Business Travel Briefing
For March 11-March 25, 2021
The briefing in brief: Airlines get another $14 billion bailout, but iconic hotels are closing their doors. Air Canada introduces "status passes" that elites can gift to other flyers. American and Alaska airlines add flights in Austin. David Neeleman's Breeze Airways flies over another regulatory hurdle. The Dulles rail link is delayed again. Hertz cements its reputation as the worst of the worst. And more, including the daily Coronavirus update.
AIRLINES GET ANOTHER BAILOUT, HOTELS TAKE THE PIPE
President Biden today signed a $1.9 trillion stimulus bill that includes much-needed relief for many people and institutions leveled by the year-long (so far) Coronavirus pandemic. And, of course, airlines--the "undeserving poor," as Alfred P. Doolittle called himself in My Fair Lady
--bagged another $14 billion in grants. That pushes the total airline bailout close to $100 billion in loans and outright grants in the last year. But hotels? Not so much. Some have
scored loans through the PPP process, but many have not and are out of options. In fact, many of the best-known hotels in the country are going south.
The Fairmont San Jose
, the largest hotel in Silicon Valley, abruptly shut its doors last Friday (March 5) and filed for bankruptcy. The 805-room hotel was running at 7% occupancy, according to the owners and is on track to lose $20 million this year after losing $18 million last year. The property says it may
reopen in several months with new management and a new brand flag. But that's not a given.
The Edition Times Square
, part of the chain that celebrity hotelier Ian Schrager created with Marriott, is headed to foreclosure. The 452-room property, once valued at $2 billion, has been closed for months and the owners have defaulted on $650 million in loans. Meanwhile, seven more limited-service Manhattan properties--Hampton Inn, Candlewood Suites and Holiday Inn Express branches--have changed hands after a $385 million loan foreclosure. The former owner wrote off the loans and walked away from the hotels.
Two iconic Cleveland hotels
are in a mess. The 484-room Westin Cleveland Downtown, once the centerpiece of the city's revival, may close next week. The owners are on the hook for $35 million of unpaid mortgage principal, about $500,000 in interest, $1.4 million in late fees, $1.5 million in property taxes and an $860,000 loan from the city. Meanwhile, the City of Cleveland was contractually required to make a $22 million emergency payment to keep the 600-room Hilton Cleveland Downtown open. The five-year-old property is part of the city's convention center complex and a 2014 agreement makes Cleveland taxpayers the funders of last resort.
AIR CANADA CREATES 'STATUS PASS' FOR AEROPLAN ELITES
Air Canada has finally unveiled the rest of its long-promised new benefits for elite players in its overhauled Aeroplan
program. Most notable? A "status pass" that allows you to gift certain perks--three checked bags, priority airport handling and boarding, Maple Leaf Lounge access--to other travelers for one roundtrip. Flyers at the 50K level can choose two status passes a year while 75K flyers can choose three. Super Elite flyers earn two each year and can choose as many as four more. The twist is that most of the new benefits, including status passes, are not standard benefits, but must be chosen in bundles by elite travelers. Full details on the typically convoluted Air Canada approach to elite benefits are here
World of Hyatt
is raising the award price of ten hotels on March 25. Most notable: the Andaz Scottsdale and the Park Hyatt Aviara (a former Four Seasons) in Carlsbad, California. Both jump to a Category 6 redemption (25,000 points) from Category 5.
, which American Airlines pledged as collateral last year for a $7.5 billion CARES Act loan, is being refinanced. American hopes to raise about $10 billion to pay off the government loan and have more working cash. The rate American expects to pay is near junk-bond level, however, with interest as high as 5.75% on some parts of the borrowing.
is extending your Executive Club tier status for another year.
ONEWORLD CARRIERS ARE BETTING BIG ON AUSTIN
is currently battling with Texas officials
over its decision to continue with a mask mandate while the rest of the state goes maskless. But the skirmish isn't affecting airline ardor for flights to the Texas capital, one of the fastest-growing urban areas in the nation. American Airlines and its Oneworld Alliance partners are adding flights there even as Delta Air Lines last week reaffirmed its decision to maintain Austin as a focus city. American, for example, is adding ten new or revived routes from Austin, including nonstops to Nashville, Las Vegas, Orlando, New Orleans
. Most flights launch May 6, but some will debut during the summer. Meanwhile, Alaska Airlines is adding an Austin-Boise
route on June 17. (Alaska Air also will begin Boise flights to Chicago/O'Hare
, an American hub.)
and eponymous Brussels Airlines get their transatlantic flights back next month. The Lufthansa Group airline will resume nonstops to New York/JFK
on June 14. Flights to Montreal
, originally scheduled to launch last March, will finally begin June 15. Brussels Airlines hasn't flown any transatlantic routes since March, 2020.
BUSINESS TRAVEL NEWS YOU NEED TO KNOW
, the latest start-up from JetBlue Airways
founder David Neeleman, this week received Transportation Department approval to launch. It's been approved to operate 22 aircraft. But don't book tickets just yet. There is still a list of bureaucratic hurdles to clear before the carrier can begin flying. Breeze has yet to detail routes, prices or in-flight service options. Stay tuned.
has added private bedrooms and roomettes on two overnight trains in the Northeast Corridor. Trains 66/67 connect Washington/Union and Boston/South Station with intermediate stops at New York/Penn and other cities.
won't get its Silver Line rail service this year after all. The 23-mile, six-station extension from the existing Reston stop of the Washington Metro won't begin operating until at least 2022. The service was scheduled to begin in 2018.
YEAH, HERTZ IS THE ABSOLUTE WORST ...
The long, sad decline of Hertz to bankruptcy status from its once-lofty perch as the go-to rental firm for business travelers has been frequently documented here and elsewhere. And it's not just old and dirty cars, broken reservations, PlatePass scams and other day-to-day annoyances, either. The company has thought nothing of calling the cops and trying to jail customers because Hertz didn't realize that vehicles already had been returned. But the news emanating from Lansing, Michigan, this week makes it all pale by comparison. As the Lansing State Journal
reports, a man spent five years in jail, wrongly convicted of murder, because Hertz ignored subpoenas and court orders to turn over exculpatory evidence. Simply producing the receipt of the Detroit man's rental would have proven he could not possibly have committed the crime. The man is now suing Hertz, but whether he can recover any monetary damages is questionable due to its bankruptcy filing ten months ago.