September 2024 Newsletter

September 2024 Newsletter

Editorial

A World With No Airbnb

The rise and rise in popularity of Airbnb properties might be reaching a finale. As tension mounts in many tourist hotspots, the concept of staying in an Airbnb might have had its heyday. Barcelona is the latest city to take action, announcing that from 2028 it will ban short term rentals in an attempt to put around the 10,000 Airbnb properties back into the housing market. Barcelona is only the latest and not the first to take action. It has been illegal since September 2023 in New York City to rent out an apartment as a short term let unless you are registered with the city and you are present in the apartment where the guests are staying. Berlin banned Airbnb’s and short-term rentals in 2014 before bringing them back into the fray but under tight restrictions in 2018. In California, coastal cities including the likes of Santa Monica, short term rentals are either banned or highly regulated.

Its not just Airbnb who are coming under scrutiny although, their 50% market share means they are the facilitator that garners the most attention, other well-known brands like Expedia and Booking.com are also in the target sights of various authorities.

Its hard to believe but this mode of accommodation in its current guise has only really been around since 2007 when Airbnb started operations and clearly its popular with some segments of the population, but the evil enemy for others. So, what do we gain and what do we lose without a short-term rental market?

Its is argued that staying in such accommodations gives one a more authentic feel of a place and the prices tend to fit more pockets than a hotel would do. Also, such accommodations are ideal for families who have two or more children and who want to travel but also want a degree of flexibility. Whilst having an authentic feel to a place is generally a positive for most travellers, if you take Malaga as an example, it was found that in the central area of the city, some 25% of all apartments were being used for short term rentals, so the question begs how authentic is it really?

London has, apparently, the most short-term rental properties with a supposed 150,000! A staggering number whilst the UK has 500,000 properties available in total for short term rent! Spain though is regarded as being at the epicentre of “over tourism” with the likes of not only Malaga impacted but also Barcelona, Mallorca and the Canary Islands. Local workers are squeezed out or forced to pay between 1200 – 1300 Euros a month for rent when the average salary is 1600 Euros!  As local people are forced out, the feel of any city is thus changed irrevocably.

Not wishing to dwell on Spain on this subject, on the other side of the fence is the fact that tourism contributes some 13% to the GDP of the country or translated, that’s 200 Billion Euros! A fine line has clearly to be trodden. The answer to the problem is arguably not banning such types of tourism, but regulating it. Berlin for example restricts owner-occupiers to 90 days short term rentals a year.

Whilst this debate rumbles on, watching carefully at the periphery are the hotels! Less accommodation stock in the form of short-term rentals will mean an increase in demand for hotel rooms and that means its rub hands in glee time for hotels. New York Hotel rates are typically 300 USD per night on average, helped in no small way by the restrictions on short term places to stay. Europe has more hotels planned in the pipeline than ever before and it may well be they can’t be opened soon enough. The bigger picture question though will be, who wins and who loses ultimately if tourism shrinks in a location or a country?

Mark Thomas

Managing Director

Jamadvice Travel  |  BCD Bulgaria

Surprise Surprise

The long awaited and much delayed EU Entry-Exit System (EES) which was due to launch on November 10th looks like it is to be delayed yet again. Apparently, some countries including France, Germany and the Netherlands have expressed concerns about its implementation due to a lack of testing. So, the bottom line is that it looks like another delay is in the cards.

The EES in simple terms is an entry/exit for passengers from outside the EU that will operate digitally. The requirement for passport stamping will be removed and replaced by digital photographs and fingerprints at every entry and exit border. Perhaps the word “official border” should be applied here as borders are not found in the middle of fields, on top of mountain ranges or in the middle of oceans. Sic.

The Implementation of EES is the first step in a string of new processes that will also see the introduction of a Visa for non-EU citizens which is due to kick off in the first half of 2025 when a 7 Euro visa will need to be obtained by visitors to the EU.

It’s All About Connectivity

London Heathrow has returned to the top of the tree as the world’s most internationally connected airport for the second successive year as the world of travel returned to some degree of normality after the Covid episode. Kuala Lumpur and Tokyo Haneda took second and third spots.

Remember that these are not the world’s busiest airport by either passenger numbers or take-off and landing, but the ones with the most connections internationally. The top ten airports are: –

  1. London Heathrow
  2. Amsterdam Schiphol
  3. Paris CDG
  4. Istanbul
  5. Frankfurt
  6. Munich
  7. Madrid
  8. Rome Fiumicino
  9. Athens
  10. Barcelona

Lufthansa logo

More Down Under Choices

It seems an eternity ago when multiple airlines provided direct flights (albeit with a refuelling stop) to Australia. The list included Olympic, Air France and Alitalia, these days aside of Qantas and British Airways, the route from Europe down under usually involves a connection via the Middle East hub carriers of the likes of Etihad, Emirates and Qatar. However Turkish Airlines has laid down its own marker already with flights to Melbourne (via Singapore) and is about to get in on the act again with the start of a four times weekly service from Istanbul to Sydney from early December. This flight will initially refuel in Kuala Lumpur but interestingly, when Turkish receives new long haul aircraft, these will be capable of reaching Australia from Istanbul without a refuelling stop.

Lufthansa Bullish

Hardly a month goes by without reports that the Lufthansa Group are keen to “buy” or at least take “a stake” in another airlines and this month the gossip is that they are interested in taking a slice of Latvian state-owned carrier AirBaltic who are planning an IPO later in the year. AirBaltic operates out of several cities including the respective capitals of the Baltic state countries, Riga, Tallin and Vilnius.

This news follows on from last months story that Lufthansa are also interested in taking a 19.9% stake in Portuguese carrier TAP. Lufthansa are most certainly looking at options in the Iberian Peninsular and may also be interested in acquiring Spanish based airlines Air Europa who were in the sights of the Iberia/BA’s IAG Group but who have now passed on the idea. Acquiring a stake in anything in this part of Europe is very much entering the domain of the IAG power base.

Second Guessing The Future

Last month we wrote an article entitled “Turn Back The Clock” about the temporary re-introduction in Europe of the 100 ml rules for carrying liquids. Cynically, we suggested that (quote):- “Just what this “ temporary issue” is could be anything, but it’s certainly nothing to do with airlines halting flights to Israel and equally nothing to do with the looming conflict in that region. Absolutely nothing. Sic.

You needn’t be a rocket scientist to foresee that something was about to happen in that part of the world, although prophesising exploding items of communication and the like was something last seen in the 2014 film “Kingsman”.  The next question though is what this means in the future for carrying telephones and the like on board an aircraft?

Better not dwell on this question as such scenarios are more likely to stop people travelling than the Green Brigade are with their message of save the planet and camp under the stars.

To The Next Phase

Local Media this month revealed the future plans of Sofia Airports new concessionaire. The plans are admirable one must admit but whether they can deliver what they want to deliver by April 2031 is a totally different question. The new (temporary?) car park outside the main Terminal 2 which consisted of making a field into a car park seems to be taking months and months when logic would think it should take weeks. Is this a sign of the things to come? Not that this is always the fault of those commissioning the project.

Anyhow back to the new project which outlines for a new 65,000sqM Terminal 3, which it says will (quote) “takeinspiration from Bulgaria’s breath-taking natural landscapes, particularly its mountains, colours and silhouettes. The new terminal will connect with Terminal 2, merging modern architecture with contemporary materials to create a cohesive and innovative structure”.

The new terminal will have four levels with food and beverage and commercial space covering 10,000sqM. One wonders though if they will still sell the most expensive coffee of any airport in Europe to pay for the rent?

From a functionality perspective, Terminal 3 will have 34 departure gates shared with Terminal 2 as well as 52 check-in counters and self-service kiosks. Just whether 52 check-in desks are required as Europe goes human contact less in terms of check in and bag drop is another question. Security checkpoints will be capable of handling 3250 passengers per hour and the baggage handling system 2400 bags per hour.

Past PR speal mentioned new access roads, what it doesn’t mention is the annoying habit of turning this into a profit centre with charges for dropping people and their bags off and collecting them from the terminal. This particular aspect will be the most interesting challenge for the airport and a political act of tight rope walking.

Roll on 2031.

Lufthansa Swiss logo

Fuel For The Journey

The incidence of drunken passengers causing mayhem on planes is becoming a regular report from all parts of the world. Alcohol is usually the fuel behind the fire with incidents more often than not connected with leisure flights as opposed to flights used by business people and VFR (visiting friends and relatives) travellers. Dutch carrier KLM recently reported a 100% increase in unruly passengers citing alcohol as the source and Ryanair went a step further by suggesting that airports introduce a two drinks per person policy in their terminals.

Limiting drinks at an airport is fine in theory but being able to police it is another question. Passengers could simply drink more before they arrive at an airport or, as is often the case when on board a plane, open their duty-free bottles bought in the Terminal. Recently witnessing a passenger who looked to be well into his retirement age being helped/carried/escorted down the concourse by border police at Sofia Airport also suggests that age is not an influencing factor!

This is a hard topic to address unless the fines for such behaviour act as a sufficient deterrent.

Record Summer

One wonders how the public’s desire to travel would be satisfied if the so-called Low-Cost Airlines had not appeared on the scene. The recent summer months were not just the hottest on record from a local perspective, they were also the busiest that Ryanair and Wizz Air have recorded.

In August, Ryanair carried a whopping 20.5 million passengers on 111,800 flights, with flights recording a bums on seats level of 96% of capacity (load factor). In the past 12 months, they have carried 192 million passengers with a load factor of 94%.

Wizz Air meanwhile carried 6.2 million passengers in what was a record August for them with a load factor of 95.4%. In the past 12 months they have transported 62.1 million passengers.

There are many take aways from these two figures. Firstly, people want to travel and want to explore destinations not yet seen. Equally, as many people have noted, the cost of travel i.e.. he fares of air tickets has been exceptionally high these past months, which of course is a perfect example of the laws of supply and demand.

These laws of supply and demand might also be here the new norm outside of obvious off-peak periods like November and January. So hence whilst there are more and more flights, larger wallets may be required to take these increased options.

What A Waste

Providing “free meals” om board an aircraft was something we all came to expect as people’s ability to travel overseas increased. At the same time, we did not expect to get any free food on a train or coach journey even if that was also travelling between countries. Low Cost Airlines changed the mind-set of the travelling public when it came to F&B offerings on planes and that mind set was also adopted by traditional airlines when they saw they could get away with discontinuing the service whilst at the same time, maintaining the same fare level! When it comes down to it, maybe the initial ritual of an onboard meal was indeed both extravagant and wasteful.

According to IATA, untouched meals, where they are still offered free, account for 18% of all inflight waste and this together amounts to some 3.6 million tonnes of cabin and catering waste crated annually by airlines.

Managing and reducing waste is very en vogue in today’s sustainability conscious society, but from an airlines point of view, if they handled it correctly it could also be a profit centre. Technology exists for people to pre book and pre pay for onboard meals, but the aviation sector seems hesitant in rolling it out adequately. Whilst not everyone wants to eat on a flight, others who have got out of bed at 3am for a 7 am flight tend to be a tad hungry by the time the flight is en-route to its destination and if Sofia Airport is the departure point, the breakfast offerings are a bit slim and most definitely overpriced, a profit opportunity is there for the taking for airlines.

On And On

This story is becoming something of a bore but is worth following regardless. The story is that the Netherlands government, not backward at trying to prove its green credentials, identified aviation as a soft target to get its message across. The Dutch are of course famous for riding bikes but perhaps not as good at engaging logic when it comes to supply and demand. The result has been they have been doing everything in their power to reduce air traffic at the country’s main Schiphol Airport but at the same time they seem to have forgot that the rules and laws of Europe are there to be followed and not ignored.

The latest saga has seen the Supreme Court of the Netherlands side with the airlines and commerce in agreeing that the governments attempted enforced reduction in flights operating from the airport is unlawful. Period. This battle won’t lay down however and it seems some sort of compromise might work where instead of reducing flights from the current number of 500,000 per year to the attempted 460,000, the figure of between 475,000 – 485,000 may be agreed on.

Part of the wheeling and dealing involves reducing the number of night flights; which is a reasonable ask, moving private jets and charter flights to another nearby airport and incentivising airlines for using “’quieter’” planes so as not to alienate nearby residents to Schiphol. Its more than likely the airport was operating before the residents moved in, so surely, they should expect noise. In the same way someone that lives near a major motorway cannot demand the motorway closes at night!

So, if the number of flights is reduced by some 5% do airlines have a “get out’ for the problem? Surely, using a marginally bigger plane or re-configuring the seat density by adding 5% more seats (another row) enables the same number of passengers to be carried! Easy.

Read Your Audience!

Last month we commented on the Sofia Cappuccino and asked if it’s the most expensive going in airports around Europe. A traveller also commented on the 65 Leva charge for two sandwiches and two alcoholic drinks as also being up there with the “beat that challenge”. Indeed, there comes appoint whereby paying for entrance into a business lounge actually may work out cheaper.

Whilst on the theme of Sofia Airport, an amusing Social Media chain developed a couple of weeks ago as the Local Manager of an international FMCG company was praising the refurbishments at the airport and waxing lyrical about the planned new addition of a Starbucks at the airport. If the idea was for this to be a PR stunt, then it failed spectacularly as comment after comment chastised the airport for its exorbitant charges and questioned whether Starbucks was not a dated concept? So much for PR stunts and social media. The bottom line perhaps is “read your audience!’.

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