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February 2014 Newsletter

Editorial

The American habit of having a loyalty card for anything and everything is now also firmly entrenched in this part of the world. Many or indeed the majority of people who travel will have one or two airline loyalty cards and at least one or two hotel chain cards of the same type. The bad news is that although use of such cards is exploding, the ‘freebies’ or perks associated with them are becoming harder to attain.

There are simple reasons for this, airlines don’t have the spare seats to give away as seat capacity has been cut and slashed as the airlines themselves try to move from having red ink to black ink at the bottom of their balance sheet. Hotels likewise have had a tough time and they too have escalating costs not only with the cost of their operations but also with the cost of refurbishments, so they too are penny pinching and ‘give aways’ are not at the top of their agenda. Here though lies the anomaly because every airline and every hotel chain is desperate to have as many loyalty card holders as possible: why – because it is a proven fact that the majority of people sucked into the loyalty habit are more likely to rebook with you regardless of whether you are the cheapest or not. In short it allows more profits to be made out of such clients.

For those groups that provide the loyalty cards be they airlines or hotel or whatever, when they see statistics such as the fact that every twenty seconds in China someone signs up to the Starwood Preferred Guest Scheme (Sheraton etc), then there is clearly a lot of mileage left in card loyalty schemes.

Just to give an idea of how many members such schemes have; Delta has 90 million members of its awards or loyalty programme and Intercontinental Group has 76 million, these are more than the size of population of many countries.

For collectors of loyalty points related to travelling, do not expect anything for free for the days of free airline tickets and free five star hotel weekends are long gone for most collectors. With airlines the word ‘free’’ means you still have to pay the taxes which invariably is half of the overall ticket cost!  A more wiser way to use cards and to redeem points or whatever they wish to be called is to use them for room upgrades in hotels, or for free baggage or extra baggage on flights. Indeed the real benefit to card holders tends to be in soft benefits such as being given preferential seating or boarding on a plane or given priority on wait lists. Soft benefits of being a card holder for a hotel may be subtly better room allocation or simple upgrades; all things that don’t cost the provider a lot of money but which can buy the loyalty of a card holder.

 

Mark Thomas

Managing Director

HRG Bulgaria

 

Landmark Trademark

The iconic Sydney Opera House is to be protected by a trademark in what is a legal landmark for Australia. This will prevent souvenir shops from selling Opera House based gifts unless they pay a licence fee.

Last year, the Australian authorities commissioned an evaluation of the arguably Australia’s most famous landmark and the valuation of it came out at 4.6 billion Australian Dollars         (3 Billion Euro’s). The building is also credited with creating 8500 full time jobs.

 

Windowless Future

The designers of a new supersonic jet are planning to do away with windows as they argue they only slow down any such machine. Instead of windows, cameras on the outside of the aircraft will display external images onto screens inside the plane.

Spike Aerospace are the people designing the supersonic jet which they claim will be able to transport passengers from New York to London in three hours. Launch is planned for 2018 but don’t back your life’s savings on it.

 

Out of Hours!

The somewhat low profile hi jacking by an Ethiopian pilot of his own passenger plane won’t have raised too many eyebrows but a side event may have done.

The hi jacked plane was ordered to fly to Geneva but the Swiss Authorities had to call in French fighter jets to escort the plane down because the Swiss Air Force had finished work for the day! Apparently the Swiss Air Force were notified at 4.30am but only work office hours starting at 8am.

Anyone wishing to invade Switzerland please take note.

 

Fine for Service

The US Transport Department has fined Korean airline Asiana 400,000 USD for its role in last years San Francisco Airport crash that killed three people. The fine was given because of the time it took the airline to both set up a free phone number for friends and relatives to call as well as the time it took them to contact the families of those onboard.

 

 

Snake Trick Backfires

An Hilton Hotel in Basingstoke in the UK failed to see the funny side when a guest filled in that he was bringing a ‘large snake in his trousers’ in response to an online hotel question about bringing pets.

Whilst others might view the response as either being childish or just idiotic, the politically correct fun avoiding grey people at the Hilton decided that amusement is off limits and they banned him from the hotel for life.

 

More and More

Whilst people now accept Low Cost Carriers as being a part of the furniture, it is interesting to note their continued rise and rise of their market share. Here is a look at how they are growing in different regions across the world in terms of seat capacity:-

 

2012                2013                +?-                   %

South America 52.7m              52,4m              -0.3m               -0.6%

North America 151.8m            154m               +2.2m              +1.5%

Europe                         180.6m            182m               +1.4m              +0.8%

Middle East                 11.5m              13.5m              +2m                 +17.7%

Africa                          3.8m                4.3m                +0.5m              +13.1%

Asia                             100.4m            129.3m            +28.9m            +28.7%

 

Getting cheaper at the front

BA have great Business Class offer for anyone wishing to treat themselves to a bit of luxury when flying between London and Sofia or vice versa. A return business class ticket is available including all taxes from 419 Euro for Sofia departures and for 387 Euro for London departures.

Tickets can be used until January 2015 but need to be booked by 11th March 2014.

 

It’s Murder

Why people seem to feel obliged to change a well known and respected name is

always a strange one. The latest scratching of the head revolve around the prestigious Orient – Express Hotels Group which will re brand itself as Belmond.

We are sure the 5m USD costs associated with the re-branding will be needed in order to change a good name into a not so good one.

 

 

Lost and Found

How forgetful are we? Quite a lot it seems if you listen to stories of what people leave in hotel rooms. Of course there are the usual false teeth and false limbs but perhaps the more extreme items are the keys to a Bugatti Sports Car and a 50,000 GBP Rolex watch.

Apparently working as a chamber maid in some five star hotels also has its perks such as being able to keep large sums of money that are often left there; the only proviso being the money has to be guarded for a reasonable amount of time before it goes back to ‘’finders keepers’’.

 

Stripping Back

The way to make money on long haul flights between Europe and North America has always been to sell as many First and Business Class seats as possible. It now seems that this theory may now be under threat as Delta, which has no First Class Section, also plans to reduce the size of its Business Class cabin so that it can squeeze in more Economy seats. This way it believes, it will make more money.

In short 12 seats are to be taken out of business to be replaced by 20 economy seats. Delta also states, perhaps worryingly for other airlines, that more and more people are reluctant to pay the costs associated with sitting at the front of the plane.

 

Delayed yet again

German Rail Operator Deutsche Bahn has yet again been forced to put back, this time indefinitely, its plans to launch rail services between the UK and mainland Europe.

Already delayed until 2016, the omens do not look good for the intended operation as Deutsche Bahn blames continued technical issues connected with the new trains being developed and the high costs of using France’s high speed tracks.

What also seems to have been omitted is the fact that UK bound passengers need border clearance in mainland Europe and perhaps the costs associated with this and who would pay for it have cooled Deutsche Bahn’s intentions somewhat on the new service.