Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Airlines

AirAsia to Now Launch a Low-Cost Carrier in Cambodia

23 hours ago

AirAsia Aviation Group on Friday announced a joint venture with Cambodia-based Sivilai Asia to launch a new low-cost carrier — AirAsia Cambodia.

The airline, in which AirAsia will be the majority partner, expects to commence operations in late 2023.

Cambodia is the fifth Southeast Asian destination that AirAsia will be foraying into after Malaysia, Indonesia, Thailand and the Philippines.

Speaking to the media, Tony Fernandes, CEO of Capital A, AirAsia’s parent company, said all of the group’s future airlines would be based in the region as this is an area they know best and have a strong brand presence.

In 2020, the aviation group shut down operations of AirAsia Japan and last month the company announced that it has sold off its remaining 16.67 percent stake in AirAsia India to Tatas-owned Air India.

AirAsia plans to touch pre-Covid levels by the second quarter of 2023 and in true Tony Fernandes style the Capital A CEO said he’s confident AirAsia Cambodia would be profitable “from the get go.”

“Cambodia is a market that is familiar to us and where we have deep infrastructure in place,” Fernandes said.

AirAsia Aviation Group is the largest foreign airline and the second largest airline group overall operating into Cambodia in terms of capacity, according to group CEO Bo Lingam.

Pre-pandemic, AirAsia operated 90 weekly flights from Malaysia and Thailand to Cambodia and is currently flying about 49 weekly flights.

“The value of AirAsia’s network is an insurmountable asset; it will be another flag of extensive connectivity in Cambodia and into the region, namely China, India and North Asia,” Fernandes said.

Currently, there are no direct flights between India and Cambodia.

Reacting to earlier reports of a proposed merger of AirAsia and AirAsia X, Fernandes had clarified on Monday that the group proposed to form a separate aviation group comprising all its airlines.

Online Travel

On the Beach Founder to Step Down as CEO

2 days ago

On the Beach Group CEO Simon Cooper, who founded the UK-based beach holidays online travel agency in 2004, will resign his post within the next 12 months, and Chief Financial Officer Shaun Morton will take over the CEO duties, the company announced.

On the Beach Group founder and CEO Simon Cooper plans to step aside as CEO within the next 12 months. Source: On the Beach Group

The precise timing of the transition, according to the company, depends on recruitment of a new chief financial officer to assume Morton’s current duties. The board hired an external team to assist in that search.

On the Beach Group credits Morton with helping to guide the company through the Covid pandemic, playing a lead role in strategic investments in brand marketing and technology, and striving to win market share in luxury and long-haul trips, and making inroads in the Group’s business-to-business initiatives.

Cooper, who remains a major shareholder in the company, will take a board seat and stay actively involved in the business, On the Beach stated. Cooper increased his shareholding in August.

On the Beach Group didn’t cite a specific reason for Cooper’s relinquishing his CEO duties.

The announcement coincided with the company’s release of its fiscal 2022 preliminary results. The fiscal year ended September 30.

For the year, On the Beach Group, which is a publicly traded company in London, recorded profit before taxes of  £2.1 million ($2.6 million) in fiscal 2022 compared with a loss a year earlier of £18.4 million ($22.5 million).

“Notwithstanding the emergence of Omicron and the disrupted airline schedules this summer, revenue was up 3 percent versus fiscal year 2019,” the company’s announcement stated.

On the Beach stated it is uncertain how the “cost of living crisis” will sway consumer behavior, adding that the company is well-positioned entering fiscal year 2023.

Business Travel

TripActions Secures $400 Million in Credit Facilities

2 days ago

Corporate travel agency TripActions this week secured $400 million in credit facilities from Goldman Sachs and Silicon Valley Bank, which it said it will use to “accelerate the expansion of its customer base.”

The credit facilities consist of a warehouse debt facility from Goldman Sachs Bank USA, as the senior lender and administrative agent, with a $200 million commitment ($300M total program limit) and an asset-backed lending facility of $100 million led by Silicon Valley Bank.

TripActions said the warehouse facility will enable the continued growth of its corporate card and expense management solution, TripActions Liquid. “With this new warehouse facility from Goldman Sachs, TripActions Liquid is well positioned to support its customers while continuing to innovate at a rapid pace,” said executive vice president Michael Sindicich, head of TripActions Liquid, in a statement.

The corporate travel agency’s latest financial dealings follow October’s raising of more than $300 million. That involved a combination of $154 million in equity from new and existing financial investors, plus a $150 million structured capital transaction led by Coatue.

The company also last month bought Spain’s Atlanta Events & Corporate Travel Consultants, its fourth acquisition in 18 months.

Meanwhile, there’s still no news on a potential initial public offering to further fund the business.

Tourism

Hong Kong Eases Testing for Inbound Arrivals

2 days ago

A day after China announced some major changes to its controversial zero-Covid policy, Hong Kong on Thursday announced that inbound arrivals would need to undergo daily rapid antigen tests for five days, instead of seven days.

However, international travelers coming into the city would still need to take a polymerase chain reaction test on landing and on the third day and remain in home isolation for three days with limited movement.

Hong Kong has also shortened the isolation period for Covid-19 patients and their close contacts to five days from seven days, provided they test negative on the fourth and fifth day.

This rule would also be applicable for unvaccinated people, who were earlier required to spend 14 days in quarantine.

However, the outdoor mask mandate and other anti-epidemic measures will continue to stay for the next two weeks till December 28.

“Over the last week the number of daily infections has still been increasing and Wednesday’s figure of 14,373 has been a record high,” Hong Kong authorities said in a press briefing.

With Christmas and New year round the corner, health undersecretary, Dr Libby Lee Ha-yun, said there will be immense pressure on healthcare facilities as result of which the government does not look to relax the anti-epidemic measures further for now.

“We are reviewing our strategies based on science, targeted anti-epidemic measures, proper management of risks as well as citizen-focused facilitation,” authorities said during the press briefing.

Tourism

Hawaii Cancels U.S. Tourism Marketing Contract with Native Community Group

3 days ago

The Hawaiian government this week rescinded the Hawaii Tourism Authority’s U.S. tourism contract with the Council for Native Hawaiian Advancement, a community non-profit, providing a potential setback for the authority’s sustainable tourism efforts. The reason for the government’s rescission was that the contract needed to be separated into two, one for marketing and the other for visitor management and community relations.

The move is the latest roadblock to the Hawaii Tourism Authority’s attempts toward bringing a more sustainable approach to Hawaii, where communities have been frustrated by and more vocal about tourism’s negative impacts on their quality of life and ecosystem. The situation was an industry example of the 2022 Skift megatrend that communities are asserting themselves in travel.

Former Department of Business, Economic Development, and Tourism (DBEDT) Director Mike McCartney made the decision minutes before his term ended at noon on Monday. The Hawaii Tourism Authority (HTA) sits under the Department of Business, Economic Development, and Tourism.

In a letter, McCartney said there needs to be one contract for marketing and another for destination brand management, communication, education, and community-based economic development. “A single contract would not only put us at a competitive disadvantage in the market but also in dealing with the community,” the former director wrote.

Diamond Head Crater in O‘ahu, United States. Photo by Chase O.
https://unsplash.com/photos/7yKgU0xemJw

In June, the Hawaii Tourism Authority awarded Council for Native Hawaiian Advancement (CNHA) the $34 million dollar contract to market the islands to the U.S. until December 2024. It was a historic shift because HTA didn’t go with its historic partner,  Hawaii Visitors and Convention Bureau (HVCB), which has marketed Hawaii for over a century with strong support from the traditional tourism industry. 

The contract award also represented a significant step toward HTA implementing a “locals-first” approach. The authority wants to attract a more high-spending but mindful visitor, one that will embrace Hawaii’s cultural heritage and be respectful of sacred sites and the natural environment. 

Since the June contract award, HTA has repeatedly extended its current contract with the HVCB due to protests by the bureau. Its most recent extension was up to March 31, 2023.

With the June contracted canceled, HVCB could very well end up oversee marketing to the U.S. for the next few years. In a statement, CNHA CEO Kūhiō Lewis called McCartney’s recession “unlawful” and said his organization will protest it.

HTA President and CEO John De Fries said the organization is willing to work on a settlement with all the parties involved or start a new procurement process, according to Hawaii News Now.

Either way, the Hawaii Tourism Authority will have to get to work, starting with an upcoming emergency meeting. “My staff and I look forward to discussing this rescission and cancellation at our board meeting on Wednesday and we will work with our board, new DBEDT Director Chris Sadayasu, the State Procurement Office, and Governor Josh Green to explore viable options and align our direction going forward,” said De Fries.

Airlines

Southwest First U.S. Airline to Resume Dividend After CARES Act Rules End

3 days ago

Southwest Airlines will pay a dividend to its shareholders of record as of January 10, 2023. This may not seem like a notable move for a carrier that has paid dividends for most of 50-plus year existence but it is: Southwest will be the first U.S. airline to resume shareholder returns since the pandemic.

Shareholder returns, including dividends and stock buybacks, were barred at any airline that took federal aid under the U.S. CARES Act until this September. Most carriers have also returned to profitability on the back of strong travel demand. Dallas-based Southwest made a $277 million net profit in the third quarter.

Travelers board a Southwest flight
A Southwest Airlines gate at Dallas Love Field. (Edward RussellSkift)

Other U.S. carriers may not be far behind Southwest. Alaska Airlines Chief Financial Officer Shane Tackett said in October that the carrier’s management would discuss the possibility of resuming “potential shareholder returns” with Alaska’s board in November. There is no word yet on any decision from the Seattle-based carrier.

U.S. airlines, including Southwest and Alaska, are seeing strong travel demand into the new year. Delta Air Lines CEO Ed Bastian in October went as far as to claim that travel is “countercyclical” to the macroeconomic trends of high inflation and a potential U.S. recession.

Airlines practice of giving some cash back to shareholders was in the spotlight when the industry was pushing for federal relief in the CARES Act. Some noted that, had the industry not paid dividends our bought back shares in the years prior to the crisis, they may not need the government hand out. Airlines pushed back on this claim, rightly arguing that such returns were standard practice across businesses and not just airlines.

Southwest will pay its investors an $0.18 per share dividend for the fourth quarter on January 31, it said Tuesday. The carrier estimates the dividends will total roughly $428 million.

Online Travel

Travelzoo Owner Aims to Invest $10 Million to Fund Metaverse Experiences

4 days ago

Travelzoo, a hotel and package deal publisher, said in a financial filing on Tuesday that it would ask its stockholders to approve a $10 million cash investment that would let its founder increase his ownership and help the company fund the metaverse experiences scouting business it began this year

The subsidiary suffered $63 million in losses this year, the filing noted, roughly equal to parent company Travelzoo’s current market capitalization.

At a Dec. 28 special meeting, the company will ask shareholders to vote on allowing the hedge fund Azzuro Capital, controlled by Travelzoo founder Ralph Bartel, to buy shares of Travelzoo stock for $10 million. The transaction would effectively leave Bartel with a 50.1 percent stake in Travelzoo (up from 35.99 percent) and his brother, CEO Holger Bartel, with 4.1 percent. The company will issue shares of common stock that represent approximately 27.5 percent of outstanding stock.

Azzurro could choose to pay in cash or as a combination of at least $2 million in cash and up to $8 million in a secured promissory note to be repaid in two installments in March and June 2023.

The fund will acquire all equity in Metaverse Travel Experiences, a Travelzoo subsidiary that has generated $63 million in net operating losses since January, according to the filing. The company originally hoped to fund the subsidiary’s operations from yearly fees from members but the launch of sales hasn’t yet happened during the project ramp-up. 

The subsidiary aims to build “relationships with creators and providers of high-quality metaverse travel experiences with the goal of brokering contracts between such creators/experience providers and businesses planning to market metaverse experiences to consumers.” Skift covered the debut of the unit earlier this year.

Meanwhile, parent company Travelzoo’s profits decreased year-over-year in the most recent quarter at a time when most hotel, airline, and online travel companies reported sharp, profitable growth curves on the backs of a post-pandemic travel boom.

In the quarter that ended Sept. 30, the company recorded a profit of $790,000, down 79 percent from $2.84 million in the comparable period last year. Revenue of $15.89 million barely changed from $15.7 million last year. 

The financial filing is posted below.

Airlines

Beijing’s International Airports Remove Negative Covid Test Requirements — Reports

4 days ago

Beijing Capital International Airport will no longer require proof of a negative Covid result for entry into its terminals, Reuters has reported, quoting Beijing News, a newspaper owned by the Chinese Communist Party.

However, it is unclear if passengers need to show negative tests prior to boarding.

The relaxed rules come as the government steps down other restrictions, including parks, supermarkets and offices. The city’s other airport, Beijing Daxing International Airport, has also reportedly lifted its negative test requirement. At the end of November Beijing shut parks, malls and museums due to a spike in Covid cases.

This latest easing follows a series of protests against the state’s “zero Covid” policy.

Beijing Capital International Airport, the country’s largest, used to be one of the world’s top 10 busiest airports, and is a hub for Air China, China Eastern Airlines and Hainan Airlines.

It handled more than 100 million passengers in 2019, and was the second busiest airport in the world, according to the Airports Council International. In 2020 it handled 35 million passengers, while in 2022 did not make the top 10 ranking.

Airlines

AirAsia Parent CEO Wants to Pull Its Airlines Into an IAG Model

5 days ago

Malaysia’s Capital A will not be merging its airlines, but will instead move all the carriers under one existing structure, similar to how British Airways, Iberia Airline, and Aer Lingus operate under the International Airlines Group umbrella, said CEO Tony Fernandes on Monday.

AirAsia X will be renamed AirAsia Aviation Group and there will be six airlines under it — AirAsia Malaysia, AirAsia Thailand, AirAsia Philippines, and AirAsia Indonesia, as well as AirAsia X Malaysia and AirAsia X Thailand.

“We are just injecting AirAsia airlines into AirAsia X’s listing status, there is no merger,” Fernandes told the media.

He said that each airline would continue to operate independently.

Fernandes made the statement to the media on the sidelines of the launch of Capital A’s upgraded subscription service — Super +.

AirAsia had earlier launched the flight subscription service in March to provide unlimited flights to destinations across Southeast Asia. Monday’s launch will now include destinations in Japan, Korea, Australia, India, Maldives, New Zealand, Hong Kong, Taiwan and Saudi Arabia.

Capital A has launched two versions of the subscription service — Super+ Lite, which covers unlimited flights across all Southeast Asian destinations very similar to the version launched in March, while the Super+ Premium includes all countries operated by the AirAsia airline group, including long-haul destinations.

The lite version is priced at $203, while the premium option comes at $524.

“Till date, over 100,000 Super+ subscribers have redeemed over 500,000 flight seats across Southeast Asian destinations,” Capital A said in a release.

While flight bookings opened from Monday, the earliest flights that subscribers could opt for was from January 1, 2023.

“This is what we have been preparing for — the return of travel, and we are excited about the reopening of markets like Japan, South Korea, Taiwan, Hong Kong and more to come in the near future,” Fernandes said.

Business Travel

Travelport Is Selling Off Its Corporate Hotel Booking Platform Hotelzon

5 days ago

Travelport is planning to sell its Hotelzon division to corporate travel agency startup TripStax, which was officially launched earlier this year — by two former execs at Travelport.

Hotelzon claims to offer 1.5 million properties from multiple content sources that include Booking.com and Expedia, and says it has 370,000 users, including travel agencies, corporations and event management companies.

It was established in 1972, but has been a wholly-owned subsidiary of Travelport since 2014.

TripStax signed the agreement to acquire Hotelzon as of Dec. 1 2022. Terms of the deal were not disclosed, but TripStax said the agreement establishes a “long-term strategic relationship between TripStax and Travelport whereby Hotelzon will continue to generate hotel bookings on Travelport+.”

Travelport has been streamlining its technology since it announced Travelport+ in April last year.

Skift first revealed the development of TripStax as a spin-off from corporate travel agency ATPI in July 2021. TripStax’s investors include Intermediate Capital Group, which is one of ATPI Group’s owners. ATPI also made a significant investment, with ATPI CEO Ian Sinderson joining TripStax as a director.

Jack Ramsey, CEO of TripStax, was previously global sales director at Hotelzon.

The Unbundling Trend

TripStax said the acquisition will boost its technology offering of “connected proprietary business travel modules with a fully integrated hotel booking tool for agencies and corporates direct.”

The travel agency startup wants to stand out from the crowd by offering modules, such as analytics, content and traveler tracking, rather than a full service. Corporate travel agencies are under growing pressure to separate their bundled services as company travel managers look to cut costs and add flexibility.

Hotelzon will be integrated as an additional module.

It is the second acquisition made by TripStax, following its purchase of TapTrip earlier in the year. TapTrip also received investment from ATPI.

“Since its conception, TripStax has been on the look-out for acquisitions which add relevant and complementary tech to its already powerful stack of business travel management modules,” said Ramsay. “We are also excited to welcome the hugely experienced Hotelzon team to the TripStax business and plan to further invest in the team to strengthen existing customer and supplier relationships and realise the full potential of this joint opportunity.”