Business Travel Briefing:
The Coronavirus Edition
The briefing in brief: Best advice for travelers hoping to make changes or cancellations during the chaos? Wait! Notable route cancellations in the blizzard of new changes. Airlines will expect you to pay for the flight cuts they are making. Before Europe was a Coronavirus battleground, airlines were diverting Asia planes to transatlantic routes. And much more.
THE HOTEL INDUSTRY IS GETTING SLAMMED, TOO (3/19)
My bad metaphor about business travel is that the airlines drive the bus. They get the bulk of the blame and credit--and almost all of the publicity. But the Coronavirus Collapse is hammering the hotel industry around the world--and it has begun to bring domestic lodging to its knees. In the last two weeks, nationwide occupancy has fallen more than 20 points, nightly rates are plunging--and the outlook is dire. According to figures released by STR, the best-known hotel research firm, nationwide occupancy fell 7.3 points during the first full week of March. Last week, occupancy plummeted 24.4 points compared to the second week of last year. About half the nation's hotel rooms were empty last week. Revenue per available room (revPAR), a key indicator of lodging health, has fallen off a cliff, down more than 30 percent. Citywide occupancy in Seattle, one of the first U.S. Coronavirus hotspots, fell below 33 percent. In New Orleans, average daily rate has declined by nearly 25 percent. In San Francisco, occupancy has fallen below 40 percent and it's below 50 percent in New York. Hotels are beginning to put the key in the door, too. In San Francisco, for example, at least a half dozen properties are closed, including the W Hotel. More Bay Area hotels will close in the weeks ahead as the area's shelter-in-place rules take hold. The current estimate of occupancy is 10 percent, according to a San Francisco hotel trade group. Meanwhile, Marriott has closed dozens of properties it manages across the nation and has begun mass layoffs. And it can't be good for Hawaii hotels that governor David Ige has told visitors to stay away from the state for 30 days. Meanwhile, most of the casino-hotels in Las Vegas have shut down.
AIRPORTS ARE EMPTYING OUT. HERE ARE THE NUMBERS. (3/19)
If you were actually in an airport this week, you couldn't help but notice closed lounges, empty shops, shuttered dining facilities--and the lack of lines at security checkpoints. But the numbers are actually breathtaking. The Transportation Security Administration, never known for its friendly, customer-facing policies, has nevertheless done us a great service. It now posts daily screening volume on a special page
. On March 1, for example, the TSA screened 2.3 million flyers nationwide, a slight increase over a similar day last year. It's all downhill from there. All of the 16 other days listed by the TSA as of 8pm this evening (March 19) have shown increasingly steep declines. By Tuesday (March 17), screening fell below one million passengers. That's the lowest number of travelers since February 1, 2011, when much of the country was buried in snow
. It was May, 2004, when a normal day's volume was below a million passengers.
CBP STOPS GLOBAL ENTRY, PASSPORT SERVICE CUT (3/19)
U.S. Customs shut down operations of all Trusted Traveler application centers today (March 19) until at least May 1. That includes access to the off-airport public centers that process Global Entry applications and Canada/Mexico operations such as NEXUS, SENTRI and FAST. One thin silver lining: CBP's Enrollment on Arrival program remains operational. If you're conditionally approved for Global Entry, you can complete your application at any of the 60 airports that offer the service. But better hurry: Customs agents tell me they expect most airport-based offices to close soon, too.
Passport applications and renewals
have been suspended. The State Department says only emergency travel within three days of departure will be considered for service. See here
BEST ADVICE? WAIT. TO BOOK, TO CANCEL OR TO CHANGE (3/12)
As chaotic and bizarre as the last few weeks have been, there is one bit of advice that is still golden: Wait. Want to cancel? Wait. Want to change? Wait. Want to book? Wait. The travel industry has been turned upside down again and its first impulse is to try to rip you off, especially when it comes to the cash it already wrestled from you. But reality often sets in and they loosen the rules. And even if reality doesn't change them, events overtake airlines and hotels. Last week, for example, United Airlines decided it could deny you a refund and unilaterally consider you "reaccommodated" even if its involuntary flight change was 25 hours earlier or later than your original flight. That might conserve cash, but it infuriates customers and, as United learned this week, probably isn't legally supportable. So now the window for involuntary changes before a refund is down to six hours. Which is
longer than the previous two-hour rule, but generally acceptable as the carriers have been forced to slash schedules. Another example: You wanted to cancel your flight to Europe next week or next month, but the airline wanted a huge cancellation fee. However, last night's not-really-a-travel-ban travel ban announced by President Trump is leading carriers to cancel buckets of flights. Now you can have a refund because the flights may no longer exist. The same is true for hotels, which started out playing hardball on changes to nonrefundable room rates, but are increasingly letting you make no-fee alterations. So if you don't like what your supplier is saying today, wait until tomorrow or next week. It's the Coronavirus crisis version of "hang up and call again" when you don't get the answer you want.
NOTABLE LOSSES IN THE BLIZZARD OF CANCELLATIONS (3/12)
Airlines are dumping flights and reworking route maps faster than the Dow Jones and the S&P 500 are falling. It's impossible to keep up, but thought these cancellations merit special attention:
is killing its all-business-class London/City-New York/Kennedy route until September 1. This comes despite the fact that Britain is outside the Schengen Area and exempt from the Trump travel ban.
is delaying its launch of flights between Chicago/O'Hare and Tel Aviv. The service was due to return to the El Al schedule on March 22, but has now been delayed until June 28.
is dumping flights between its San Francisco hub and Northwest Arkansas (XNA), essentially Walmart's hometown airport. The route is suspended between April 1 and October 1.
will drop all
U.S. flights to Helsinki from next week through mid-April. That won't just make it harder to get to the Finnish capital, it eliminates one of the best ways to fly to destinations in Russia and the Baltic States.
AIRLINES CUT SERVICE AND EXPECT YOU TO PAY FOR IT (3/5)
This was the week when U.S. airlines got serious about combating collapsing passenger traffic due to real and imagined Coronavirus fears. Did they initiate systemwide fare sales to stimulate discretionary travel demand? Um, well, no. Did they reduce award prices to incentivize flyers to fill empty seats? Er, no. Did they announce pay-coach-fly-premium upgrade schemes? Appeal to our patriotic feeling about travel? Place a single advertisement promoting their product? No, actually, they did none of those things. So what did they do to follow up on last week's gimmicky change-fee waivers? They cut capacity and began putting aircraft on the deck, where they're guaranteed
not to generate any revenue. United Airlines said it would slash domestic capacity by 10 percent and international traffic by 20 percent in April and May. JetBlue Airways plans a smaller, but no less significant, cut. American Airlines is dropping flights from New York to places such as Savannah, Georgia, and Bermuda. Also going are routes between Chicago and Duluth, Minnesota, and Charleston, West Virginia. What's more, the carriers will expect us to pay for their cowardly decision to ground planes and cut service. Several airline executives I've spoken to this week say it is inevitable that the carriers will go to Congress in the weeks ahead and lobby for a 9/11-style bailout. As you recall, Congress literally gifted the carriers $5 billion after the terror attacks, the equivalent of almost $18 a citizen
. In subsequent years, Congress also allowed airlines to collect taxes and keep the revenue rather than pay it to the Treasury. "We will need help," one C-Suite executive told me via E-mail on Wednesday (March 4). "Planes are emptying faster than you could imagine." Of course, airline imaginations are very limited. After all, these are people who can't think of anything to do with aircraft but ground them and guarantee losses.
WHERE ARE ALL THOSE GROUNDED ASIA PLANES GOING? (2/20)
Hundreds, perhaps thousands, of hotels are closed in China as the Coronavirus ravages travel. And there's nothing much the hotel industry can do about those empty assets. But the airlines' most valuable asset--widebody aircraft--are mobile and they can be deployed elsewhere. So where are the airlines using the diverted Asia aircraft? United Airlines, which has the most service into Greater China, has moved an estimated 18 widebodies to domestic routes. Until at least late April, you may find some Boeing 777s and 787 Dreamliners on the Denver-Los Angeles and Chicago-Las Vegas runs. There are also some diverted widebodies on the San Francisco-Cancun route. American says its Asia aircraft will be deployed on routes from its Dallas/Fort Worth hub to Europe and some high-yield domestic markets. Delta Air Lines has diverted some Asia aircraft to transatlantic routes, but the carrier won't give details. Air Canada is also moving Asia planes to Europe runs. British Airways is temporarily deploying Asia planes to routes from London to Miami, Seattle and Cape Town, South Africa. What's it all mean? For starters, hope for some lower fares here and there as the airlines work to fill those extra seats. Perhaps you'll finally score an upgrade, too. And do check your boarding assignments. There'll be a lot of seat juggling as the carriers swap out aircraft. Keep an eagle eye on your supposedly "confirmed" seat assignments on upcoming flights.