Monday, June 30, 2008

Fall Airline Capacity Cuts

There’s a great graphic on the USA Today website showing state-by-state airline capacity cuts (announced so far) for October 2008 (over the previous year).

Saturday, June 28, 2008

The Future of Air Travel: Yes, Still Another Opinion

The news is always dire regarding today’s airline environment.

There’s another fascinating article about the near-future prospects of the U.S. airline industry on the Christian Science Monitor website, which includes this quote from former American Airlines chairman Robert Crandall.

“Unless something is done to move toward some kind of fix, we’re going to see every one of our major airlines in bankruptcy.”

Friday, June 27, 2008

Good, Bad, Indifferent Frequent Flyer Credit Card Advice

There is a lot of good advice, mediocre advice, and bad advice out there about credit-card frequent-flyer miles. Take everything you read (our blog included) with a BIG grain of salt, as it’s frequently colored by the writer’s experience, research (or lack thereof), timeliness, and a host of other factors. For example, we were disappointed in a recent post on Budget Travel about airline and bank cards.

In the airline card section of the article, the writer mentions cards from Northwest, British Airways, JetBlue, Delta, and American. Does he think these are the best? Or the only ones? In the bank card section of the article (several clicks away, as is always the case with About’s articles), he lists Capital One, Citi Premier Pass, one American Express card, and a couple of obscure regional bank cards (does he not know about Merrill+, several other Amex cards, and others?). And all the hotel credit cards (Starwood, Hilton, etc.) that allow transfers into airline programs aren’t even mentioned.

Sometimes the article mentions that a card carries a 3% foreign-exchange fee, most times it doesn’t make note of that (implying, to us, that the card does not charge the fee, while in reality just about every card does.) And in the description of the one card which does not charge any forex fee – Capital One – that fact isn’t mentioned.

Finally, to us the worst inclusion is noting all the different APRs the cards carry (which, of course, vary over time and by targeted offer). The APR should be a non-issue (except for any 0% initial balance-transfer offers). If you carry a balance you should use a very low-fee card and totally ignore any frequent-flyer or reward cards (all of the lowest-fee cards we’ve seen do not offer any sort of reward program).

The lines of journalism and sales continue to blur. We wonder if most of these articles are posted so that readers will click the in-line links (in this article, it’s the “fine print” link after each card description) that go to the card website so that the web publisher (in this case About) can make some revenue. Cynical is our middle name.

Wednesday, June 25, 2008

Boomer/Senior Travel – Thoughts & Predictions

Much has been made of the coming retirement of millions of baby boomers. This generation is supposed to be the wealthiest in history; to be interested in travel and recreation; and is expected to (bad pun alert) fuel the future of the travel industry (in addition to supposedly draining Medicare and social security).

One travel newsletter from 2003 said:
“Over the next two decades, the post-50 generation (don’t ever call them ‘seniors’) will be the major force pushing travel and tourism numbers to all-time highs. They have changed every other economic and business dynamic in the U.S. for the past 50 years, so is it any surprise that this population will change travel industry dynamics for years to come?”

And one from 2006:
“Over 55 million baby boomers are getting ready to retire. When asked what they intend on doing, travel and see the world is on top of there [sic] list.”

And others are still (late 2007) tooting the same horn:
“This generation is more use [sic] to traveling and so they look for exotic destinations and interesting sites to keep them entertained. It takes a lot more to make them happy than it did the generation before them.”

(Aside from all the bad grammar), we’re skeptical. Our guess is that baby boomers or new seniors (let’s call them BBS – Baby Boom Seniors) will be pulling in their horns. Air travel is uncomfortable (especially in economy, with cramped seats and no in-flight amenities), the airport experience is dreadful (thanks mostly to TSA), everything is becoming an unknown hassle (do I have to pay 25 bucks to check a bag? to change my ticket? to take a pee?), and it’s all getting more expensive every day.

So why should BBS travelers turn out any different from previous senior generations? Those generations occasionally took cruises, went on group tours, bought huge RVs (which they now can’t afford to gas up), spent time with family, and overall just traveled less. They wanted safe, simple, easy travel. And they were bargain-basement shoppers.

A very wealthy couple we know has traveled the world for years, flying to someplace exotic and exciting every couple of months. Lately, though still in their late 50s, they drive, they take at most one big air trip a year, they complain bitterly about the few short annual domestic flights it’s necessary for them to take, and they have adopted leisure activities which keep them more locally focused.

We expect that BBS travelers will also fly less, drive more, take group tours and cruises, and stay close to family. Unless the air travel industry (not just airlines, but all aspects of air travel) sees the light, this huge demographic of wealthy potential travelers will decide to do something else. And that something else will include flying as little as possible.

Arthur Frommer – the ultimate senior budget traveler – is constantly discussing cheap this, cheap that: cruise deals, affordable lodging (motel chains), the cheapest destinations, and free entertainment once you’re there. Wouldn’t want to splurge on anything, you know. It’s as if now that BBS have both the time and the money, they want to hang onto their cash until they die. This certainly isn’t the same generation that a few decades ago claimed to want to die owing the credit-card companies as much money as possible.

From a marketing standpoint, the travel industry certainly hasn’t yet gotten the message. Most travel ads feature darling 20- or 30-somethings looking sexy and acting trendy. BBS travelers really don’t want to be around those folks. BBS travelers may not want cheap lodging (per se), but want inexpensive lodging (a significant difference). This generation will be the ones most able to pay $10 for a wine tasting, but also the ones most likely to complain about it.

And while the BBS travel demographic is technologically savvy, it will shy away from the latest and greatest web schemes. It really doesn’t want viral videos, to be inundated by obnoxious music and advertising, to figure out what YouTube or Facebook are all about, and to be challenged by tiny type and obscure navigation tools. We actually wonder if the BBS traveler will fuel a resurgence of print travel media. We wouldn’t even be surprised to see brick-and-mortar travel agencies make a comeback.

It seems mostly that for the BBS traveler, it will be about the How of travel, rather than the Where or How Often. BBS travelers will focus on how well the travel experience meets their needs. How easy is it to make reservations? How comfortable is the flight/room/seat cushion? How many other people “like me” will be where I’m going? How much outside my comfort zone am I willing to go just to see something unusual? How can you, Mr. Travel Provider, make my experience easier, more comfortable, and cheaper?

The BBS generation may, indeed, prove to be a boon for many sectors of the economy (financial services, healthcare). As for the travel industry, if oil prices have reached a level that will mean $5-a-gallon gas for the rest of our lives and cheap airline tickets a thing of the past, our guesses for American BBS travelers are: cruise lines, especially those serving north and central America (less flying); tour companies offering canned (safe and easy) travel to international destinations; and more travel to U.S. destinations (New England, California) which are within one-day drives of large population centers.

And if this large, impactful generation travels less – just when the industry expects it to travel more – all travelers will see changes in the airline/travel industry that we might not even begin to imagine.

Monday, June 23, 2008

An Upside to Higher Airfares?

We’ve recently suggested that if you’re earning miles/points with a credit card, it might be better to go for cash back rather than dump credit-card miles into a frequent flyer program. Especially with airlines teetering on the edge, reducing capacity, and merging.
But now with higher airfares, unless the airlines raise the number of miles required for an award ticket (always a distinct possibility), your miles may become “worth” more as airfares rise. If you previously used 25,000 miles to acquire a $350 ticket, you may now be using 25,000 miles for a $600 ticket.

We still prefer cash-back if we can get 3 percent on our credit-card purchases. But getting a little better than 2 percent (as in the above example), we’d be getting close to sitting on the fence as to which is the better value.

And of course, this all assumes you’re using your miles to get a basic economy ticket – if you’re using your miles for upgrades, that also changes the equation. It also assumes that the availability of frequent-flyer seats remains relatively the same (not necessarily a safe assumption in the current airline environment).

Friday, June 20, 2008

International Credit Cards Accepted In The U.S.

Here’s the last in our short series about U.S., International, and Frequent-Flyer credit cards. (To see other entries, click "ATM and Credit Cards" in the Topics list at right.)

Most international visitors to the U.S. know that Visa and MasterCard (no matter what country they’re issued in) are generally accepted everywhere. Many U.S. merchants also accept other cards – most notably American Express and Discover. In smaller communities or at smaller businesses, Visa and MasterCard may be the only cards taken.

What you may not know is that several other internationally issued cards are accepted within the U.S. JCB (Japan) and UnionPay (China) cards are (supposedly*) accepted anyplace in the U.S. that displays the Discover logo, even if the business isn’t aware it can accept those cards. Likewise, Diners Club cards are accepted in the U.S. and Canada anywhere that MasterCard is taken (most newer Diners cards should have a MasterCard logo on either the front or back). Things with Diners/Discover will probably change in the future, as Discover has purchased Diners, with integration of their card programs scheduled to take two to three years. Finally, the Maestro card (a MasterCard debit card, widely used in Europe) is accepted anyplace that displays a MasterCard logo.

[*We recently received a JCB card, and it was not accepted at a Discover merchant. We were told by JCB that the Discover integration is not yet complete. We’ll keep testing the card, and post a JCB update in the near future. The JCB card has the potential to be a useful travel tool.]

Wednesday, June 18, 2008

China Unionpay Credit Card

Since we’ve been researching international credit cards, and recently applied for and received a Japanese JCB card, we’ve been looking at other “unusual” credit-card options.

The China Unionpay card is the largest card issuer in China, with more than 1 billion (yes, we said billion) cards issued, and is accepted in 26 countries. It doesn’t appear likely that Americans can obtain a China Unionpay card (unlike the JCB card, which is available to residents of some U.S. states), but it’s worth noting that U.S. Discover cards are supposed to be accepted at China Unionpay merchants throughout China. If you’re going to the Beijing Olympics, don’t leave home without your Discover card. (How we wish we could read this Unionpay “Club” page. It’s fun just clicking on the photos.)

In our odd quest to have as many “different” credit cards as possible, we’ll keep our eyes open for ways that we can get an actual China Unionpay card (rather than just a Discover that may work on their system).

Tuesday, June 17, 2008

OpenSkies Concierge

British Airways’ “new” sub-airline, OpenSkies, has announced a concierge service that “contacts you within 24 hours of booking your ticket” to see if there’s anything they can help you with (sell you) in either New York or Paris. Nice differentiation, but really useful? Maybe they need some extra excitement, since they were originally going to be an “all business class” airline and now they’re just a typical three-cabin airline – “Economy, Prem+, Biz.”

Saturday, June 14, 2008

The Future Airline Landscape

The financial press has a slightly different take on the future of U.S. airlines than do the industry pundits. In a MarketWatch article yesterday, speculation varied from “there’s going to be just three global airlines and the low-cost carriers are going to become feeders,” to “domestic fliers on network routes...are going to find themselves on the equivalent of an airborne school bus,” and “people dependent on regional airports will likely see their fares jump, by up to three times what they've been used to paying.”

The article (oddly titled In 2010, U.S. Airlines Are Smaller, Maybe Smarter: Industry Could Stabilize for the Benefit of Passengers and Investors) speculates that Southwest, Air Tran, and JetBlue will thrive in a new domestic airline environment. As for legacy carriers, Credit Suisse upgraded its rating on Continental’s stock, while a CreditSights analyst put United at the bottom of the survivors list. Credit Suisse also noted that if the legacy carriers slash as much capacity as they’ve announced, they will wipe out the last 10 years of their domestic growth.

Lastly, to give a sense of the impact of fuel costs, the article notes that US Airways said that its average domestic roundtrip ticket will need to be priced at $299 just to cover its costs, up from $151 in 2007 and $70 in 2000.

Our take-away for consumers:

  • Buy airfare early (to lock in lower prices), or...
  • Wait until as long as possible to buy airfare (in case your carrier goes bust or flight schedules change)
  • Spend those frequent flyer miles now
  • Consider not even bothering with non-flight miles, and go for a cash-back credit card instead
  • When flying a U.S. legacy carrier, consider crediting their miles to an international airline in the same alliance
  • Drive instead of fly for shorter and/or last-minute trips
  • Start building a flying relationship with a low-cost carrier that serves your market and preferred destinations
  • Assume all the chatter, news, and advice will change on a yearly, monthly, weekly basis

Friday, June 13, 2008

Tourists Tourists Everywhere

If you’ve read some of our previous posts, you know how much we love useless surveys and lists.

Online travel company Expedia recently surveyed more than 4,000 hoteliers, asking their opinions about the best and worst travel traits and habits of various nationalities. Expedia chose hoteliers, because: “Hoteliers are the experts when it comes to interacting with tourists.” Uh huh.

  • Complain most about accommodations: Americans, Germans, French
  • Best fashion sense: Italians, French
  • Worst fashion sense: Americans
  • Overall best tourists: Japanese, Germans, British
  • Best at learning a few local words: Americans
  • Least likely to use a few local words: French, Chinese, Japanese
  • Least interest in local food: Chinese, Indians, Japanese
  • Most “fiscally conservative” (we assume this means cheap): French, Dutch, British
  • Tidiest (leave those hotel rooms clean): Germans, Japanese, British
  • Most generous (we assume this means tips): Americans, Canadians, Russians
  • Noisiest: Americans, Italians, British
These tourists are from ....

Thursday, June 12, 2008

Fee-dom In The Air

Rick Seaney of FareCompare has a great chart of current domestic airlines’ various (and extensive) fees.

Wednesday, June 11, 2008

How To Take A Wine-Tasting Tour

Whether you’re a wine-tasting newbie or an experienced wine-country traveler, there are many things you can do to enhance your experiences. Most of the following information applies to wine regions within the U.S. – some international wine destinations (France, for example) do not have the same “wine tourism” attitude we do in the states.

  • Make some choices before you go. If this is your first trip to wine country, you might want to go to some of the big names – for example in Napa you might visit Mondavi, Sterling, and Beringer.
  • Visit some smaller wineries. Even if you’re a wine-tasting newbie, take some time to visit several smaller wineries – at the smallest ones you’ll have a good chance that the winemaker/owner will be pouring in the tasting room, and you’ll have some great conversations.
  • Make appointments. If there’s some place you really want to see (especially small wineries) make an appointment in advance.
  • Don’t try to do too much each day. We find that three to four wineries in the morning, and another three or four in the afternoon, are generally more than enough.
  • Buy some wine. Unless the wine just isn’t enjoyable, purchase at least one bottle of something you enjoyed at the tasting room. It will probably taste even better at home.
  • Don’t be afraid to pour. Even the small tasting amounts can add up. You’re there for wine tasting, not wine drinking. The pour bucket is totally acceptable to use.
  • There are no “bad” wines. A wine might not be to your tastes, but don’t say, “that’s awful.” If you need to express a negative opinion, just say that the wine isn’t your style.
  • Not all wineries charge. Most smaller wineries – and ones in smaller regions – do not charge for wine tasting. In our recent travels, we’ve seldom been charged for wine tasting. But...
  • Be prepared to pay. Many wineries, especially in Napa, now do charge for tasting. Some apply the tasting fee to purchases, others don’t. Also in Napa, be prepared for the “Disneyland” experience – at some big and popular wineries, it’s now become industrial tourism, with complimentary souvenir tasting glasses (after you just paid $10 for tasting), huge cheese and gift shops, and tour busses lined up outside.
  • For the big wineries, go early. And at any time of day, if there’s a tour bus in the parking lot, go elsewhere, fast.
  • Take a tour or two. We’d suggest taking one “big” winery tour, and a smaller one. On a recent trip to California, Washington, and Oregon, our big tour was at Benziger in Glen Ellen (Sonoma Valley), where the 45-minute tour goes through the vineyards, the production facility, and the cellars, ending with a tasting. Our small tour was just the two of us (the other three guests were late), at Mayacamas (outside Napa Valley) where we witnessed what winemaking was like a half century ago – not much has changed, and that’s all for the best. Note that the small Mayacamas tour and tasting was free, and the big Benziger had a charge. Both were excellent tours, nonetheless.
  • Explore not just smaller wineries, but smaller regions. On that recent trip, we found several good wineries outside Hood River, Oregon, and wanted to spend a lot more time at the wineries in Amador County in the Sierra Foothills.
  • Be enthusiastic and appreciative. You just might be offered a special wine, or be offered to taste the whole tasting list, rather than just the limit of four (or however many) for free.

Outside B.R. Cohn winery, Sonoma

Monday, June 09, 2008

Flying vs. Driving

Several recent surveys seem to indicate that many vacationers are forgoing flying – choosing to drive instead, even considering gas prices. So we thought we’d do a quick back-of-the-napkin comparison.

Say you’re planning a week or longer leisure trip along the west coast, and weighing the costs of flying versus driving. Let’s pretend it’s 800 miles one way – far enough that it’s a two-day drive, compared to a one-stop flight (which, of course, will take all of a day each way, with diving to the airport, security, plane change, and car rental time). If you can afford the extra day each way, here’s our very simple breakdown:

Cheap flight $300 each, x 2 for a couple = $600
Cheap car rental = $540
Airport parking $10/day x 7 days = $70
Total for transportation legs = $1,210

Gas at $4.50/gallon = $450
Lodging at $150/night x 2 nights = $300
Breakfast & dinner on the road x 2 = $120
Total for transportation legs = $870

So, for $340 less, but two extra days, you get to take your golf clubs, lots of luggage, and bring home cases of wine or gourmet foods.

If you’re a family, those extra airfares for the rest of the family send this comparison out the (car) window. As will extra-baggage fees if you want to travel with the luxuries you can stuff in your car for free. And if you want to upgrade to a decent car.

You don’t have to take your shoes off to go through security to get to your car. You can snack as you want (better and cheaper, too). You can still feel your butt even after a day of driving because you can stop to stretch and move around. If you have pets and can find pet-friendly lodging, you can take the critters and save on kennel costs.

You (probably) won’t be made to feel like a criminal by the U.S. government (TSA). You’ll see some incredible scenery along the way.

Finally, the cheap $300 airfare example we’ve used may soon be a thing of the past. Is it surprising that the U.S. airline industry is in deep trouble?

Mt. Shasta, California

Sunday, June 08, 2008

Premium Economy Updates

It looks like Singapore Airlines is phasing out its Executive Economy seating on the LA and New York to Singapore flights.

United has begun selling their Economy Plus upgrade at time of online ticket purchase.

And add British Airways’ Open Skies New York-to-Paris subsidiary airline to the list of those offering premium economy seating.

We wrote more about premium economy offerings here and here.