Business Travel Briefing
For August 6-August 20, 2020
The briefing in brief: New York City hotels are closing in a hurry. Congress seems to want to waste even more money on the airlines. Porter Airlines delays its relaunch again. American moves Shanghai flights to Seattle from Los Angeles. Amtrak now allows seat assignments on Acela business class. Hertz keeps calling the cops on its renters. And more, including the daily Coronavirus update.

First, New York City was the epicenter of the Coronavirus. That naturally ruined hotel occupancy. When the virus was tamed, New York State decided to keep the infection rate down by demanding 14-day quarantines for all visitors from about two-thirds of the other states. That sort of ruined hotel occupancy, too. Besides, few overseas visitors would risk coming to America because, you know, the Coronavirus. That also sort of ruined New York's hotel occupancy. What's the result of this triple threat? A slew of well-known New York hotels have decided not to reopen at all. This week brings news that more properties are biting the dust. The W Hotel in the city's financial district won't open its doors again. Another, the Andaz Wall Street, claims it is reopening, but it is also listed for sale as a conversion to office space, ironic since the hotel used to be New York headquarters of Barclays Bank. Meanwhile, in Midtown, another permanent closure is the Bryant Park Hotel, a well-known boutique property made famous by Georgia O'Keeffe back when it was known as the Radiator Building. These properties join the Omni Berkshire Place, which announced its closure in June, and The Maxwell, most recently aligned with Marriott Tribute Portfolio. But you might remember the property as the world's first W Hotel when it opened in 1998. And if you're older, you'll remember it as the Doral Inn.

With air travel running at about 25 percent of 2019 levels, even the airlines have admitted that they will have to dramatically downsize to survive. That means staff buyouts and layoffs approaching 50 percent and shriveled route networks and services. That's even taking into account the $50 billion in payroll grants and loans that was part of the CARES Act bailout passed earlier this year. No one in their right mind would think of giving the airlines still more money. Except, you know, some politicians. A large group of Republican Senators this week wrote to Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer supporting the move. Last month a bipartisan group of Democratic and Republican members of the House also called for an extension of payroll support for airlines. And President Trump reflexively voiced support this week. The payroll part of the CARES Act expires September 30. So stay tuned. I'd say there's no appetite for still another tranche of airline funding, but these are crazy times.

Porter Airlines launched in 2006 and instantly brought some style back to shorter-haul flying. It used comfortably configured Q400 aircraft and hubbed at Toronto's City Island Airport, from where you can literally walk through a tunnel into downtown. There were lots of perks, too, especially at its nicely equipped airport gates. Fifteen years later, Porter isn't the airline it was, but it would be unfortunate to lose it, especially on transborder routes. But you do have to wonder about Porter's future now that it delayed its restart again. It originally shut down on March 20 at the height of the first wave of the pandemic and announced a restart date of June 1. That's been delayed several times and news came this week that Porter now won't even attempt to relaunch until October 7. Stay tuned, folks, this may not have a happy ending.
        American Airlines is moving its Los Angeles-Shanghai flights to Seattle. You know, when and if American ever relaunches the route. It has won a "dormancy waiver" extension and now won't have to begin service until March 28. That assumes the United States and China settle their airline squabble, of course. At the moment, flights between the two nations are limited to six frequencies a week.
        Virgin Atlantic has declared Chapter 15 bankruptcy, an obscure section of the bankruptcy code largely used by overseas companies hoping to protect assets from multi-national creditors.

Amtrak has extended advance seat assignments to business class passengers traveling on its high-speed Acela trains between Washington and Boston. Previously, only first class travelers could choose seat assignments.
        IAG, the parent company of British Airways, Iberia and Aer Lingus, is still trying to buy Air Europa, the Madrid-based carrier. It bid about US$1.2 billion in November, but now wants to halve the purchase price. The two sides are negotiating.
        Crossrail, the 73-mile project for London and surrounding areas, has run into still another delay. After cost overruns and previous delays, the first part of the project, dubbed the Elizabeth Line, now won't debut before 2023. The overall concept was slated to cost about 15 billion pounds and open by 2018. Now the project has ballooned to about 18 billion.

Hertz was once the business traveler's go-to rental firm. But lousy service, aged vehicles, repugnant policies and high prices led frequent flyers to defect to players such as Silvercar and National. The loss of its business travel cachet and awful management led Hertz into bankruptcy in May. But Hertz is gonna Hertz, even in bankruptcy. As the Philadelphia Inquirer reported this week, the firm continues to call the cops on renters in good standing. It has not only left renters jailed for hours--and sometimes weeks--it also has led some police departments to refuse to respond to Hertz reports of theft. The complete story is a sad, compelling read. And you'll probably never rent from Hertz again.