Five reasons I’m insanely jealous of Michael O’Leary

I am jealous of Michael O’Leary. Very. The CEO of super-low-rent European discounter Ryanair, O’Leary has developed a reputation. He’s loud. He says what’s on his mind. He really doesn’t care what you think about him. He’s probably broken every rule of public relations and investor relations. I’ve been with Gadling since December 2008, and O’Leary has been a great source of posts every step of the way.

So, he’s the CEO and he can say what he wants. This isn’t really how it works: most CEOs have plenty of people telling them what to say and when to shut up. This is why O’Leary has it made.

And now it’s time for my confession: five reasons I’m jealous of Michael O’Leary, CEO of Ryanair:

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1. He’s the CEO: hey, that means something to me. I wouldn’t mind being the top dog. O’Leary brings in a good living every year, and he gets to call the shots. The latter likely results from the fact that he does the former well.

2. He really does speak his mind: whether it’s demanding that the government tax someone else or coming to the defense of a stewardess moonlighting as a porn star, O’Leary has a position on everything. And, he’s more than happy to share it publicly. Of course, bloggers have fallen into his crosshairs a few times.

3. He’s a product development genius: how many CEOs have actually suggested bundling blowjobs with their products? Or, at the other end of the spectrum, how many have suggested that their customers pay for restroom access? If I could come up with stuff like that, my days at Gadling would be nothing more than a memory.

4. He’s old school: executives tend to reprimand or even fire employees. But banishment? That’s hard core. That’s where O’Leary truly shines. Of course, it starts with an O’Leary stunt, in which he suggests that copilots could be replaced with stewardesses. Well, a pilot offended by this notion suggested that O’Leary could be replaced with a ‘probationary cabin crew member currently earning €13,200 a year.'” Don’t tangle with the master: O’Leary shipped this pilot off to Lithuania! It’s not exactly Siberia, but it sure as hell isn’t the Portugal/Spain/Italy the pilot wanted. And, “Kaunas is considered Siberia for Ryanair pilots.”

5. He’s just that good: remember all those whining airline execs were complaining about their businesses during the global financial crisis? Well, O’Leary wasn’t one of them. He actually kept Ryanair profitable during that hellish period. And now, he doesn’t mind taking potshots at his competitors during his quarterly earnings calls!

Manhattan hot doggery Gray’s Papaya set to raise prices (again)

New York City hot dogs at Gray's Papaya

It’s murder, I say! Murder!

Well, I don’t say it … Gray’s Papaya does. The Manhattan hot dog institution is about to raise its prices once again. This will be the third price increase since I moved to the Upper West Side in 2004.

There’s a rather dramatic sign hanging in the window at Gray’s Papaya screaming, “MURDER!” It continues:

WE ARE GETTING KILLED BY THE GALLOPING INFLATION IN FOOD COSTS
UNLIKE POLITICIANS WE CANNOT RAISE OUR DEBT CEILING AND ARE FORCED TO RAISE OUR VERY REASONABLE PRICES
PLEASE DON’T HATE US

Okay, it’s hard to hate the folks who sell two hot dogs and a drink for a modest $4.50, though I was much happier when it was a dollar cheaper, back in 2008. Seven years ago, one hot dog cost only 85 cents. Then it skyrocketed, on a relative basis, to $1.25 in 2005, inching up to $1.50 three years ago.

%Gallery-126040%The deal, which still returns change for a $5 bill, is called the “Recession Special,” which took real meaning in 2008, as New York City suffered the shock of the financial crisis. Since then, as we have struggled toward a recovery that never really seems to come, the Gray’s Papaya Recession Special has been a fantastic alternative to … well, just about everything.

But, where will the prices go next?

It’s hard to say. The notice has been up for a few weeks, but I have yet to see any indication of price change. The guy working behind the counter said he didn’t know where prices were headed and that they would probably take effect in early June. I walked by a few days ago and didn’t see anything different.

There is a lesson in all this: buy hot dogs.

If you bought hot dogs from Grays’ Papaya in 2004 at 85 cents each, they would have nearly doubled in value by 2008. With all the gripes were hearing about food inflation, it’s pretty safe to say that we’ll see another big spike in 2011.

Hot dogs are the new gold.

I guess the only problem would be storing them. I do suspect, though, that hot dogs are like Twinkies – they last forever.

If you find yourself in New York, definitely hit Gray’s Papaya. If the prices are higher than you expect, try not to complain. It still really is the best deal in town!

Note: The space in the window at Gray’s Papaya seems to be reserved for political messages, as it once endorsed Barack Obama for president. Now, the company is sending a message about government spending and deficit management. Who ever knew that a dog from Gray’s Papaya came with a free civics lesson?

Another note: when prices were raised in 2008, I stopped at Gray’s Papaya on my way to work for a hot dog for breakfast (it’s sick, I know). There were television cameras set up out front. I didn’t know why. Well, it turns out that MSNBC was doing a story on the price increase. And, a good friend of mine, now my roommate, wound up being interviewed about it. He’s in this clip.

Hotels get beat up on the web as online travel agencies score deals

Hotels and online travel agenciesHotels were doing a great job of selling online before the recession hit. But, thanks to a healthy dose of innovation and greed, the global economy has been in rough shape, forcing those still traveling to hunt for deeper discounts and bigger deals. Unsurprisingly, this led to relatively strong market conditions for the online travel agent sector, particularly in the hotel space. For the hotel companies themselves, however, it’s been a bit rough.

According to travel industry research firm PhoCusWright:

The economic downturn has erased prerecession gains for hotel branded websites, as market pressures increase reliance on online travel agencies (OTAs). With occupancy still below 2007 levels and sluggish ADR [average daily rate] growth, OTAs will grow at twice the rate of hotel websites in 2010.

This follows proactive measures by hotels to improve their websites, with noticeable improvements leading to a 59 percent share of the online channel, according to PhoCusWright. Now, the suppliers are looking at a drop in share to 54 percent for 2010, with “similar growth patterns in 2011 and 2012 as hotels gain more control over OTA inventory.”

The battle of the brands, involving travel agents and their suppliers, is being engaged in the hospitality industry as well as the airline sector, it seems.

So, where do you think you’ll find your next hotel deal? Take the poll below to let us know!

The death of cheap tickets? Four factors to watch!

Will cheap tickets continue to be around?Are the days of bargain pricing over? There’s a lot of pessimism around this issue. After getting smacked around in 2008 and 2009, this year has been a good one for air carriers, and USA Today reports: “Airfares are on the rise again and unlikely to fall again anytime soon.” Yet, a travel industry recovery comes with advantages, as more people want to fly, and they tend to be willing to stomach higher prices. So, what’s the deal? Are we going to pay more (happily), or will 2011 means continued a continued prowl for cheap tickets, particularly online?

There’s no doubt that the airlines are getting more of our wallets. The U.S. Department of Transportation says that the average domestic ticket surged 13 percent – from $301 to $341 – from the second quarter of 2009 to the second quarter of 2010. That’s the fourth quarter in a row domestic fares rose.

Now, airlines are price-takers, not price-setters. What does this mean? They respond to what consumers are willing to pay … they don’t set the tone for the market (e.g., the way a luxury goods manufacturer would). So, if fares are shooting up year over year, a consumer willingness to pay is certainly implied.

Individual airline fare increases are pretty interesting, with United Airlines up 25 percent on average for is period and discounter Southwest adding 15 percent, on average, to every ticket.

According to USA Today, airfares are climbing for three reasons:1. Tension between capacity and demand: during the recession, airlines cut capacity in an effort to lower operating expenses and keep their margins from getting throttled. Available seat miles plunged more than 12 percent from the fourth quarter of 2007 through the end of 2009, according to the Air Transport Association. But, travelers are coming back. Demand is up, and there isn’t as much supply on hand. That pushes prices higher, even as airlines scramble to add capacity. Yet, available seat miles are up only 1.5 percent over the past year.

Why?

Airlines have been burned by market forces before when adding capacity too quickly. USA Today explains:

Having learned a bitter lesson by adding back too much capacity, airlines are exercising greater caution and restraint this time around. Additionally, bankruptcies and consolidations during the past few years helped contain capacity. Brands like Aloha, EOS, MAXjet, Midwest, Northwest, Skybus and ATA Airlines have disappeared as a result of consolidation or financial calamity and AirTran and Continental Airlines will soon follow suit.

2. Oil won’t go down: oil has been on the rise for a decade, moving from below $20 a barrel to above $90 a barrel, some of which came from the 2008 market shock. Someone has to pay for this of course … and it isn’t necessarily you. That’s the problem with being a price-taker: you can’t pass along all your expected or unexpected price increases to consumers. Now that market pressures are being eased, airlines can start to recapture some of these expenses.

3. The business is changing: according to USA Today, “so called ‘low-cost’ airlines look more like network airlines every day” – as a result of carrier merger activity. And, the increase in maturity comes with higher expenses. For example, these airlines are “rapidly expanding into larger hub airports or building their own”: that cost cash. It has to come from somewhere. It can also come with long-term costs that aren’t always easy to forecast:

Hub airports are often plagued with congestion, resulting in increased flight delays which can wreak havoc on aircraft turnaround times and utilization schedules, further raising operating costs. In recent years, Southwest has expanded into some of the most congested airports in the country, like Boston Logan, New York LaGuardia and Washington Reagan National.

4. There’s more to spend: the fact that there are expense pressures on airlines doesn’t mean that you’re going to have to foot the bill. The oil price factor, for example, has been around for a while, and it wasn’t enough to protect carriers from price declines. The fact that you probably have more discretionary income – or at least less perceived employment risk – means that you aren’t going to wince when you see a higher price. You’ll book with less lead time. It’s easier for you to spend.

What will be interesting to see is the extent to which consumers will be more willing to open their wallets. Even though having more cash comes with a bit of comfort in using it, memories may not be as short following this recession as they were in previous economic downturns. The recession kicked off by the global financial crisis in 2008 hurt. A lot. Unemployment was severe – and continues to be. People may not be as willing to pay big fares as they were in the past. Does this leave more market opportunities for online discounts – such as those offered by online travel agencies? That remains to be seen.

What do you think? Leave a comment to let us know! There’s no crystal ball on this one, and I’d love to get your thoughts.

[photo by atomic taco via Flickr]

Consumers spending again, travel included … but what’s next?

consumer spending on the rise, travel as wellWe know that people around the world are traveling again. U.S. travel exports are up, and the airlines are having a solid year (relative to 2009, at least). Meanwhile, two years after the financial crisis erupted only a few miles from where I sit now, people are spending money again. Consumer credit is once again the culprit, as Black Friday deals touted financing with long periods of interest-free money use.

Favorable deals are enticing consumers who don’t really have the money to spend, but they’re lured in by offers that are “too good to be true.” As Newsweek reports, “Old habits die hard.”

Consumer debt by household is down, and savings habits are on the rise, but the increase in spending from a consumer base so recently battered does make me wonder what comes next. Is borrowed money going to fuel growth in retail, consumer product and travel sectors, as it did through 2007? Is this a house of cards that’s waiting to collapse (yet again) when easy money dries up and the consumers find themselves as squeezed as they did in 2009?

Leave a comment below to let us know your thoughts!

[Thanks, @jasoncoletta, photo by TheTruthAbout via Flickr]