Hawaii needs your help!

by Tom Johansmeyer on

Hawaii needs $1.23 billion and could use your help. Governor Linda Lingle is calling it a “fiscal crisis” and says it won’t be fixed with budget cuts alone. Essentially, the fiftieth state wants everyone else to chip in. This year’s budget gap is $721 million, which will be followed by $509.5 million next year. The state might not hit pre-recession levels until 2014.

According to Lingle, “The stark reality of continuing declining general fund revenues means the state does not have sufficient resources to cover all expenditures.”

The problem is exactly what you’ve seen here on Gadling for a while – the travel market sucks. Hawaii relies on tourism to bring in the cash; the industry touches 74 percent of the state’s jobs directly or indirectly (at least as of 2007).

Georgina Kawamura, the state’s director of budget and finance, tells Reuters, “I can only remain hopeful that we are now at the bottom and will start to pick up.”

Virgin America: Financials prove service makes a difference

by Tom Johansmeyer on

We’ve all gotten used to bailing out airlines that can’t figure out how to take care of their paying customers, operate profitably or otherwise get their respective acts together. And, there really isn’t much hope of this situation changing. To be an airline, in general, is to be dysfunctional … until you look at the new entrant, Virgin America. The privately held carrier announced on Friday that its revenue surged 38.3 percent from the third quarter of 2008 to the third quarter of 2009.

The airline has amassed a collection of awards to back up its commitment to customer service, including “Best Domestic Airline” in Travel + Leisure‘s 2009 World’s Best Awards and “Best Business/First Class” among domestic airlines in Condé Nast Traveler‘s 2009 Business Travel Poll. And, the fact that the 1,500-person company is adding jobs in this market — beating both the recession and its worsened form in the travel business — suggests that it is possible for an airline to not just survive but actually succeed.

David Cush, Virgin America’s President and CEO, says, “Despite an uncertain economic climate since our 2007 launch, we’re pleased to report steady and strong financial performance and our first quarterly operating profit.” He adds, “At a time when flyers are more discerning than ever, it is clear that our low fares, award-winning guest service and innovative amenities continue to convert a growing network of loyal travelers. We look forward to bringing our unique value proposition to more travelers as we grow in 2010 and beyond. ”

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But, enough of the soft stuff — let’s turn to the numbers. That’s where you’ll find the truth in these matters. Cost containment and operational efficiency helped Virgin America post a record load factor of 86.6 percent, an increase of 5.2 percentage points year-over-year. Costs per available seat mile were pushed down 33.9 percent (24.4 percent ex-fuel), and operating income swung from a $54 million loss in the third quarter of 2008 to a $5.1 million gain this year. Along the way, Virgin America realized a mishandled baggage rate of 1.18 per thousand — three times better than the industry average. And, it attained an on-time rate of 87.2 percent.

Sorry to go “quant” and dwell on the numbers a bit, but they speak to a common theme here at Gadling: whether the airlines are doomed to fail … and be propped up by the government taxpayers and fail again … and so on. Virgin America’s proved that an airline can amass 1.1 million loyalty program members and fly 5.8 million passengers in just over two years and still find a way to get into the black. There is probably market share gain in this airline’s future, but it is making a big mistake: by not screwing up, it’s taking a pass on all the free money the feds are more than willing to give to an industry that refuses to help itself.

Relative stability brings tourists back to Zimbabwe

by Sean McLachlan on

For a while now most news out of Zimbabwe has been bad. Gross mismanagement by President Robert Mugabe led the country to financial ruin and hyperinflation, with people using gasoline as currency because nobody wanted the government’s $50 million dollar bills.

But with the return of relative stability thanks to the new unity government, tourists are coming back to Zimbabwe. The nation’s Council of Tourism reports that 362,000 people visited Zimbabwe by August 2009, up from 100,000 in the same period in 2008. It wasn’t clear if this figure only counted tourists or all foreign visitors. A decade ago, Zimbabwe raked in $250 million annually in tourism revenue. That dipped to just $40 million in 2005, but has risen to $100 million since the unity government came into power in 2008.

However the numbers are created, it’s still good news. With the country’s economy in shambles, an influx of foreign currency is sure to help. The government has been offering tax incentives for companies wanting to invest in Zimbabwe tourism. And with attractions such as Victoria Falls (pictured here) and abundant wildlife, if you’re looking for good deals on an African trip you may want to consider Zimbabwe. They’ll certainly be glad to see you.

Tourism experts say discounts, economic upturn will make 2010 a good year

by Sean McLachlan on

It’s no secret that 2009 has been a rough year for the travel industry. With everyone tightening their belts, discretionary expenses like holidays are often the first thing to go. But industry leaders meeting in London for the World Travel Market say 2010 is looking better.

Cautious optimism about the economy is one cause for this brighter outlook, but travel companies know positive indicators such as increased productivity and exports don’t necessarily translate to more money being spent on travel. What will also help is the shift to more budget travel options. Tour operators have been choosing budget airlines and more modest hotels in order to offer lower prices, and some budget companies have actually seen an increase in business. This trend will continue into 2010, experts say, which is good news for people who want to get away from it all without spending it all. An increased emphasis on budget travel will keep people moving and hopefully encourage them to choose more luxurious options once we get into another prosperous period.

The travel industry is certainly looking for a silver lining around the tsunami that hit it this year. A report released at the World Travel Market estimates there will be an 8% drop in global travel bookings this year, as well as a 14% drop in airline passengers and a 16% drop in hotel bookings.

With figures like that, 2009 will be an easy act to follow.

Everyone wants to go to the U.S.: posts highest scores in brand survey

by Tom Johansmeyer on

Step aside, Australia: travelers now prefer the United States. A report by consulting firm FutureBrand shows that the United States’ Country Brand Index topped Australia, which usually has the top spot. The survey collects the thoughts of around 3,000 international business and recreational travelers, measuring how various countries are perceived. The report credits President Obama with driving the increase, since a decent dose of anti-American sentiment around the world put some pressure on the countries performance in the rankings.

The United States ranks best as “ideal for business,” but it lags in many of the 29 other categories. Japan and the United Kingdom score higher for nightlife, and Singapore beats the United States as a shopping destination.

Even with the high score, the Department of Commerce expects visits from abroad to fall 8 percent this year, thanks to an awful global economy.

Interested in seeing the whole top 10 list? Check for it after the jump.

1. United States

2. Canada (hosting the Winter Olympics next year)

3. Australia

4. New Zealand

5. France

6. Italy

7. Japan

8. United Kingdom

9. Germany

10. Spain

[Photo by Diacritical via Flickr]