Skift Take

Today’s edition of Skift’s daily podcast looks at new ways to book hotels online, Hong Kong’s tourism hit, and the $1 billion deal for U.S. airports.

Rashaad Jorden

Good morning from Skift. It’s Friday, July 9 in New York City. Here’s what you need to know about the business of travel today.

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Episode Notes

Travelers have often found booking a hotel room online challenging, in large part to vague descriptions of rooms. But some hotel companies want to make the process easier — through a customized booking process giving travelers a bundled price upfront after selecting room perks, reports Senior Hospitality Editor Sean O’Neill.

InterContinental Hotels Group is one early supporter of so-called attribute-based pricing, in which a hotel provides travelers a custom price after they choose the features they want in a room — for example, a king-size bed or extra-soft pillows. About 95 percent of its properties have already completed detailed room inventory assessments to prepare for the full rollout. The company’s ultimate goal is for guests to be able to choose specific room features when booking systemwide on IHG’s network.

Although O’Neill writes many hotel leaders are wary of the shift to attribute-based pricing, a recent New York University survey indicates that luxury hotels may benefit the most from the new booking techniques. Sixty-three percent of travelers paying more than $250 a night for a room said they’re willing to pay more for preferred room features. IHG CEO Keith Barr said earlier this year that the new booking process would help increase revenue for his company’s hotel owners.

Next, the Federal Aviation Administration announced on Thursday it’s distributing $1 billion to 85 U.S. airports in its first round of grants as part of the Biden administration’s infrastructure law. However, airport executives view the amount as insufficient for major infrastructure projects, reports Edward Russell, editor of Airline Weekly, a Skift band.

Transportation Secretary Pete Buttigieg hailed the grants as a major step toward improving airport terminals. But industry leaders such as Kevin Burke, the North American CEO of advocacy group Airports Council International, believe $1 billion is not enough, considering the amount of money needed to finance terminal projects across the U.S. The FAA has received more than 650 applications requesting $14 billion worth of funding for airport improvements.

We conclude today in Hong Kong, which — unlike many destinations — has not significantly lifted travel restrictions in recent months. But it’s looking at ways to ease its cumbersome entry rules to boost a hard hit economy, reports Asia Editor Peden Doma Bhutia.

Hong Kong’s strict Covid protocols, which require visitors to quarantine in a hotel for seven days after arriving, have not only hit its tourism industry hard, but also helped lead to an economic downturn. Hong Kong’s gross domestic product decreased 4 percent in the first quarter of 2022 from the same period last year.

But Bhutia writes that Hong Kong’s newly-elected chief executive John Lee seems to be a man on a mission. Lee has managed to end, in his first week in office, a flight ban that restricted airlines from flying into the territory. He also said that Hong Kong would consider shortening hotel quarantine periods for incoming travelers to five days.

Skift Take

Nearly two million business travelers attended conventions in the first five months of this year, up almost 900 percent on the same period in 2021. And that’s despite widespread international restrictions.

Matthew Parsons

Sin City’s conventions and conferences are still pulling in the corporate crowds.

Visitor numbers working their way back to pre-pandemic levels, and businesses are more than willing to pay a premium; hotel rates in May this year were more than a quarter more expensive than before the pandemic.

Las Vegas saw two million people attending conferences and events from January to May this year, according to new figures from the Las Vegas Convention and Visitors Authority.

It was a star performer during the pandemic, now it appears the destination is continuing its run as a popular corporate destination.

The 1,999,900 business travelers represents an increase of 878 percent on the same five-month period in 2021, when just over 200,000 business travelers visited.

The overall number of leisure and corporate visitors combined exceeded 3.4 million people in May alone, surpassing May 2021 by nearly 20 percent, but remaining 7 percent below the level in May 2019.

However, average daily rates were up 25.1 percent in May 2022, compared with May 2019.

While the authority paints a picture of a resilient destination, international travel has not quite fully recovered, according to reports. All pre-pandemic conventions have returned to Las Vegas, but attendance was still down, Clark County Commission Chair Jim Gibson was reported as saying.

However he said: “We predicted probably 2024 before we were fully back. I think that one could make the argument that may happen earlier.” The report added that the Las Vegas Convention and Visitors Authority had also opened new tourism offices in Mexico, Canada, the UK and Germany.

Company spending on conferences has meanwhile surpassed 2019 levels, as an overall share of business travel budgets, and is expected to be up 4 percentage points in 2022 compared to 2019, according to a new Global Business Travel Association poll.

Its 28th Business Travel Recovery Poll, carried out last month, found conferences, trade shows and industry events stood at 21 percent of budgets, second only to customer and prospect meetings, which came in at 31 percent. Internal meetings with colleagues were at 17 percent.

”In-person meetings are on the top of the list for where companies are allocating their business travel spend this year,” the association said.

Korean Air this month became the latest airline to resume its flights between Las Vegas on July 10. Operations had been suspended from Seoul in March 2020 because of the pandemic.

Skift Take

In Skift’s top stories this week, Margaritaville’s CEO explains how Jimmy Buffett’s brand became a force in the hotel industry, Akasa Air’s CEO discusses its launch strategy, and workers dislike how much business travel they are asked to do.

Sonia Menken

Throughout the week we are posting original stories night and day covering news and travel trends, including on the impact of coronavirus. Every weekend we will offer you a chance to read the most essential stories again in case you missed them earlier.

The Margaritaville CEO on Just How Far the Jimmy Buffett Brand Can Go: Millennials think they invented experiential, lifestyle brands. But Margaritaville CEO John Cohlan was perfecting these ideas before many of today’s hotel execs had sipped their first margaritas. Cohlan helped to turn Jimmy Buffet’s music into a billion dollar empire, and he has lessons to share.

Akasa Air CEO on How India’s Newest Startup Carrier Will Stand Out: No matter how big the Indian aviation pie may be, a new carrier, especially one whose crew wears sneakers, entering the market, will definitely shake things up as airlines compete more aggressively to tap first-time fliers.

Employees Already Unhappy With Pace of Returning Corporate Travel: New Survey: The nightmare that flying has become is starting to weigh on employees. Perhaps company travel managers now need to deflect any pressure from the top as bosses rush to get things back to normal.

SAS Joins List of Airline Failures and Bankruptcies Since Pandemic’s Start: The list of pandemic airline bankruptcies keeps growing even as travel bounces back faster than anticipated. But hundreds-of-millions-of-dollars in government aid didn’t save SAS, which became the latest victim Tuesday.

Expedia and Marriott Claim Progress on Proliferation of Rogue Hotel Rates: Rogue wholesale rates on metasearch sites are the gifts that keep on giving — for travelers and the metasearch sites. Expedia and Marriott seem to be making some progress on the issue.

Ukraine’s Neighbors Still Attracting Tourists Despite War Raging Nearby: Traveler fears, particularly in the U.S. and Europe, about the danger of the Ukraine War spreading have lessened, allowing for tourism’s recovery in Eastern Europe to continue. Industry stakeholders still have to vigilantly reassure and educate travelers about the safety of their destinations.

Hotel Spas Expand Into Mental Wellness Beyond the Staple of Massage: Is anyone up for some desert bathing? How about a cleansing ritual led by a shaman?

The Highest Paid Cruise Industry CEOs: Everybody in the cruise business suffered during Covid except CEOs, it seemed. As passengers canceled or got sick, and workers got laid off, executive compensation topped 1,000 times the median worker’s pay. Including tips.

The Women Who Shaped Short-Term Rental History: The men got most of the headlines and speaking invitations, but women entrepreneurs helped shape the short-term rental industry from its earliest days.

What Biden’s Transit Expert Pick Will Bring to the FAA’s Top Job: Managerial skills may be what President Biden is going for with his nomination of transit executive Phil Washington to lead the FAA. After this summer of flying mayhem, managerial skills may be what’s needed most now.

Skift Take

The power of the long tail. See it for yourself in this single chart from Skift Research.

Tom Lowry

We often talk about the fragmented nature of the hotel and short-term rental industries. Comparing the two, however, highlights the higher penetration of consumer-facing brands in the hotel industry. Skift Research, using data from STR and AirDNA, estimates that just over half of global hotels are affiliated to a global or regional brand. In the short-term rental industry we estimate that this is less than 5 percent. Another 10 percent or so are operated by large property managers. The “long tail” of small, independent operators is much larger in the rental space than in the hotel industry. 

Excerpted from Skift Research’s new report: “The Great Merging in the Hotel and Rental Tech Sectors 2022.” Sign up now as a subscriber to read all the insights.