8 July, 2005
It seems unavoidably impossible not to start a travel themed newsletter on 7/8 without referring to London's misfortune on 7/7. Every possible special interest group has already rushed to put their own spin on it, and I'll offer two awards :
The most (oxy)moronic interpretation : A statement from the World Tourism Organization, which would have us believe the terrorists sought to attack London's visitors, but didn't wish to harm the UK tourism industry :
The most unrelated interpretation :
The International Council of Tourism Partners believes the best way to
combat terrorism is to send more money to Africa to be
In ICTP's statement they tell us
As for me, yes, I too have a spin. This act of terror reminds me of a less heralded act of terror almost exactly twenty years ago today; an act described by the country so attacked as 'an act of war'.
Fortunately, they didn't go to war with the terrorists, however; because France (yes, it was French army commandos, acting on their government's orders, who attacked and sunk a boat peacefully moored in Auckland harbor, killing one of the crew in the process) would surely have triumphed over New Zealand in the subsequent conflict.
Not content with sending its army commandos
to sink a ship in Auckland harbor, the French government then threatened
to use its EU veto rights and ban all NZ imports to EU countries (ie
Britain, then one of NZ's largest trading partners) if the NZ government
prosecuted and imprisoned the captured
Two of the hit squad of approximately twenty were captured before they managed to flee the country; an event that should have proved embarrassing to France, which until the point of having their servicemen paraded in front of tv cameras was professing no knowledge of the attack at all.
But to be embarrassed, you first must have a sense of honor.
And, talking variously about both New Zealand and Britain (massive topic segue here), hopefully you saw last night's special newsletter with the amazing low fares to both countries. What better way to thumb your nose at terrorists from both France and the Middle East than to travel to Britain and defiantly ride the Underground in the city now appointed as the venue for the 2012 Olympic Games, and what better way to get to Britain than on a massively discounted $2012 business class fare. Today is the last day for this fare.
You still have the weekend to take advantage of Qantas' low fares to New Zealand, with Monday being the last day they are available. And if you're thinking of traveling to New Zealand, why not join our October tour?
Very good tour related news - since setting the price last week, the Kiwi dollar has tumbled, and so I've been able to lower the price.
I'm off to New Zealand on 25 July, both to fine tune the tour and also to hopefully buy myself a NZ Winter home to enjoy this coming northern winter. More on this project, and how you too can participate in affordable NZ Winter Home ownership, in the weeks to come.
One of the other reasons the tour price is truly good value is because I've gone to a great deal of trouble to get the very best rates for all the inclusions. And, while doing so, I've discovered it is getting harder and harder for travel agencies to offer the same deals that often are directly for sale on supplier websites.
Although a recent survey showed that 68% of US adults are more comfortable booking travel through a traditional travel agent, industry statistics suggest that regular travel agencies are now handling less than 50% of all travel arrangements.
According to the survey, the key benefits of using a travel agency were perceived as being the ability to get all travel arrangements booked through one source (76%), access to realtime flight and hotel information (73%), and benefiting from a travel agent's advanced knowledge of the destinations being traveled to (70%).
Conspicuously absent was any mention of a travel agent being able to save money. Which is actually a good thing for the industry, if it is now moving from a 'we are cheapest' strategy to a 'we are best' strategy. That is definitely a more viable position for the future. Which leads to :
This Week's Feature Column : How to Best Use a Travel Agent : Nowadays travel agents are more likely to earn their fees from you rather than from supplier commissions, and they no longer consistently have direct access to the best prices. So perhaps it is time to update how you work with your travel agent to reflect this new reality.
As an interesting bit of trivia on the evolving travel industry, the first packaged tour was sold 150 years ago; on July 4, 1855 and was led by Thomas Cook.
According to the current CEO of Thomas Cook, Manny Fontenla-Novoa, it didn't make a profit. 'We know that Thomas didn't make any money on the first overseas holiday. He had hoped to arrange a direct trip to Paris, but the concessions he had arranged fell through and the only way to reach France was via a sea crossing from Harwich to Antwerp, and to Paris via Belgium and Germany. In the end he took quite a hit through the additional costs.'
And noting that the more things change, the more they stay the same, the trip was sold and marketed direct to the customer. Travel agents didn't exist back then.
Quick update on the free cell phone offer. I have a backlog of a few unfulfilled requests, and hope to resolve these in the coming week. Thanks for your patience to the people so affected.
Dinosaur watching : Believe it or not, but United Airlines says it will be filing a reorganization plan on or about 1 August. The airline says it hopes to emerge from bankruptcy some time this fall, which will be just short of a three year sojourn in Chapter 11.
US Airways is also confidently projecting its own exit from Chapter 11 and its merger with America West. Bad news for creditors, though. Creditors owed under $50,000 will get a cash payment equal to 10% of the money they are owed. Unsecured larger creditors have won't get cash at all. Instead they'll get shares in the new company. Lucky them.
Lady Luck wasn't smiling quite so much on existing US Airways shareholders, however. They get nothing at all, not even shares in the new company.
Talking about getting nothing at all, US Airways has announced it will copy NW's move, and - moving with lightning speed - as from September will no longer give free pretzels to passengers. Perhaps US Airways has two months supply of pretzels still in its warehouses.
Showing there's no-one home in US Airways' brain department, spokeswoman Amy Kudwa said this was part of their larger effort to compete with low-fare airlines. Why is this so stupid? Three reasons.
Firstly, because - ooops, low-fare airlines generally do give away snacks on their flights. US apparently thinks that to successfully compete with a low-fare airline, you should provide an inferior service.
Secondly, because the dinosaurs continue to think the secret of the low-fare airlines, and therefore how to successfully compete with them, is to give no service, or at best, bad surly service. Not so! The low-fare airlines give good service, and often offer their passengers a generally superior experience in all respects.
And, thirdly, America West, shortly to take over US Airways, still gives out pretzels and has no plans to change.
Talking about low-fare airlines with good service and a generally superior experience, struggling startup Independence Air announced their June traffic data earlier this week. Good news : June saw improvements in all their key measurements. Revenue passenger miles increased by 6.6% over May's result, and their load factor rose from 72.9% up to 76.2%. Their days of horrible load factors below 50% seem to be quickly receding, and if they can just now get their average fare prices up a bit, it seems they really have a chance to succeed.
As an inducement, in addition to amazing low fares that you almost feel guilty taking advantage of, Independence Air currently has some sweeteners to its frequent flyer program. Unlike most such programs, you get points per dollar spent, not per mile flown, and free tickets starting from every $1500 you spend in less than a year.
Amazingly, award travel is unrestricted. There are no blackout dates, and all seats on all flights can be used for award travel. Wow.
The sweeteners? A 500 point signup bonus. And, if you fly any two roundtrips between now and 30 September, you'll get a free roundtrip companion ticket.
Talking about free tickets, winning a free ticket from an airline is often the sort of prize you wish you didn't get. Why is that? Because the cost of the taxes you have to pay the IRS for winning the ticket can sometimes be higher than you could simply buy a ticket for yourself; plus, if you bought the ticket yourself, you get frequent flier miles and no hassle, whereas award tickets are often subject to many restrictions and you definitely get no frequent flier miles.
How can this be so? Because the airlines report the value of the ticket to the IRS as if you bought the most expensive ticket possible for your award travel. In reality, most rational people choose to buy the cheapest ticket possible for any given travel itinerary, but - for reasons best known to themselves - the airlines refuse to accept this line of reasoning.
I've several times been involved as an 'expert witness' in such cases, valuing free tickets for their unlucky winners. I've sometimes been able to value tickets for a quarter or less the value the airline claim them to be worth.
An example this week is Jack McCall, a person who won 12 travel vouchers from American Airlines, each good for a restricted coach class roundtrip for two anywhere in the world AA flies. Jack has only a year to use all twelve roundtrips, and isn't allowed to sell them to anyone else. So he says he doubts if he'll use all twelve sets of tickets, and some/many of the roundtrips will be low value fares to close-to-home destinations for short vacations rather than a series of twelve long-haul trips to far away places.
However, AA says 'it has no choice' but to value the award at $52,800, no matter if Jack uses all the tickets or not, and whether he uses each ticket for a $200 roundtrip flight or a $2000 roundtrip flight. American admits, through its prize agency, that in establishing this valuation it has used a 'worst case' scenario, but doesn't explain why it has chosen this strategy.
Bottom line - Jack finds himself the unlucky winner of more air travel than he can ever hope to use in the next twelve months, no way to cash in any of the tickets, and an extra tax bill for federal, state, and local taxes that could range from $15,000 to $23,000.
He doesn't think that is fair. And so he's refusing to accept his prize.
A rose by any other name? I've mentioned for the last couple of weeks the rapid selloff of shares by NW's Chairman, Gary Wilson. He's sold 3.1 million shares, 75% of his holding, in the last six weeks. However, when asked about this at NW's AGM, he said this was not dumping his shares. Instead he said he would describe it as 'diversifying'.
The Department of Transportation has warned travelers to expect flight delays at major airports this summer. Delays dropped in April and May but rose sharply at major airports during the first two weeks in June. By mid-June delays were affecting at least 25% of flights, with notable bad airports being Newark, Philadelphia, Miami, Washington Dulles and Chicago O'Hare, all with delays for 30% or more of all flights. Delays at Atlanta were 35% of all flights during the first two weeks of June.
Ten airports had delays that averaged over one hour with La Guardia having average delays of 71 minutes.
I was surprised but pleased to report earlier this year about the EU setting up a passenger bill of rights, mandating fairly generous compensation for passengers inconvenienced by flight delays or cancellations, or luggage problems, or various other things.
But in an organization that is increasingly crumbling around the edges, it now appears that six of the EU countries have simply ignored the new bill of rights. The six countries are Austria, Belgium, Italy, Luxembourg, Malta and Sweden.
Reader Bill wrote in to express his financial pain at being asked to spend up to $30 a day to access high-speed internet at the Crown Plaza in Geneva, and wondered how much other readers feel to be a fair price per day to pay for unlimited high speed internet access in your hotel.
Please click on the answer below that represents your thinking - it will send an empty email to me with your answer in the subject line. Answers next week.
Have you been following the new cruise ship concept offered by low cost airline EasyJet's founder? Called (what else) EasyCruise, it offers no-frills cruising at very low prices, but the rates include nothing except basic board.
The ship is stationed in the Mediterranean during the summers, and will be moving to the Barbados area for the winter. I just checked on their website, and cruises are available for as little as $16.20 per person, per day, for a basic twin share cabin, or $60 per person in a half-way decent suite. A shame about the bright garish orange everywhere, though.
The airline (name) that won't die. Now revived as the Pan Am Clipper Connection, this latest Pan Am appellation started operations last week from Stewart Airport (Newburgh, NY) to Orlando's Sanford Airport, putting the Pan Am name and logo back in the skies. The president of the airline said the flight was sold out and early booking reports were very positive. You can only book flights on the carrier through its own web site or travel agents.
There's an interesting Wi-Fi application soon to be rolled out in Vegas casinos. Wireless gambling. You'll be able to lounge by the pool and with a portable device still play the electronic slots.
Talking about wireless, the London bombings yesterday predictably saw the cell phone networks quickly overloaded with everyone phoning everyone to variously enquire or reassure about their personal safety. Here's an invaluable tip, should you ever find yourself in such a situation : When the cell phone network is overloaded and you can't get a dial tone to ring out, the best way to get a message through is to send an SMS text message.
Not only does this make theoretical good sense, but it has worked for me in practice, too; although mercifully not at a terrorist disaster site, but rather at the 135,000+ participant Consumer Electronic Show - everyone had a cell phone, most were trying to use them, and the networks just crumbled so that voice calls couldn't get through sometimes for an hour or more at a time. We were able to consistently SMS each other no matter what.
I'd speculated, a month back, about T-mobile's future in the US market. Although the company has been growing rapidly and has also been profitable for parent, Deutsche Telekom, consolidations in the market have made it by far the smallest of the four national wireless services, and unlike the other three carriers (Cingular, Verizon and Sprint), it strangely has no definite plans for investing in high speed data services.
Speculation has now emerged that its parent may consider selling T-mobile. Deutsche Telekom bought T-mobile in 2001, paying $47 billion at the time for the company. It is thought a sale now would bring in only $25 - 30 billion.
Most likely buyer? Vodafone, currently a partner in Verizon.
We're currently hearing about the latest projected hurricane strikes on Florida, and tourists are being evacuated from the Keys. However, they do things differently in Australia, and in Darwin, a town that was pretty much leveled by their Cyclone Tracy some years back, the Northern Territory's Chief Minister sees its storms as a tourist draw and advocates building a convention center in a nice exposed location. Note also, in the following quote, her delightful use of the term 'shoulder season' to refer to the worst months of the year :
And talking about bad weather, the State of Florida has now reached settlements with 23 hotels that were charged under the state's price gouging law during last year's hurricane season. The Airport Inn Sarasota is the latest hotel to settle. The hotel raised prices from $55 to $75 and in some cases, as much as $100 per room during the storm. The hotel has 45 days to locate consumers who may have been charged the inflated prices between August 12 and August 30, 2004, and refund the difference between what they were charged and the usual nightly rate of $55. The hotel must also give $2,000 to the Florida Hurricane Relief Fund and $5,000 to cover the state's legal fees and costs of investigation.
Oil prices grazed $62 a barrel earlier this week, although the London bombings actually caused a softening in price (due to concerns it might cause a worldwide slowdown in economic growth).
Interestingly, Saudi Arabia has changed its tune from limitless confidence to one of qualified concern, in terms of how well it can meet the growing worldwide demand for oil at any price. Saudi officials predicted that OPEC will be unable to meet projected western demand in the next 10 - 15 years. They project a 4.5 million barrel a day gap between what the world will need and what they can provide.
So let's hope this car (well, it actually looks more like a cross between a go-kart and a motorbike), which can get a reputed 12,500 miles per gallon, quickly makes it into production.
The 'car' has a top speed of 30 mph. But opportunities for drivers such as myself to enjoy a bit of high speed driving may be quickly vanishing, with or without this car.
Devices such as these, soon to become 'optional' for UK motorists, will simply cut your speed any time you try to exceed the posted speed limit. With the memory of my experience behind the wheel of a 198 mph Bentley supercar still fresh in my mind (and the promise to test drive a new model Bentley early in 2006), one wonders what such devices might do to the high performance car industry.
And if high gas prices and in-car speed limiters don't see you selling your Bentley on eBay, the mooted energy ration cards (another British concept - the British are rapidly becoming the most over-controlled nation in the western world) sure would.
This week's security horror story : Further proof of Britain becoming over-controlled is given in an editorial in the British Medical Journal which has a vital, urgent suggestion for the improvement of public health : Pointy kitchen knives must be banned to reduce knife crime. Laws must be passed, the authors say, to make sharp tipped long knives illegal.
There has been a recent rise in stabbings in the UK. The writers polled ten English chefs and 'none gave a reason why the long, pointed knife was essential'.
This is apparently not a joke.
Every silver lining has a cloud. Reader Rich writes to say
If Rich continues to have problems, perhaps he too should try and build a class action suit about TSA problems.
And if you find yourself selected to be on his - or any other jury - here's a word of warning. When you're being examined for your suitability as a juror, don't tell the truth - you might be sent to jail.
Lastly this week, cell phone ring tones are big business, bringing in billions of dollars a year to the vendors selling them. Here's the latest in 'ring tones' that costs a mere £2.50 ($4.40). Which may be much less than other ways of generating such a 'tone'.
Until next week, please enjoy safe travels
David M Rowell aka The Travel Insider
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