Business Travel Briefing
For April 23-May 7, 2020
The briefing in brief: Before Coronavirus (BC): Hotel building reached record highs in March. After Disaster (AD): Hotel occupancy is 23.4 percent. If they finally open Berlin/Brandenburg this year and there are no flyers and no flights, did the airport really open? Air Canada stops all U.S. flying. InterContinental extends elite status. United Airlines is issuing new shares hoping to raise $1 billion after blowing $10 billon in recent years on stock buybacks. And more, including our daily Coronavirus update.

SURE, WHY NOT? U.S. HOTEL BUILDING HITS RECORD HIGHS
If comedy really is tragedy plus time, the lodging industry is going to find this hilarious one day. The U.S. hotel industry had about 215,000 new rooms under construction at the end of March. That's the highest number of guestrooms in the pipeline since December, 2007--and you know how that worked out when the Great Recession hit at exactly the same moment. The inevitable conclusion? The hotel industry really needs to avoid these record-high construction peaks. Something awful always happens. New York, the epicenter of the current pandemic, has the most rooms being built (14,000), followed by Las Vegas (9,000) and Orlando (8,700).

MEANWHILE, BC/AD AND THE CURRENT HOTEL REALITY
Here's an idea: Let's mark all travel stories BC (Before Coronavirus) or AD (After Disaster). The story above gets filed into the BC file. Here's the AD story: Nationwide hotel occupancy for the week ended April 18 was 23.4 percent, down 64 percent from a similar week in 2019. The stats from lodging wizards STR actually are up a tick from last week, but that's not because more travelers are booking rooms. STR suggests the minuscule upswing is due to more health workers using hotels as "home" so they don't infect their families while manning the front line of the Coronavirus. Average daily rate at hotels nationwide is now $74.53, a 42 percent decline from last year.

THE FOREST, THE TREES AND BERLIN/BRANDENBURG
It's been delayed since 2011. It came within two weeks of opening in 2012. In the intervening eight years, many frequent flyers gave it up for dead. But officials affirmed this week that Berlin/Brandenburg will finally open in October and replace the German capital's two existing airports, Tegel and Schönefeld. The problem, of course, is that air traffic has disappeared. Only about 1,000 flyers a day are using the two airports combined during the pandemic. No one has any idea how many travelers will need any Berlin airport in the fall. Which raises this interesting travel-philosophy question: If Brandenburg actually opens in October but there are no airplanes and no flyers to use it, has the airport really opened?

BLAME (AIR) CANADA: AIRLINE DROPS TRANSBORDER FLIGHTS
After the United States, Canada and Mexico jointly agreed this week to "ban" non-essential travel between the countries for another 30 days, Air Canada pulled the plug on U.S. flights. All flights between the United States and Canada, in fact. Every single one. The carrier has reworked its schedules and removed all transborder routes between Sunday (April 26) and May 22. This isn't only a blow for travelers hoping to fly between the two countries. It also cuts U.S. flyers off from Air Canada's international network from its Toronto, Montreal and Vancouver hubs. Even in its shriveled state, Air Canada has been operating more overseas flights than U.S. airlines. Separately, Air Canada now requires all flyers to wear protective face coverings at most airport points-of-contact and in-flight. The move is in response to an order from the Canadian Ministry of Transport.
        Virgin Australia this week entered the Australian equivalent of Chapter 11 bankruptcy after the Australian government refused to bail out the carrier. Another of the flashy, financially unsustainable carriers fronted by Richard Branson, Virgin Australia has racked up A$5 billion in debt and hasn't made a profit in seven years.

INTERCONTINENTAL EXTENDS ELITE STATUS
Elite status in IHG Rewards Club isn't a great get since the perks are limited and rarely guaranteed. That said, InterContinental finally did the obvious today (April 23): It extended existing elite status through January, 2022. Spire Elites, the top-level players, receive additional benefits as well. Moreover, IHG is reducing requirements to achieve elite status during 2020 by 20-30 percent. Complete details are here.
        Air Canada has developed a "stay at home" earnings promotion for its Aeroplan and Attitude frequency plans. Complete details are here.
        ThankYou points generated by Citibank credit cards can now be transferred to the Emirates Skywards program. But you'd be crazy to do it. Skywards offers lousy value on awards--and charges insanely high co-pays, too.

BUSINESS TRAVEL NEWS YOU NEED TO KNOW
Remember forever ago--February--when the Trump Administration told New Yorkers they no longer qualified for Global Entry because the state passed some laws that annoyed President Trump? The move drew a lawsuit from New York Attorney General Letitia James and now a federal judge in New York says travelers can sue the Administration, too. The judge last Friday (April 17) certified a class of hundreds of thousands of New York residents who can now sue the government. "The ban is arbitrary and discriminatory," said Antony Gemmell, a New York Civil Liberties Union attorney arguing the case for New Yorkers.
        Asiana Airlines, which was near collapse before the pandemic, looks to be getting a bailout via two state-run Korean banks. The banks said this week they would inject about US$1.4 billion in the carrier so Hyundai Development, the new owners, can reorganize the airline.

GENIUS! UNITED AIRLINES BUYS HIGH, SELLS LOW
United Airlines spent 80 percent of its free cash between 2014 and 2019 buying back shares. It blew as much as $10 billion on several tranches of buybacks as its share price soared to a 52-week high of $96. But now that it has virtually no revenue coming in the door and this week reported a $2.1 billion first-quarter loss, United has a new idea: a share sale. It hopes to raise $1 billion by selling more than 39 million shares at a price of $26.50. United closed at $25.72 on Thursday (April 23).