenge for both travel managers and travel management companies.
That said, it is unusual to see travel service providers square off in public on the battle between ridesharing services and traditional black car services.
How To Prevent A Heart Attack
While this is completely off base with anything travel related, we at TravelPlex felt that it was worthy enough to notify our travelers. Look, we know many of our travelers live stressful lives. Even if you’re not a traveler, you know someone who does lead a taxing life. Please pass this along to those you feel could benefit from such information. This information originates from the Mayo Clinic.
Overhaul At LaGuardia Delays Traffic To Airport
If you have flown into New York’s LaGuardia airport within the past few months, you’ve probably been met with gnarled traffic – trying to arrive at the airport as well as attempting to exit the facility. These traffic issues are not temporary, and the New York Port Authority is advising travelers that the revamping of the outdated airport can take as long as five years. If you know anything about projects as cumbersome as airport construction, you might want to tack a year or so onto that number.
The TSA recently recommended that travelers flying out of New York’s LaGuardia Airport arrive at least 2 to 2-and-a-half hours ahead of their scheduled departure due to traffic delays caused by airport construction.
The Evolution of Luggage
While these travel blogs are usually aligned with travel tips and trends, we thought we would provide some information on something most people take for granted and put little thought into when purchasing. Of course, I’m talking about luggage.
For decades, luggage has stayed relatively unchanged, however, there are a number of new luggage concepts hitting the marketplace.
Open Booking Travel on The Internet
Since we continue to be asked the question about the practice of “open booking”, we thought it a good time to address this again. While the term open booking has been around a few years, people are becoming more aware of it as the practice increases to be viewed by traveler and arrangers both. Open booking is the ability to book on any Internet site they choose (Travelocity, Expedia, etc.), and have the reservation captured and reported by the corporation's credit card company or online travel-and-expense system (i.e. Concur), by using various new internment technologies, such as TripLink. Some travelers feel this allows them more freedom to do what they want, while still providing adherence to policies, and allows all of their travel information to be captured.
However, before everyone starts jumping onto to their favorite travel website, there may be a few things you might want to consider.
Be Careful Of That $49 Airfare
My grandfather was full of wisdom and the older I get, the smarter he becomes! He used to tell me, “If it sounds too good to be true, it always is”. I’m sure you heard the same pearl of wisdom by one of your elders at some point in your life. Which is why I would like to pass along a nugget of truth for you to ponder.
Be careful of incredibly low airfare prices. Frontier Airlines and Spirit have supplanted Southwest Airlines as the low-fare leaders in the airline industry. But you need to know the rest of the story.