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September 2014 Newsletter

Editorial

EU Prevents more charges

People have their own individual views about the merits, or otherwise, of the European Union and indeed regarding anything that is harmonized within the European Union with regards to rules and regulations. There is one certain fact however and that is the fact that the travellers of Europe would be far worse of if it wasn’t for the ’greater Europe”.

American travellers and travel experts look in admiration at how the EU has brought many aspects of the travel industry to heel – unlike the laws concerning travel within the USA. European passengers are now entitled to compensation if the airlines ‘”bump’ them off a ‘flight’ and if their flight is delayed. Just for the record, airlines would routinely bump passengers off a flight as a matter of standard operating practice, with 110% of seats being sold routinely. Equally, now that flights are monitored closely by the EU, the age old airline excuse of bad weather to explain a delay when the airline was short of aircraft to operate its flights is almost consigned to the dustbin.

We also now have the EU to thank for another ruling that it passed this past month but which hardly made the media, yet is a ruling that will have made the airlines grimace.

That ruling was that whilst the EU courts agree that airlines incur costs in processing hold baggage and can therefore charge for this service, it considered hand luggage as being a ‘necessary” item for passengers to carry and therefore should not be charged.

Whilst one can argue that no-one in Europe charges for carrying hand luggage on board a plane, the practice of charging for hand luggage is coming to the fore in the USA. If the practice becomes accepted in the USA by travellers who are already used to a mountain of ancillary charges anyway, then for sure the practice would arrive in Europe shortly afterwards. The move by the EU has nipped this threat in the bud before it arrived.

Well done the EU.

 

Mark Thomas

Managing Director

HRG Bulgaria

 

No rush for Richard

Anyone planning a trip to outer space on board Richard Bransons Virgin Galactic spacecraft wont have been too ‘fazed’ with the news that it’s planned launch has been put back a few months to early 2015. The reason why they will not blink an eyelid was that Branson ahs been saying the same since 2004 when it was first due to launch!

Just for the record, in 2006 he also promised to give 3 billion USD over the forthcoming decade to combating “climate change’. To date he has donated just 234 million USD.

Maybe it’s the economic recession to blame?

 

Marriott’s cost out sourcing idea

The Marriott is to begin leaving ‘tip envelopes’ in 160,000 of its US hotel rooms to encourage guests to leave cleaning maids a tip. On the envelopes it will give the maids name together with a message ‘’ our caring room attendants enjoyed (!) making your stay warm and comfortable, Please feel free to leave a gratuity to express your appreciation for their efforts’’.

Why not pay them a decent salary instead?

Is this an early form of outsourcing costs?

 

Go East

The Pet Shop Boys sang “Go West” but it looks like in the future it may well be ‘Go East’ if you want a job in aviation. China will need 100,000 new commercial pilots over the next 20 years as well as 101,000 aircraft maintenance technicians. For the Asia Pacific Region in general the region is forecasted to need an extra 216,000 pilots and 224,000 technicians to keep up with the pace of airline growth.

That’s a lot of jobs.

 

Fares Fair

The taxi industry has never raised much of an eyebrow, until recently that is. Out of the blue its very existence has become threatened by technology driven smart phone apps that link to a shared car concept. The company Uber represents the new kids on the block, but they have incurred the wrath of traditional taxi companies who fear they may be driven out of existence. Traditional taxis in San Francisco, home to one of the first Uber services, have seen a drop of 65% in their use in the two years that their rivals joined the ‘moving people’ industry.

Whilst we all appreciate competition and the fact that this drives down consumer costs, one does question whether the playing fields are level?  Traditional taxis are regulated and pay taxes; are the new kids regulated? Who controls them and do they pay local and state taxes and licence fees.

The authorities in Frankfurt in Germany have just suspended Uber for two weeks until their legal and regulatory status is checked. The Service is also facing strong opposition in other European countries and it remains to be seen whether the new taxi business model will not only meet European legal requirements but also whether its business model will hold out.

 

 

Out of Tune

The logic of business appears to have been lost in Tunisia. What do you do when your tourism industry is struggling, your economy is in a mess and you have a negative perception in the eyes of the world? Answer – introduce a departure tax for travellers.

From October 1st, people departing Tunisia will have to pay a 30 dinars departure tax or about 12 Euro. The tax has to be paid at the airport or at a tax office but don’t take more than 30 dinars with you as you are not allowed to take the currency out of the country.

A sure way to discourage visitors to the beleaguered country.

 

Thai idea

Thailand is considering eliminating taxes levied on golf courses and spa’s in order to give its tourism industry a much needed boost.

Taking that as an idea, why can’t Bulgaria do the same thing to boost these two sectors of the travel industry that it gives much credit to for its high standards of offerings but does little else to boost participating numbers?

 

Tres stupid

In what must be the climb down of the year, Air France has proposed to end its idea to develop its low cost airline Transavia following continued strikes by its pilots. The strike action lasted two weeks with the long and short of the argument being that the pilots did not want Air France to remain a competitive airline in the future.

The current crop of striking pilots won’t need to worry though, by the time the airline is dead in economic and industry relevance, the pilots will all have retired on comfortable state pensions.

 

One for the green brigade

To coincide with the UN climate change summit, Finnair flew a plane to New York using a mix of oil and biofuel. The biofuel is actually recycled oil used in restaurants.

So the moral of this story seems to be eat more chips in restaurants!

 

A hotel a day keeps the doctor away

The Marriott Hotel Group plans to open 1300 hotels over the next three years which will add some 200,000 new rooms to its already bulging portfolio. The openings equate to one per day through until 2017.

 

A Jumbo squeeze

Air France and Lufthansa have both revealed that they are unlikely to order any more of the superjumbo A380 planes to their fleet. This is a massive blow to plane manufacturer Airbus who will now find it difficult to recoup their investment costs on the plane, so analysts say.

Whilst both Air France and Lufthansa have their own issues regarding their long term profitability; if there is any profit at all in the case of Air France, for Airbus all may not be lost however as invariably the knight in shining armour arrives in the form of a gulf based airline who will not sniff at the opportunity to buy some distressed “stock’, which in turn takes more business away from the likes of Air France and Lufthansa.

 

Prague tops Vienna

The cities of Prague and Vienna are both steeped in history and tradition. Vienna has long been in the public domain but Prague only recently came to the fore as a most visit destination. However, perhaps as a sign that the times are not only changing but they have already changed, Prague has more hotels and hotel beds than Vienna. This might explain why, using the demand and supply curves of economics, hotels in Prague are significantly cheaper than those in Vienna.