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Skift Breaking News Blog

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

Tourism

SE Asia Dominates for Muslim Travelers Globally; Under-40s Driving Halal Tourism

4 weeks ago

South East Asia and Middle East regions continue to dominate in the ranking of Muslim-friendly destinations, according to the latest research and rankings by Muslim travel consultancy Crescent Rating along with its partner Mastercard.

The report dives into how the under-40s global Muslim population is now driving the next phase of growth of what many in the industry call “halal tourism.” Gen Z and women travelers amongst the Muslim population will drive the growth from here on, according to the report.

From the report: “This year’s ranking reflects those efforts by the destination. Malaysia continues to maintain its top position in the GMTI 2022. However, the gap between Malaysia and other top Muslim-friendly destinations is narrowing.Indonesia, Saudi Arabia, and Turkey share second place. Uzbekistan has again shown significant improvement in the ranking, climbing 7 positions to be ranked no. 9 this year. Singapore is still the only non-OIC country to make it to the top 20 of the GMTI 2022 rankings.”

These four charts from the report are most instructive on the state of the market:

The overall Muslim travel market globally
South East Asia and other Muslim majority countries dominate as destinations Muslims like to go to.
Amongst the non-Muslim majority countries, Singapore is a huge market, while other Asian countries dominate.
Fascinating chart on the outbound Muslim market from muslim-majority vs other countries where muslims have large populations.

Airlines

United’s MileagePlus Adds Unique Airline Partner, JSX

4 weeks ago

Travelers on private jet-like airline JSX just got another perk beyond skipping busy airport terminals and security queues: they can now earn points in United Airlines’ MileagePlus loyalty program.

JSX flyers can earn up to 100 percent of the miles flown in MileagePlus under the new partnership unveiled Thursday. The pact is the first for United’s loyalty program with a non-traditional airline operator, and the second for JSX, which already partners with JetBlue Airways’ TrueBlue program.

(JSX)

“This unique agreement presents an unmatched opportunity for JSX customers to earn MileagePlus miles and redeem them for travel to United’s global network of destinations,” said Luc Bondar, president of MileagePlus at United, in a statement.

JSX and United said “more cooperation” is planned and will be announced later this year.

JSX describes itself as providing “hop-on jet service.” In practice, the airline sells a premium onboard product on 30-seat Embraer regional jets that fly to and from private jet terminals, which allows travelers to avoid busy airport terminals. It also provides private jet charters. JSX primarily flies between airports in northern and southern California, but also offers a growing network in Colorado, Florida, and Texas.

Business Travel

Oyo’s Homeground Boost From 1,250 New Corporate Customers

4 weeks ago

Oyo has said it has won 1,250 corporate clients in the past three months across India, as business travel recovers in the country.

The new wins come from small and medium enterprises, traditional business houses and conglomerates, startups and travel management companies. Film production houses have also emerged as a key customer category, it said in a blog post on Wednesday.

The company added that it had engaged with 2,800 offline travel agents since January 2021.

Top cities include Bangalore, Hyderabad, Mumbai, Chennai, Ahmedabad, Kolkata, Pune and Delhi.
Its Business Accelerator division has serviced over 6,600 corporate clients since January 2021, it added.

“The appetite for business travel has returned strongly since the frequent change in travel restrictions has ebbed, making travel planning for business trips more certain and predictable. For a lot of our corporate customers, conducting business over virtual meetings was a stop gap and sub-optimal solution,” said Ankit Gupta, CEO of OYO, India.

Compared to leisure bookers, the startup’s business customers receive curated stay options, personalised customer support and integration with their accounting system.

The extra boost comes as Oyo delays its IPO — potentially until 2023. Earlier this month Oyo acquired Dubrovnik, Croatia-headquartered Direct Booker, which has 3,200 homes.

Airlines

U.S. Airlines Paid Record for Fuel in April

4 weeks ago

The dramatic run up in oil prices since Russia’s invasion of Ukraine in February has claimed a new record: the highest-ever average April fuel price for U.S. airlines since record keeping began 22 years ago.

U.S. carriers paid an average of $3.59 per gallon for 1.35 billion gallons of fuel — a tidy $4.85 billion — in April, new data from the Bureau of Transportation Statistics (BTS) show. The cost was up 18 percent from March, and 74 percent from April 2019.

(Tony Webster/Flickr)

Fuel prices in the U.S. have only held above $3.50 per gallon once before since 2000. They hovered between $3.57 and an all-time peak of $4.10 per gallon from June to October 2008, according to BTS.

The average price of fuel is only expected to rise further with Brent crude spiking to around $120 per barrel since the EU announced plans for a partial ban of Russian oil on Monday. On Wednesday, Delta Air Lines raised its second quarter fuel cost forecast by at least 7 percent to an average of $3.60-3.70 per gallon.

Online Travel

The Complexity Headache That Expedia CEO Peter Kern Inherited in 1 Slide

4 weeks ago

Ever wonder about the daunting challenge that Expedia Group CEO Peter Kern inherited from predecessors Dara Khosrowshahi and Mark Okertstrom when Kern took the chief executive spot under Barry Diller in 2020?

The pandemic notwithstanding, Expedia Group captured its infrastructure issues in one slide as part of an investor presentation at Cowen 50th Anniversary Technology, Media & Telecom Conference Wednesday.

Many of the Group’s major brands, from Expedia to Hotels.com and Vrbo, had their own product, marketing and tech teams who were working at cross-purposes and competing against each other.

Competition can light a fire under a marketing group, for example, but did it make sense for Expedia and Hotels.com to bid against one another in Google search, and likely drive up costs?

Apparently not.

Elsewhere in the presentation Expedia noted that before it undertook its drive to simplify things it had more than 10 competing brands, five loyalty programs, more than 10 checkout experiences, and “siloed data lakes.”

In the interim, Expedia Group has made a splash consolidating many of these teams, and shedding brands including Egencia, SilverRail, Alice, Classic Vacations, and Expedia Local Expert. Not to mention BodyBuilding.com, which Expedia acquired when it bought Liberty Expedia Holdings.

The goal is “to build a single tech platform,” the presentation said.

We’ve heard Expedia talk of building a solitary tech platform for many years under prior regimes, but it seemingly never happened.

Travel Technology

Snap Is Launching Dynamic Travel Ads Globally to Target Gen Z Vacationers

4 weeks ago

Snap claimed Etihad trimmed its “costs per flight search” four-fold using Snap’s new dynamic travel ads, which is now rolled out globally.

This ad format, according to Snap, is a travel category expansion that enables advertisers, including airlines, hotels, destinations and tour operators, to engage in advanced audience targeting based on a Snapchatter’s travel intent and backed by local relevance.”

“With travel demand seeing a continued strong recovery in Q1 2022, we were of course keen to capitalize by converting existing customers and, importantly, acquiring new ones,” Phil Dodwell, who heads marketing at Etihad, said in a statement. “However, the marketplace for air travel remains highly competitive so ensuring relevance is key.”

He said the airline will be continuing to use Snap’s dynamic travel ads in the second quarter, and particularly likes the format’s prospecting capabilities.

Snap’s prime users are Gen Zers and Millennials.

Business Travel

Amex GBT Shares Climb 13 Percent After First Day Trading

1 month ago

A smooth, steady start for American Express Global Business Travel during its stock market debut.

The world’s largest corporate travel agency listed on the New York Stock Exchange on Tuesday, under the ticket symbol GBTG, following a business combination deal with Apollo Strategic Growth Capital. The parties initially announced the combination on December 3, 2021.

Shares opened at $7.55 on its first day as a public company. They closed higher at $8.37 after its first day trading on Tuesday.

“We have a significant growth opportunity ahead of us,” said CEO Paul Abbott in a LinkedIn post Tuesday. “As a public company, we have the flexibility to realise Amex GBT’s full potential.”

It was only on May 27, the Friday before the Memorial weekend, that Amex GBT announced it would begin trading on Tuesday. That followed Apollo Strategic Growth Capital shareholders voting to approve its combination with Amex GBT days earlier, on May 25.

As part of its go-public merger, Amex GBT received $335 million from a PIPE, or private investment in public equity, deal with new investors including Zoom, Sabre and private equity group Ares Management.

They join existing backers American Express, Expedia and Certares. Only 15 percent of the company’s stock is expected to be owned by public shareholders.

Investors will be betting on the recovery of corporate travel, which despite rising air fares seems to be on track to exceed spending last seen in 2019 by the end of the year. In April, Amex GBT execs sought to assure investors that the pandemic was just a blip for corporate travel.

They may have just pulled it off.

“For far too long the darlings of travel, like Booking.com and Expedia, have been the focus. With Amex GBT using their SPAC to go public, it now brings corporate travel as a sector and a place to work to the forefront of people’s minds,” said Gavin Smith, director of Element Travel Technology. “It might even help bring those who left, back to the sector. Corporate travel now sits where it should always have done, side by side with leisure.”

However, one investor who wished to remain anonymous told Skift: “We ended up deciding to not participate since the valuation relative to some of the other things we are seeing in the market wasn’t as compelling. It’s a good business with nice tailwinds, it’s just there are more interesting things to be invested in right now.”

Airlines

Memorial Day Air Travelers Top 13 Million, Still Shy of 2019

1 month ago

The U.S. Transportation Security Administration (TSA) screened 13.4 million people over the five-day Memorial Day holiday weekend travel period. That is the highest number since 2019, when TSA screened 14.4 million people over the same period.

But while travel demand came back strong as expected, it was not an easy weekend to fly. U.S. airlines cancelled more than 7,000 flights over the five-day period, according to data from Cowen & Co. and FlightAware. Delta Air Lines, which warned on May 26 that it would “thin” schedules over the holiday weekend, cancelled more than 700 flights.

“We expect a busy summer, and are concerned about the industry’s ability to handle the demand,” Cowen analyst Helane Becker wrote Tuesday. “Delta and JetBlue announced flight cancelations for July and into August as they try to get a handle on staffing. We also expect ticket prices to be high through the summer as demand exceeds supply. The lack of crew members means smaller cities will continue to lose service and pricing should be strong through at least Labor Day.”

Hotels

Marriott Partners With Alipay In China on Bonvoy Perks

1 month ago

Marriott International has signed a new partnership with China’s Ant Group, which owns online payment platform Alipay, to help it drive more business in the region.

Marriott will now give Alipay members a range of benefits when they sign up to Marriott’s loyalty program Bonvoy, including digital coupons for an afternoon tea at its hotels, or the chance to enter a lucky draw by spending at the hotel.

Breakfast promotions are also offered at various cities, including Guangzhou, Shenzhen, Hangzhou, Chengdu and Sanya.

The tie-up is the latest deal in its plan to leverage loyalty to bolster its presence in across Asia.

The hotel group already has a joint venture with e-commerce giant Alibaba in China. Marriott considers its storefront on Fliggy, Alibaba’s travel division where it sells its global hotel inventory, to be a direct-booking channel with costs that are lower than going through online travel agency distribution.

Marriott said this latest Alipay partnership is in addition to the 10-plus million newly-enrolled members the company has gained through various channels since 2017 in China, including through Fliggy, as well as other Ant initiatives.

Marriott International has 450 operating hotels across 23 brands in Greater China.

“To support the recovery of the travel industry, we are looking to offer exclusive travel experiences for high-net-worth members using Alipay,” said Henry Lee, President, Greater China, Marriott International.

Marriott has previously launched Korea’s first-ever co-branded hotel credit cards, and two new co-branded cards have also been launched in Japan.

“Marriott Bonvoy really is at the heart of our consumer strategy and we are doing everything we can to grow the program,” Bart Buiring, chief sales and marketing officer for Asia Pacific at Marriott International, previously said.

Online Travel

Are Uncool Things Like Hotels and Booking.com Making a Comeback at Airbnb’s Expense?

1 month ago

Just look at their market caps — Booking Holdings $92.05 billion and Airbnb a humbling $77.8 billion.

The Wall Street Journal reported Sunday that Booking’s share price has notched “single-digit gains” over the last six months, while “Airbnb’s shares have lost nearly a third of their value.”

Reporter Laura Forman attributes some of the discrepancy to the comeback and relative affordability of urban hotels versus soaring rates for short-term rentals.

Not to mention, we’d point out, seeming out-of-control cleaning fees with little rationale for the heft of the cost.

Airbnb’s average daily rates climbed 37 percent in the first quarter when measured against the first quarter of pre-pandemic 2019, according to the Wall Street Journal. Citing STR data, the story said average rates for urban hotels around the world in April haven’t yet inched back to pre-Covid levels, while the average price of a room night for hotels as a whole has risen less than 15 percent in April compared to the same period three years ago.

Of course, as the story notes, Airbnb has the brand advantage over Booking.com as Airbnb spent less than a quarter of its revenue on sales and marketing in the first quarter of 2022 while Booking shelled out more than half its revenue on sales, marketing and related expenses.

Still, there’s a reason that Booking.com spends so much on performance marketing on Google even as Airbnb has reduced the percentage of revenue it spends on marketing on Google and elsewhere since 2020. The reason Booking.com spends so much? It seemingly is working.

The Wall Street Journal cited Sensor Tower data tallying Booking.com’s app installs in April as being 13 percent higher than in January 2020 while Airbnb’s app downloads fell 12 percent in the same timeframe.

“Ironically, Booking has managed to reinvigorate interest in its namesake brand this year by promoting its tired image,” the Wall Street Journal said. “A Super Bowl commercial for Booking.com featured The Wire star Idris Elba mocking the brand as having ‘never been accused of being sexy, flash or lit,’ unless, he adds, ‘we’re talking literal.'”

We’re unsure how much weight to give to Booking’s Super Bowl ad — which seemed to underwhelm — in its app download number uplift.

The signs of life in Booking’s stock price compared with six months ago has a lot to do with the comeback of cities, the reopening of Europe, where Amsterdam-based Booking.com has most of its strength, and the relative affordability of hotels.

After all, while some people wrote off cities during the pandemic as being permanently scarred, Booking’s Glenn Fogel argued — as did Peter Kern of Expedia Group and Steve Kaufer of Tripadvisor — that urban hotels and cities would be back. It appears as though that’s starting to take shape.