Editorial

Head Scratching

Politicians live in their own self-fulfilling world, but their actions impact normal people during the course of their every day life. Often their decisions create scenarios and self-fulfilling prophecies that then appear to justify their initial action, an excellent example of this comes from France. Air France has announced that it is to radically amend its domestic flight operations to and from Paris due to a “structural fall in demand on Air France’s point to point network”. To grasp the stupidity of this we need to take a step back.

During Covid when governments had to bail out national airlines, the loans came with strings attached; in Air France’s case it was that they should “get rid of domestic flights where a train can be used for journeys of less than two and a half hours”. Top marks to the green radicals, none of which have likely been involved in business. In the world of aviation, domestic flights are usually made up of 50% of passengers travelling point to point and 50% who are connecting onto another flight. If you get rid of any one of these 50 percent, the whole operational structure crashes. With the shame game imposed on travellers by politicians, passengers in France almost have their arms twisted to travel by rail; even when it’s not convenient. For example, in the case of France, does the train network you are forced to use actually go directly to an airport or do you have to change trains and even stations complete with all your baggage? So, Air France’s loss -which is obvious may well be another airlines gain.

If you are a rival airline to Air France why not put on more connecting flights from secondary French cities to your own hub? Think Lufthansa Group to alternative hubs like Frankfurt, Munich and Zurich. It’s simple business logic as the population of France – not just Paris – also want to travel to Dubai, Asia and The America’s, and don’t (these days) have so much nationalism in them that they will only fly Air France. At the same time, it should also be remembered that a domestic flight doesn’t just carry one’s own nationals on outward legs, they also carry visitors to France who need connecting flights to cities across France after arriving in Paris and rest assured, they won’t be shamed into taking the train complete with all their baggage after a 6/8/10 hours flight from where they departed: they just want to get to their final destination as quickly as possible.

What also is baffling is the fact that the French capital and main hub for the country, Paris is now reporting figures that are almost back to pre-covid levels and so one could reasonably conclude that business sentiment is fully in place. So, in that case why would you throw a spanner into the works by withdrawing some of the spokes of the wheel and thus turning commercial success into commercial failure? Maybe the naivety is thinking logically as anyone with a commercial background would think and the real deal is that by withdrawing airline seats from the market one of two things or even both may happen: 1) as people are forced to move onto a train, the rail fares increase as demand outstrips supply and the state makes more profit this way than it would out of the airline.  2) Air France has to cap in hand to its government for a bailout who in turn go to the EU who happily add the bailout money to the other handouts it gives to the state: which disappears. Cynical or many a true word said in jest?

Michelin Moves into Hotels

Smart Trolleys

Munich Airport has launched a trial of new baggage trolley technology at its Terminal 2. The “smart trolleys” feature a tablet through which passengers can scan their boarding pass to receive flight information and updates in real time.

Additionally, passengers can access information on shops and restaurants with the tablets also bringing targeted offers directly to them.

One wonders if this will also soon become the norm in our supermarkets?

An Unsurprising Delay

The European Union has confirmed that the launch of its new ETIAS travel visa system for non-EU visitors has been delayed once again, this time until 2025.

The system will operate firstly with new entry-Exit automatic systems called EES (these are in effect gates you see that never seem to be in operation at Sofia Airport), which when operable then allow the ETIAS system to be implemented.

The new time frame will see (in theory) the EES Gate system become fully operational in autumn 2024 and the ETIAS system coming into effect in spring 2025. Remember, this was originally slated to come into effect in 2021.

The system will require all visitors from outside the EU who currently have visa-waiver status, this includes visitors to the 30 European countries who are part of the scheme, including visitors from the UK and USA, paying a 7 Euro fee for the visa which is valid for three years or until the expiry date of the travel document. Also, worth noting is the fact that the EES system will replace the current manual passport stamping regime with an electronic registration system.

Other than that; it’s a great idea for revenue generation.

Whilst on the topic of technology and airports, it is now estimated that by 2025, 69% of airports will be using biometrics as a part of the security check when entering/existing a country. Get ready for it.

Courts Wrap Airline

It’s good to see airlines get their comeuppance from time to time and this time its American carrier Delta who have been forced to pay 30 million USD in a class action lawsuit. Some 14,000 passengers made a claim against the airline for the non-refunding of tickets during the covid experience. The airline tried using the age-old trick of issuing credit notes rather than actual re-paying the money back to affected passengers.

Delta obviously denied the allegations and made comments about how much they had paid back during the crisis but they didn’t mention how much they didn’t pay back!  The same trick was used by many European airlines who then made it almost impossible to either contact them or to request the refunding of tickets. IATA, the body that looks after the interests of the airlines, as opposed to the interests of the industry as a whole, were surprisingly quiet on the subject though one must remember that IATA are funded by the airlines.

Hotels Boom

Recent Newsletters have commented on the rise in optimism within the hotel industry as more and more hotels appear on the drawing board. To further support this notion, the latest lodging Econometrics report shows that there is a total of 1715 hotels either in construction or in the planning stage across Europe. This will add around 250,000 rooms to the European market. The UK leads the way with 322 projects which equates to 45,000 rooms followed by Germany with 211 projects and 35,000 rooms. Other countries in the top 5 are France 132 projects, Portugal with 127 and Turkey with 107.  As far as cities go, London tops the European list with 82 projects and 15,000 rooms.

During the first half of 2023, some 150 hotels opened across Europe which added 20,000 beds into the market with the figure expected to open during the second half of the year being 265 and 35,000 rooms: a significant increase.

Accor brand Ibis has the highest number of new hotels in Europe with 91 projects followed by Hampton by Hilton with 71 projects and Holiday Inn Express with 45 hotels.

Bansko Change

Skiers familiar with Bansko will shortly see that the popular Stradhite Hotel is re-branded to become a Four Points by Sheraton brand. Sheraton itself is now a part of the Marriott dynasty. According to our reckoning this will be only the second hotel in Bansko that sits inside a global hotel brand; the other being the Kempinski Bansko.

Sleep On It

The push by some to force/encourage people to use the train rather than to fly is always sure to garner media attention, travelling by train can indeed be a peaceful pastime – if you have plenty of time to spare. Assuming that you have and ignoring the possibility that a train ride may in fact cost more than the faster plane, longer train journeys are becoming a fashionable topic for discussion though the options for them remain limited. Night trains also fall into this category, one assumes the advantage of such trains is that the cost of a night’s accommodation is effectively paid to the rail operator and not to a hotel. Night trains are still limited but are increasing and there are plans to increase these options with more routes.

The European Sleeper train already operates the night train between Brussels – Amsterdam – Berlin and this will be extended in May 2024 to include Dresden and Prague. Plans are also afoot to run the night train to southern European destinations and also to Scandinavia.

Singapore Sting

Ever wondered where is the most expensive place in the world to buy a car, let alone rent one? It has to be Singapore. Before you can buy a car, you have to obtain a COE (Certificate of entitlement) which is a permit to allow you to actually buy go and buy a car. The cost of these permits can vary but they are auctioned every two weeks. There are different types of permits that are associated with the size of car you can buy i.e. small/medium sized etc. The cost of the permit to buy a small car is currently around 72,000 Euro whilst the permit for a large car is 101,000 Euro. Remember; that’s before you buy the car! This makes buying a car in Singapore multiple times more expensive than doing so for the same car in Europe and it becomes an almost impossibility for someone on the average wage of 48,000 Euro per annum.

The idea of course is that everyone uses the city states excellent public transport system. Whether this concept is effective is another question as there are still 1 million cars registered in Singapore out of a population of some 5 million. Urban planners across Europe freshly graduated and armed with their MBA’s will be drooling at the possibility of emulation.

Almost Situation Normal

The resumption of “’normal service” seems to be in full effect for the travel industry as August figures follow on from the July ones which show travelling numbers to be virtually back to 2019 levels. Whilst this news will not go down well in those areas where minority voices have had a dis-proportionately larger say than their actions merited, it is great news for the millions of people employed in all things travel.

In Europe, the airline figures show August to have delivered 96.6% of the numbers who travelled in August 2019 whilst globally this figure is 95.7%. It must also be remembered that China is only now getting back to a degree of normality. The full year forecast for Europe is that the figure of 95.5% will be achieved for Europe with a full recovery showing in 2024 which is one year ahead of the initial forecast of normality resuming in 2025.

Radical Change Ahead For Hotels

It’s a well-known (cynical) view that when there is nothing to do workwise, you create a task for people by giving them projects which in 90% of the cases become projects that end up either as door stops ( in the day when print copies were the norm) or they gather a layer of dust on the top shelf of the filing cabinet, or in modern terms end up as a file in Desktop. Whether the same applies to the project that the Intercontinental Hotels Group have embarked on, only tell will tell, but IHG want to reposition the IHG chain as a “Lifestyle” brand catering to “upmarket and business travellers”.  The focus being that the brand will incorporate “celebrating guest moments and introduce the concept of insider expertise”. The PR splurge goes on to describe how guests will be offered a more interactive experience including lobby libraries, displays and mobile chat-based concierge that layers over traditional concierge services by tapping into local knowledge across the inhouse staff. Breathe.

One would think that the interaction most normal people want is human interaction and not from robots and as for the local knowledge of staff, that’s great except that staff shortages across the industry mean staff are brought in from all four corners of the region and indeed the globe and hence their own local knowledge might be wanting somewhat.

The justification from IHG for this re-positioning is that they argue that 65 percent of luxury customers by 2025 are set to be Millennials and Generation X.

The concept sounds logical but is the flaw in the thinking the assumption that Millennials and Generation X people will want a lifestyle choice or will their perception of needs differ from the stuffy consultants who are nearing retirement age perception? There is also arguably two other potential flaws to the theory. Firstly, is it an American centric one with the assumption that the world all thinks and acts like an American? IHG is a UK based Global Hotel Group it should be noted, but policy and strategy can easily be influenced by across the water thinking. Secondly, people wanting a touch of luxury prefer human service and hotels who claim to be offering a true luxury product have staff/guest ratios that reflect this. Is the message from IHG that this generational thinking is now blown out of the water and luxury hotels will be “de-staffed” just like a budget rated hotel?

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