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Lisa Hronek Posts Tagged ‘travel’
Oil spill hurting travel industry on Gulf Coast
As the oil spill continues to wreak havoc on the Gulf Coast and BP’s reputation, business owners along the gulf coast are already seeing business drop dramatically as travelers determine different vacation plans to avoid a leisurely beach stroll over globs of oil and tar.
With the Memorial Day past us, and children about to be out of school for summer, businesses are struggling with how to deal with an issue they can’t control: the oil spill.
A recent article on CNN discussed how hotels, rental, resorts and motels have seen a decline in inquiries and bookings over the last few weeks, as individuals anticipate the worst case scenario from the spill. Businesses fear that travelers assume the oil spill has hit land and created an unpleasant environment for vacationing. Because of this, many hotel owners are encouraging families to post pictures of their trip to show family and friends that the oil has not hit land yet, and some are hoping to put live video feeds of the beach so individuals can see for themselves how the area looks.
What approaches have you seen businesses take to try and encourage travel to the area? What would you recommend be done to salvage travel to the gulf coast?
I’ll keep you posted if we see any direct mail or email in the Comperemedia database pertaining to travel, the oil spill and the Gulf Coast.
Fees are not the answer to profitability
Nothing annoys consumers more than paying for things that used to be free or feeling that they are being nickel and dimed. As the banking industry struggles with how to recoup money lost to overdraft fee income, they are wise to take some lessons from the airline industry.
The airline industry attempted to stem huge financial losses by charging a wide variety of fees. Flyers now pay to book the ticket, redeem frequent flyer miles, make a particular seat choice, change a ticket, check bags, obtain a pillow or blanket, and for food and drinks.
Unfortunately, added fees haven’t propelled the travel industry into profitability. AMR, parent of American Airlines, posted a $1.5 billion loss. US Air, Continental, United and Delta also posted losses. Combined, the industry lost $3.4 billion in 2009.
Southwest, however, was one airline to post a sizeable profit. The company heavily advertised “Bags Fly Free,” and that strategy may have paid off. The company’s Chairman and Chief Executive Gary Kelly attributes the success, in part, to the fees that its competitors are assessing. In a January conference call with Wall Street analysts, he was quoted as saying, “I hope they charge $100 a bag. That would be terrific. We’ll have 100 percent load factors.”
Going beyond the fee
With customer satisfaction, loyalty, and brand image on the decline over the past few years, banks can hardly afford to alienate customers. Rather than focusing on what fees to charge, the industry should focus instead on innovating services and products that give people confidence. It’s not that fees are never justified – it just might not be wise to assess fees on previously free services. In fact, a recent JD Power study indicates that high customer satisfaction rates are possible to maintain as long as consumers perceive that they are receiving sufficient value in exchange.
At the end of the day, customers know that it’s their deposits that fund the banks other, more profitable, activities. So while consumers need a place to bank, the banks need consumers just as much. Shouldn’t there be recognition of the mutual need from both parties?
Cruise lines create “once in a lifetime” vacation opportunities
Travel and leisure companies have been hit hard since the economy plummeted into recession. As travelers were considering how best to spend limited resources, travel companies were figuring out how to draw customers onto their cruise ships. One way observed periodically over the last year has been the creation of themed cruises, positioned as “once in a lifetime” trips to attract customers who would rather pass on “just any cruise” while finances are tight.
Themed cruising started with Disney and the Disney Cruise Line in 1998, which gave travelers the opportunity to enjoy “the Disney experience” on the open seas, extending the “happiest place on earth” to destinations all around the world. In a recent direct mail offer, Disney encouraged families to “Discover an Ocean of Tropical Wonders and Exotic Escapes.” The campaign featured 3-, 4- and 5-night cruises to the Bahamas, along with a visit the company’s “private island paradise, Castaway Cay.”
Royal Caribbean and Norwegian both took advantage of the family draw that has defined Disney’s success by offering Nickelodeon-themed cruises. Royal Caribbean positioned a summer 2009 Nickelodeon Family Cruise as “the family vacation of a lifetime.” In direct marketing tracked by Mintel Comperemedia, prospects were encouraged to book early to take advantage of low prices and “the ultimate summer vacation your whole family will never forget!”
Starting in April 2010, Norwegian will exclusively feature Nickelodeon at Sea on the Norwegian Jewel. The experience has been positioned as a “whole new level of imaginative activities and family entertainment.” It will be interesting to see if Norwegian can be as successful as Disney in creating a long-running themed vacation option for families.
Cruising isn’t just for families, and companies like Carnival and SilverSea have used themed voyages to attract adult travelers. Carnival Cruise Lines informed email recipients that it was “cruising down memory lane” with its Malt Shop Memories Cruises. Travelers were invited to “join us on a journey back to the birth or Rock ‘n’ Roll as we head down memory lane with sock hops, dance contests and live performances.”
SilverSea Cruises offered a Beatles Tribute Voyage in August 2009. Readers were asked to “celebrate the 45th anniversary of the Beatles coming to America” with this 10-day UK cruise that featured a “Beatle Brunch and a disco party.”
Themed destinations have been a huge draw for travelers (think Disney, Las Vegas or Universal Studios) and now cruise ships are trying to create a complete themed experience to provide customers a “once in a lifetime” vacation. Themed cruises have the opportunity to attract curious travelers looking for a new experience and can help create a stronger draw as travelers decide how best to spend their money in a weak economy.
Travel news that’ll pinch your pocketbook
Spirit airlines begins charging for carry-on luggage
Spirit announced recently that it will become the first airline to charge for carry-on luggage. You read that right…a charge for carry-on luggage. The airline is set to charge up to $45 for individuals who bring carry-on luggage that needs to be stored in overhead bins. A reduced fee of $30 could be paid in advance by those who already know they will be bringing luggage that is too large to be stored under the seat.
But with the announcement comes spin. The company has said that it reduced fares across the board, meaning that most passengers who pay a carry-on fee will not see an increase in their total flight price. The company also stated that this move will help the airline empty the plane faster, which would make passengers happier, right?
I don’t know if I buy that. It seems like the itemization of costs will only create a sense of being “nickel and dimed.” The company already charges for checked bags, and those fees are cheaper than the newly announced carry-on fee. I wonder if the company is really trying to increase revenue by encouraging individuals to save money by checking a bag over passengers bringing bags on the plane. What do you think? Will this influence your decision to fly Spirit?
Ryan Air contemplates charge for in-flight restrooms
Be sure to have some change handy next time you fly. Ryan Air, a popular budget airline in Europe, is considering charging passengers to use the restroom.
The company is pondering a small charge (currently equivalent to US $1-$2) for using the bathroom on flights that last less than one hour. Passengers would insert money into a coin-operated bathroom door to gain access. Although the company has announced the consideration, no decision has yet been made.
I could see how this concept might be more accepted in Europe than the US, since many public restrooms are not free. But, do you think this would “fly” in the United States?