LetMeGo to pit hotels against each other directly

by Tom Johansmeyer on

Normally, I’d think that a website inviting hotels to beg for bid on the insane and detailed requests of travelers would be a nonstarter. But, we’re in the middle of a brutal travel market recession. And, this decade has been awful for airlines and hoteliers alike. So, if the industry is going to learn any lessons from this turbulent decade known as [well, nobody really figured that out what to call it], the first should be that it needs to make a regular practice of going every extra inch to pull in a new guest.

So, the success of new business LetMeGo.com, which will create a marketplace in which travelers can indicate the specific amenities they want – from bunny slippers to cheese plates – will depend on whether the travel and hospitality industry has figured out that it will always be prey to a fickle economy. If the service providers in the hotel business realize this, they will understand that the extra effort is necessary, even when the travel market is on fire.
Using LetMeGo.com’s website, which is still in beta, companies peddling hotel rooms, vacation homes and other forms of lodging will be able to view the itineraries posted by prospective guests. They can bid for the affections and dollars of these travelers, with this data being used by the traveler to make a decision. The process is completely transparent to the participants – every bidder can see each other’s bids, and the user, of course, can sell all bids on his itinerary. But, it isn’t open to the public, as nobody needs to know what you’re looking to spend on your vacation. Since everyone can see each other’s offer, there’s incentive to cut further to attract your interest cash.

According to VentureBeat, “a good number” of lodging companies have signed up for the service and there’s already an affiliate program in place to drive traffic to the site. Could this be the future of the hospitality business? I can think of worse. If the site takes off, it will be easier for hotels to identify exactly what their guests want, deliver on it and use it as a way to differentiate themselves in an increasingly competitive market.

So, the future of winning online travel cash will involve head-to-head competition, with everything out in the open. If I were one of the competitors, I wouldn’t be thrilled about this, but there’s no better experience for travel buyers: it’s designed to help us win.

Tourism industry in The Gambia gutted by global recession

by Sean McLachlan on

We all know the global recession has hit the tourism industry pretty hard, but smaller countries off the beaten path are feeling it worse, and are less able to bounce back.

The Gambia is the smallest nation on the African mainland and has a modest tourism industry based around its beautiful beaches, serene river, and two UNESCO World Heritage Sites, including the mysterious stone circles pictured here. Unfortunately, Mr. Alieu Secka, president of the nation’s Hoteliers Association, says there’s been a 50% drop in arrivals for the 2009/2010 season. A quick check of several leading hotels revealed the figure to be more or less accurate.

Ouch.

The Gambia is not a rich nation, and such a plunge in the industry will threaten jobs and businesses, creating a knock-on effect as families have to support the newly jobless.

Is The Gambia the proverbial canary in the coalmine? Will other small nations get hit this hard?

Hopefully I’ll be going to The Gambia in 2010. My wife, who is very supportive of her wandering husband, gave me a flight there as a Christmas present, so assuming I don’t trade it in for a flight somewhere else to visit my friend as he motorcycles across Africa, I’ll be able to give a firsthand report. Perhaps I’ll bring along some extra money to spend. The Gambians deserve it.

In case you’re wondering, I got her an espresso machine. She didn’t want to go to The Gambia with me so I guess she’ll just sip espresso at home and read my blog posts.

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.

Passengers to become drivers for Thanksgiving this year

by Tom Johansmeyer on

We aren’t staying at home, but we’re definitely not flying. That’s the word out of AAA this year. Thanksgiving, always a travel-heavy holiday, will see more cars in the road than people crammed at the gate, as travelers respond to the recession and recent increases in airfares.

AAA puts the number of people driving 50 miles or more from home for Thanksgiving at 38.4 million — up 1.4 percent from last year. The number of people traveling by car (regardless of distance) is set to edge 2.1 percent higher. Meanwhile, the number of people taking to the skies is expected to drop a hefty 6.7 percent. The Air Transportation Association sees the passenger count dropping 4 percent, but that’s for the “holiday period,” which stretches from November 20 to December 1. “Economic headwinds” are the primary reason, the ATA says.

The economic situation’s role in the decision to drive versus fly isn’t limited to the change in prices. Airlines have been pushing their fares up for the past few weeks, but for consumers, the decision is based on cost relative to their willingness to spend. Rick Seaney, CEO of FareCompare.com, tells MSNBC, “A leisure traveler might have bought a domestic ticket for $350 last year. Lately, $250 has been the breakpoint; above that, they just weren’t going to buy.”

If your flight looks crowded this year, it’s probably because there aren’t going to be as many planes in the sky. Only 679 billion domestic seat miles will be offered this year, down from last year’s 730 billion, which was already cut from the year before. From 2008 to 2009, the number of available seat miles is off 7 percent.

While the economic climate is certainly a factor, AAA sees other drivers in the trend from wings to wheels. The cut routes and flights, delays and the security gauntlet have all contributed to the decline in Thanksgiving passengers since 2000 of a profound 62 percent. If the airlines didn’t think they had competition for the Thanksgiving season rush, this is an answer that can’t be ignored.