Editorial

Back to the future

Whilst digging through old Newsletters dating back to 2022, it is interesting to read the editorials/main articles from the first months of that year and to examine how relevant or not they are today. The February editorial of course commented on the nutter in Russia and the geo political game he had started. It’s hard to recall whether this was predicted to be a short game or a long one, but here we are two years later and the opinion is that not only is it going to be a long game, it’s a game that is going to become dirtier, wider and greater in geo political terms: think Russia in Africa and then add in China to the equation with its own eye on the worlds reaction to current events  as it also seeks to show its muscle in both Asia and Africa, which without seeking to exaggerate, it already controls a large chunk of. In April the focus was on the calamitous way Covid was dealt with by authorities and the way in which all and sundry clambered onto the narrative to get their two minutes of fame and also earn a few bucks during the process. As current enquiries into how the pandemic was handled rumble on at further cost to the tax payers, the evidence is clear that so called “’experts’” were little more than chocolate fireguards. Research shows that pre-departure testing requirements for travel to detect Covid were totally ineffective and any country who banned or restricted travel to its shores fared no better than those who took little or no action i.e., there was no distinguishable difference in the impact of the virus and how it was transmitted. The only effect of the restrictions on travel was to create significant economic hardship for many. So called experts were armchair experts, but logically thinking how can one be an expert in something they had never dealt with before? Nobel Prize winner and economist Daniel Kahneman in his book ”Thinking, Fast and Slow” cited the fact that decisions made by the human brain when forced to think fast, generally make the wrong decisions. One of the summaries of this part of his work is that academia now knows “how shockingly poor experts are at making predictions for the future”. The acclaim of being an expert was carried with aplomb in the early days of Covid, as we look back in history, that acclaim is now perhaps one that may wish to be discarded. Onto May and the feature then was how Bulgaria would react to joining the Eurozone as it was once again promising (threatening) and in particular, what impact this would have on the country’s Tourism Industry.

This month’s newsletter and indeed the past few editions have articles that comment on the continued boom in travel and the unrelenting demand for it despite the challenges of the world. Looking at these three aforementioned editorials and how they have or have not impacted travel sheds some interesting light on human behaviour.

From the February 2022 feature, the world is in a far more dangerous place now than it was two years ago and yet despite this and despite the fact that a chunk of Europe is off limits to flights and a large population is partially isolated from travelling easily, the people of Europe still travel; airlines and hotels make record profits, more planes are bought by airlines and more hotels are opened to satisfy demand. This may perhaps be explained by the fact that the cynicism highlighted in the May feature has, to all intents, been proven correct. This seems to particularly true when it comes to two groups of people; firstly there are those in the second part of their adult hood and which encompasses the baby boomers. These people are not only more questioning of society, they are cynical of politics, politicians and big business. In their eyes the world is opaque and they have the experience of life to believe little they read or see in the media. Theirs is the voice of experience and also significantly the voice of the silent majority, what they also have is a sizeable disposable income and if they want to travel, travel they will and not even radical environmental ideologists will stop them. The second group comprises of young people who are untainted by the world thus far and who were largely reticent of inoculations in the first place. They are less responsive to authority and if they want to go away to party in the sun or for the weekend: they will.  It is these two groups who have played a significant role in the resurgence of travel.

So, where does the May feature sit with all this? The answer is that Bulgaria is bouncing back with its own Summer and winter tourism offerings and this sector has undergone massive investment over the recent years to bring it up to European levels of expectancy. The local tourism product has a reputation for providing value for money under pinned by the Lev as the national currency, a currency that means very little outside the country. As the clamour in certain political sectors is to join the Euro club as quickly as possible seems to be moving along at speed these days – for which there are arguments both for and against this stance – the clear and obvious danger is that Bulgaria will price itself out of the market in not only tourism, but also in other industry sectors as costs inevitably rise when a country adopts the Euro. The country’s tourism sector may have shown itself to be resilient, but it may already be at a potential crossroads as the fact dawns on many that it is arguably better value for money to ski in Austria and Italy. When the summer season cometh this year, there is a reasonable degree of certainty that the summer will be positive with numbers to match. The issue comes after that when the costs of a holiday in Bulgaria are toted up and then these are compared with alternatives. One of our articles this month mentions the fact that revenue spent in accommodation in the country for December increased by 19.8% year on year, with visitors also up by 4.3%. To make sense of these numbers, If you are an optimist, you will note that room rates in accommodation have increased year on year by 10%, if you are a pessimist, you will say the figure is circa its 20%. So, what does that’s ay about the December revenues?

If there is any moral to the story, it is that the purported death of the travel industry is somewhat exaggerated, despite the wish of some. In fact, just the opposite prevails and that despite all the barriers and hurdles that are placed in front of travel providers and travellers alike, stifling human desire has never achieved longevity.

The Future is Bright

Online Risk

The era of technology is also the era for scammers and most people at some point or other, whether they realise it or not, will have been targeted for a potential scam. The travel industry is far from immune to such attacks and indeed it is just the opposite as more and more people travel and use more and varied sources to book their travel. Even high-profile household names in travel can be caught up in the cycle even if they themselves are not the target. Scammers have been targeting hotels who feature in Booking.com systems to gain the contact details of people with forthcoming bookings. The scanners then contact those travellers requesting payment which is directed to accounts in places like Russia and Moldova.

As computers are now very much a major part of our working day and we are all deluged with emails et al., its very easy to make an error and only realise it when the damage is done. Perhaps the message here is to take your time and always think twice. Or maybe perhaps use an agent who assumes responsibility for the booking?

A Place in the Sun

Ever wondered where to go to when its grey and cold at home or, ever thought about re-locating to a more favourable climate? The rankings of Europe’s sunniest cities and their average monthly temperature (note “’average” as opposed to highest) make interesting reading with Spanish cities being prominent: –

Rank     City         Country                         Avg. monthly sun hours             Avg. Monthly Temp.

1. Alicante           Spain                            349                                           19
2. Catania            Italy                               347                                          20
3. Murcia             Spain                             346                                          20
4. Malaga            Spain                             345                                           20
5. Messina           Italy                               345                                          19
6. Valencia           Spain                            343                                          20
7. Nice                  France                         342                                           17
8. Las Palmas       Spain                           341                                           20
9. Granada            Spain                           341                                           17
10. Palermo             Italy                             340                                          19
11. Seville                Spain                           340                                         21
12. Zaragoza           Spain                          340                                          17
13. Marseille            France                         339                                         17
14. Barcelona          Spain                            339                                        18
15. Palma de Mallorca Spain                      337                                         19
16. Tirana.                Albania                        336                                         17
17. Rome.                 Italy                             336                                          18
18. Athens.              Greece                        335                                          20
19. Madrid.               Spain                          335                                          18
20. Naples.               Italy                             334                                          19

Just for the record Sofia comes in at number 24 with 327 hours and an average of 12 C.

Electric Blues

Whilst the narrative remains that using Electric Vehicles will save planet earth and undoubtedly there has been a significant increase in the number of electric vehicles we see on our roads – especially second-hand Tesla’s here in Bulgaria whose original owners obviously had seen enough of them – electric vehicles are anything but the flavour of choice for many. A recent survey by our own BCD network revealed that 81% of car hire users do not book electric cars. The reasons for this are several but the two key reasons are lack of availability at rental offices (35%) and the poor range of the vehicle (33%).  What is alarming also is that of those that do book an Electric vehicle, 29% wanted to simply try one!  That of course could lead the user to hire or even buy one if the experience is positive, but it may turn them off for life if that experience is negative.

At the same time, Hertz has announced that it is selling 20,000 of its Electric Vehicles in the USA – roughly one third if its global fleet – due to higher maintenance and repair costs and is replacing these with petrol powered cars. The upshot is that it is clearly still a challenge to promote electric vehicles in the car hire sector as there are not only maintenance and repair considerations, but also the challenge of charging infrastructure and range to consider.

A recent random motoring article by a non-aligned source revealed that it took around 100,000 kms of driving before an electric car became more economical financially than a petrol car, though that’s not an article nor a fact one expects to be widely publicised in the mainstream.

Time to Bunk Off

A potential revolution is taking to the air in autumn when Air New Zealand launches its ’bunk beds in the sky’ with its Skynest product. Unlike the First or Business Class offering which is usually found at the front of the plane, this new offering is designed for Economy Class passengers. The concept is that passengers can book a ”pod” for four hours which will cost around 250 Euro per session. It has not yet been revealed which routes the new concept will launch on but the smart money would be on the Auckland – JFK route which is one of the longest routes in the world at around 16 hours duration. Flights to Los Angeles also take around 13 hours. Indeed, many of Air New Zealand’s routes are in excess of 10 hours with even a flight to near neighbour Australia taking three hours.  The distances involved in the airlines network mean travelling in economy class becomes something of an endurance test and the idea of the bunk beds would, at the outset at least, appear to be a sound one and one that is more affordable than a business or first-class ticket.

Note: beds are all single!

The Meaning of Figures

The revenue generated by accommodation providers in December increased 19.8% year on year according to figures from the National Statistics Institute. The total amount being 89.7 million Leva of which 62.2 million came from domestic visitors and 27.5 from non-residents. At the same time the number of arrivals increased by 4.3%.

So, all well and good then. So, if the public perception based on first-hand experience and also the sentiment from the travel industry is that prices have increased by 10% at the very least and 20% might be closer to reality, does this indicate the country has seen a real increase or otherwise?

Dubai Shows the Way

Up to the end of the last Millennium, the UAE and in particular Dubai, would hardly figure on many peoples tick box list of vaunted tourist destinations. The rise and continued rise of both the UAE and Dubai is mind boggling and perhaps above all else, shows what can be done when all hands work together and not against each other. In 2023, Dubai alone recorded its highest ever visitor arrivals with 17.15 million visitors, an increase on the previous record set in 2019 of 16.73 million. The average occupancy of the hotels in Dubai was 77.4% and this includes an increase in rooms compared with 2019 of 19%. At the end of 2023, the total number of hotel rooms available was 150,291 in 821 hotels and the total number of room nights utilised was 41.70 million nights, compared with the 2019 level of 32.11 million nights. The average room rate per night in Dubai in 2023 was 135.38 Euros per night.

What is also worth considering is the impact and contribution tourism has on the Emirates GDP which showed an impressive 3.3 growth at a time when other countries struggled to get out of red figures. It’s also worth noting that Dubai hosted many mega events during the year such as the Gulfood event which attracted 134,000 visitors and 5000 exhibitors, Gitex with 170,000 visitors and 6000 exhibitors and the Arabian Travel Market and the International Boat show which attracted 40,000 and 30,000 visitors respectively. Dubai also won a record 349 bids to host international conferences, congresses, meetings and incentive programmes over the coming years.

That’s how to manage tourism!

Paris Prices to Soar

Paris is to hike the cost of its Metro tickets during the Summer Olympics which will be staged in the city between 26 July – 11^th August this year and between 28 August – 8 September for the Paralympics. I single ticket will increase from 2.10 Euros to 4 Euros although a new Paris Olympics pass will be available for 70 Euros per week. The new charges will only apply to tourists though as locals with metro passes will still travel as normally.

In the grand scheme of things, these inflated charges will be a drop in the ocean compared with the price gouging that will take place at hotels and at restaurants. Of bigger concern will be the French nation’s ability to manage such an event with recent attempts at hosting high profile events such as the Champions League Final and the Rugby Final at times verging on chaos. One can hope the French capital has learned from its recent failures (though that is questionable) and allied to this is the never-ending threat that Paris street gangs create as they target visitors to such high-profile sports events. A fact the city finds hard to deal with despite its reputation for strict policing.

A Charge to Come

It is often said that the best revenue earning schemes derive accidentally. This may well be the case with Amsterdam’s Schiphol Airport whose operating capability almost collapsed a year or so ago due to staff shortages. The aim of the airport initially was to restrict the supply (flights) to therefore reduce demand (passengers), to at least allow some continuation in airport operations. Whether directly because of this or otherwise, an Einstein in the airport system realised that just as with airport lounges, travellers want to be away from the madding crowds and to have the privilege of not being forced to queue. Enter the concept of “Pre-booked security time slots”. Amazingly, the airport has already seen over 1 million passengers use this service since its conception in March 2023.

The service is free of charge with passengers able to reserve slots online up to three days before departure. They are then sent a QR code which can be scanned at the airport by a member of staff. Time slots are open for 15 minutes with the most popular slots being those 90 mins and 105 minutes before departure.

So why does the first sentence comment “the best revenue earning schemes derive accidentally”? Its not going to be very long before the airport realises, they are onto a winner here and now that travellers are hooked on the system, they will be more than willing to pay a nominal amount for the same pleasure. Like most things, nominal eventually ceases being nominal, but the habit is set and the service becomes a vital line on the P/L column.

Vienna Expansion

Vienna Airport has long been a popular choice for local travellers who need to make connecting flights to their destination and Austrian Airlines itself has always played a prominent role in Bulgaria’s connectivity with the rest of Europe and indeed the world. The airport remains a popular choice with travellers and itself has been extensively rebuilt over the past decade or so. That expansion is now taking another step further with a 420 million Euro extension to the main Southern Terminal. The project work is not expected to be completed until 2027 and will see the airport optimising thermal insulation and an electricity supply party derived from the airport’s photovoltaic facilities.

If you’d like to subscribe your friends or colleagues and for all your travel requirements, reservations or for more information about any of the items mentioned in the newsletter, please contact us:

Tel:+ 359 (2) 943 3011;
Fax:+ 359 (2) 946 1261;
e-mail:mark @jamadvice.eu