The Business of Travel

rss

The Official Blog of the Global Business Travel Association


Week in Review

On Tuesday, the UK parliament rejected the Brexit deal that PM Theresa May had reached with the European Union, NPR reports. As the March 29 deadline quickly approaches, it’s possible that the UK will leave the EU with no deal in place. The UK could also unilaterally reverse its decision to leave, as ruled by the bloc’s highest court.

Car rental giant Enterprise is set to acquire corporate travel provider Deem, Skift notes. The deal is expected to close in the first quarter of 2019.

Also in acquisition news, TechCrunch reports American Express acquired Japan-based restaurant booking service Pocket Concierge in an undisclosed deal.

According to The Seattle Times, divers have recovered the cockpit voice recorder from the Lion Air jet that crashed in October. The aircraft crashed into the Java Sea just minutes after taking off, killing all 189 people on board.

After the arrest of Huawei CFO Meng Wanzhou in Canada, China is asking some of its state-run enterprises to avoid business trips to the U.S. and its allies, Bloomberg notes. The country is also asking them to take extra precautions to protect their devices if travel is necessary.

On the branding front, Travel Weekly reports Marriott is relaunching its loyalty program as Marriott Bonvoy, encompassing its Marriott Rewards, Starwood Preferred Guest, and Ritz-Carlton Rewards platforms.

Aer Lingus also unveiled a rebrand of their logo and livery this week, Buying Business Travel writes. The airline is set to take delivery of four A321LRs this year, which will allow them to introduce a new business class product.

According to Skift, event organizers are planning for stretched budgets this year. A poll of 1,200 event creators revealed that half expect their budget for 2019 to remain the same as the previous year; however, 49% also said they expect to be responsible for more events than last year.

All Nippon Airways is trialing driverless buses in a restricted area at Tokyo Haneda Airport, Business Traveller notes. The airline will run tests until January 25, and if the trial is successful, it could lead to the implementation of driverless buses at the airport by 2020.

The future of travel could also hold flying taxi services. According to Skift, Switzerland’s national rail service is in talks to develop air taxis that would transport customers from rail stations to destinations.


Week in Review

Happy New Year! The Week in Review is back in action to provide you with the latest business travel industry news.

In late November, Marriott announced that approximately 500 million guests (who made a reservation at a Starwood property) were impacted in a data breach. Today, the hospitality company downgraded its estimate to 383 million compromised records, Skift reports. Since some guests have multiple records in Marriott's system, the number of guests impacted is likely less than 383 million.

According to BBC, London’s Heathrow Airport and Sussex’s Gatwick Airport will invest millions of pounds in anti-drone equipment that can obstruct communications between drones and their operators. This move follows a drone disruption at Gatwick that caused 1,000 cancelled flights over 3 days last month.

In acquisition news, Flight Centre Travel Group has agreed to acquire Casto Travel’s U.S. operations, Skift writes. The Australia-based travel agency has a mission to strengthen its North American presence.

AirlineRatings.com has released its list of the safest airlines in the world for 2019, with Qantas topping the list, USA TODAY notes. The list also includes the 10 safest low-cost airlines.

Qatar Airways acquired a 5 percent stake in China Southern Airlines on 28 December, Buying Business Travel reports. The airline also holds shares in International Airlines Group, LATAM Airlines Group, Air Italy, and Cathay Pacific.

New York was the world’s top destination for business travel in 2018, Business Traveller writes. The annual rankings from Egencia highlight the most traveled-to destinations for business. London, Paris, Shanghai, and Toronto are also among the top five destinations.

According to Skift, new safety concerns present a complicated challenge for event organizers. From extreme weather to terrorist attacks to widespread disease outbreaks, the duty of care bar continues to rise for event planners.

Singapore Airlines is now offering passengers the ability to pre-book their meal choices, Business Traveller reports. This only applies to travelers in suites, first and business class.

Buying Business Travel writes on the importance of having proper risk management processes and programs in place. Is your organization prepared to locate and help your travelers in the face of an emergency?

According to Business Traveller, the global ridesharing industry is valued at $61.3 billion and is expected to grow to $218 billion by 2025.


Week in Review

Marriott International revealed that hackers breached its reservation system, compromising the personal data of up to 500 million guests, The New York Times reports. The personal information includes credit card numbers, addresses, and passport numbers.

The hack began four years ago, and the hackers left behind clues that suggest they were working for a Chinese government intelligence-gathering operation, CNBC notes.

According to Travel Weekly, the hotel chain could face a fine of up to £20 million because of the EU’s General Data Protection Regulation (GDPR).

Canada’s Minister of Transport Marc Garneau announced a new Open Skies-type agreement between Canada and the UK, TravelDailyNews International reports. The agreement will allow Canadian and British air carriers to operate between both countries and give full flexibility on route selection, service frequency, and pricing. It will take effect after Brexit, when the UK will no longer be covered by the EU-Canada Air Transport Agreement.  

GBTA wrapped up its ninth annual conference in Europe last week, with nearly 1,100 attendees from 30+ countries. The hot topics of the conference were automation, fragmentation and consolidation.

During the conference, our Executive Director & COO Mike McCormick and Konstantin Sixt discussed the future of mobility, challenges facing ground transportation and the future of Sixt as a company.

According to TravelPulse, Uber is launching a new minibus service in Cairo. The ride-sharing company wants to alleviate traffic congestion by enticing individuals to use the minibus service in place of personal automobiles.

At the beginning of the month, Conde Nast Traveler reports LaGuardia opened 11 gates in its brand new Terminal B, amounting to 243,000 square feet of space.

Alphabet Inc. subsidiary Waymo launched the first phase of its self-driving ride-hailing service in Phoenix on Wednesday, Auto Rental News writes. A limited number of people can access the app to hail a self-driving vehicle, and each car will feature a safety driver for the duration of the ride.

In other ground transportation news, peer-to-peer car rental app Getaround launched in Denver on Thursday. According to BusinessDen, car owners can list their vehicles for rent through the app by providing a description of their car and setting an availability schedule.

United launched a new premium economy offering for its longer international flights, CNBC notes. The seats fall between coach and business class and come with more legroom, amenity kits, and other perks.


Podcast: Live from Center Stage at GBTA Convention 2018 Part 1

For this week’s episode, The Business of Travel takes you back to last week’s GBTA Convention. Hear all of Monday’s Center Stage sessions. First, up you’ll hear from Marriott International President and CEO Arne Sorenson in a one-on-one interview with GBTA Executive Director and COO Mike McCormick as he shares his outlook on the business travel industry, the shakeup over group commissions and the company’s home-sharing strategy.

Next up is a panel featuring Successful Women Leading in Business Travel, moderated by GBTA’s Allied Member of the Year honoree and the SVP and Chief Marketing Officer of Best Western Hotels & Resorts, Dorothy Dowling. The panel of top female business travel executives share their insights on the unique challenges they faced as women arriving in leadership positions within their companies.

Wrapping up today’s episode, you’ll hear our final Monday Center Stage session where TSA Administrator David Pekoske and U.S. Customs and Border Protection Commissioner Kevin McAleenan took the stage together for the first-time in an interview with McCormick. The two highlighted technology’s potential to dramatically increase security and passenger facilitation.

 

 

You can download and listen to The Business of Travel in iTunesStitcherGoogle Play and your other favorite podcast directories. Be sure to subscribe to the show so you don't miss out!

 


Bullish on the Future, Marriott CEO Takes Center Stage at GBTA Convention 2018

As only the third person in 90 years to head the largest hotel company in the world, Marriott CEO Arne Sorenson shared his outlook on the business travel industry, the shakeup over group commissions and the company’s home-sharing strategy on Center Stage at GBTA Convention 2018.

Sorenson said he is “thrilled to be in an industry that’s growing,” during a one-on-one interview  kicking off Center Stage with GBTA Executive Director and COO Michael W. McCormick.  Marriott’s success, like much of the rest of the travel industry, is thanks to solid economic progress and the global growth of the middle class, he said.

Consumers are spending more of their dollars on experiences, also contributing to the recent growth many in the travel industry are enjoying.

Perhaps the best news is that Sorenson doesn’t think the prosperity will end anytime soon. “I don’t think we’re in a plateau or peak. We are in a complicated world today, and that complicated world exists in the United States and it exists abroad.” Those complexities are hard to predict, but the bigger trends will last for decades, Sorenson predicted.

McCormick and Sorenson discussed some contentious issues, including Marriott’s market concentration, pricing and group commissions. With a portfolio of 30 brands and an enormous presence in some larger cities, McCormick relayed GBTA members’ concerns over rates and the ability to negotiate in those markets.

“We don’t have much pricing power,” Sorenson explained. “As big as we are--roughly 15 percent the of U.S. hotel business--we only price about half of those rooms.” The other half, he explained, is priced by franchisees. Further, Sorenson said, there is “total transparency, enormous competition…[and] the potential for a rate premium is extraordinarily modest.”

In addressing the company’s decision to reduce group intermediary commissions, Sorenson highlighted the significant rise in group business over the past decade. He would like ultimately to transition to a commission system where group intermediaries are rewarded based on the value they deliver to their customers.

“Some were delivering amazing value, some weren’t at all,” he said, “and they were all charging 10 percent. Ten percent in the context of many of our hotels in bigger cities in the U.S. is a very healthy percentage of the total profitability of that hotel.” He proposed finding a position where “the economics are fair and we are as aligned as we can be.”

Sorenson discussed the home sharing’s effect on the hotel business and the company’s future plans to participate in that space; however, the company’s pilot program—200 whole-home units in England connected to the loyalty program--competes for leisure travelers, not business travelers. Home sharing, he said, competes “broadly in the hospitality space,” but skews overwhelmingly to leisure and budget travel. As for the future, Sorensen said, “I think it’s fair to say this business exists, and we’re unlikely to be able to wake up tomorrow and suddenly see that it’s [the home services industry] gone.”


Message From the Office of the GBTA President - July

*The following post was also sent as an email to GBTA Members.*

Everyone is working hard to get ready for Convention. Can you believe we are less than two months away from celebrating the 50th Anniversary of GBTA? Below is a brief update on what we are working on.

Convention
We recently announced more of our Center Stage sessions. I am pleased to announce that Turning the Tables—Buyers Take Center Stage panel will kick off Tuesday morning. This will be a great panel and interesting change of pace as we usually put a supplier in the hot seat, but this year we are really turning the tables. Carlson Wagonlit Travel CEO Kurt Ekert will moderate a panel of senior buyers providing their take on the latest trends, top opportunities and major challenges facing today’s business travel industry. 

We have also added a special session to Monday’s Center Stage line-up. In a One on One with Arne Sorenson, the Marriott President and CEO will take the stage to share his outlook on the future of hospitality. In this candid interview, Sorenson will talk about the progress of the Marriott Starwood merger while talking about how hotel brands are changing to cater to today’s travelers.

The GBTA mobile app is available to all GBTA attendees. Access everything you need to know about Convention. You can enhance your experience in San Diego by using the app to create a personal schedule, access speaker details, exhibitor lists and an Expo map and so much more. Click here to download today.

Committee Highlight: Sports, Media and Entertainment
The Sports, Media and Entertainment Committee’s mission is to find common solutions to the unique challenges facing business travel professionals in these dynamic fields. This year the Committee hosted two Peer-to-Peer sessions, in New York City and L.A., where buyer members shared best practices. The sessions have led to great improvements such as successful negotiations with several airlines regarding the media bag rate as well as 24/7 support desks specifically assigned to handle the unique requirements of those in the sport, media and entertainment industries. United has even started a specific group dedicated to Sports to handle those requirements. From the hotel side, the Committee has been working closely with many hotels to keep costs down for yearly planned events.

Legislative Summit 2018
GBTA hosted its 16th annual Legislative Summit this June. Over 130 GBTA members representing 23 states attended, and called on lawmakers to pass a five-year FAA Bill ensuring a long-term plan for the future of aviation and requested the entire 9-11 Aviation Security Fee is used for airport security and passenger facilitation.

The Legislative Summit kicked off with a full day of discussions with top lawmakers, industry insiders and political strategists on key travel issues. Former Reps. Al Wynn (D-MD) and Randy Forbes (R-VA) led a discussion on navigating the partisan divide in today’s politics. Anthony Bedell, Deputy Assistant Secretary for Intergovernmental Affairs for the U.S. Department of Transportation (DOT) discussed the DOT’s current priorities, planned investments in infrastructure and the not-so-distant future featuring autonomous vehicles and drones.

GBTA also honored Rep. Sam Graves (R-MO), Rep. John Katko (R-NY), Sen. Ed Markey (D-MA) and Rep. Bonnie Watson Coleman (D-NJ) with the GBTA Navigator Award for their efforts as strong champions for business travelers and the business travel industry. Each also gave remarks during the Summit on key issues impacting our industry.

As always, thank you to our members for your continued support and commitment. Please feel free to contact me with any thoughts or questions you may have.

 


Week in Review

According to Buying Business Travel, Emirates and Etihad have announced suspension of all flights to and from Doha. The move comes after the UAE, Saudi Arabia, Egypt, Bahrain, Libya and Yemen cut diplomatic ties with Qatar.

Bloomberg reports a number of sanctions have already been levied on Qatar by its Gulf rivals. The UAE, for example, has closed its airspace to all traffic to and from Qatar.

Newsweek notes Australian airline Qantas has banned Qatari nationals from flying to Dubai, as a result of the UAE initially banning them from passing through.

According to The New York Times, President Trump endorsed a proposal on Monday to privatize air traffic control. GBTA calls ATC privatization a high stakes gamble for the business traveler and has joined Airlines for America and Travelers United in calling on Congress to effectively modernize the nation’s air traffic control.

According to Skift, the United States may extend the laptop ban to flights from 71 additional airports. Homeland Security Secretary John Kelly did not specify the airports under consideration.

NPR claims fears continue to grow as DHS officials consider expanding the airline laptop ban.

Buying Business Travel reports Hertz has signed a partnership agreement with Aeromexico and Hertz Mexico.

According to Travel Agent Central, the Trump administration has asked the Supreme Court to reinstate the travel ban.

Skift claims the Supreme Court travel ban ruling could hinge on Trump’s anti-Muslim comments.

Hotel News Resource reports over one-third of North American business travelers extended a work trip for leisure in the past year.

Skift notes Wyndham launched a new independent lifestyle brand called Trademark Hotel Collection.

According to TravelDailyNews International, modest growth is expected to continue for U.S. hotels through 2018. The same source claims a new travel website lets users name their price for business and first class flights.

According to Bloomberg, “basic economy” actually makes travelers pay more to fly.

Buying Business Travel reports the EU plans to tackle unfair competition from foreign rivals.

4Hoteliers notes Marriott debuted its first property in Nepal.

According to Business Traveler, BMW and Emirates have partnered to roll out a new fleet of cars for first and business class customers.


The Future of Marriott's Brands

A couple of months ago, Marriott International became the largest hotel chain in the world after closing on a $13 billion acquisition of Starwood Hotels & Resorts. With 30 brands now under one umbrella, there has been much speculation over Marriott's plan to manage them all.

Over the Thanksgiving weekend, Marriott began implementing a strategy in which it differentiates brands based on whether they are “classic” or “distinctive.” The hotel chain also began grouping hotels in categories, such as luxury, premium and longer stays. Marriott CEO Arne Sorenson has announced all 30 brands are expected to remain in place. marriott_brands  

Image Courtesy of Marriott 

In July, Marriott’s Brian King sat down with GBTA’s Caitlin Gomez at our GBTA Convention Broadcast Studio. The two chatted about the ways in which Marriott embraces innovation, as well as the biggest challenges the industry will face in the coming year. King discussed how the introduction of new supply globally contributes to a crowded marketplace and makes it difficult for brands to cut through the clutter.

View the full video here:

Visit GBTA’s YouTube Channel for even more insight and Broadcast Studio interviews from this year’s Convention.