The Brand Man Speaks

Corporate Group Travel down dramatically; Will the word "Resort" be dropped from hospitality brand names?

The economy has had an enormous negative impact on bookings at hotels and resorts throughout the US. Especially hard hit have been hotels that cater to corporate groups as business travel has been reduced dramatically across the board.

A recent report indicates this may not be the only or primary reason that hotels that live off corporate business are sufferings so much. Blame the AIG fiasco last year at the St. Regis Hotel in Dana Point, CA. While banks were being bailed out to the tune of billions, AIG executives were partying like it was "1999" at the St. Regis, running up a nearly $500,000 bill. Needless to say the negative publicity this event generated was unprecedented in corporate travel circles.

Since that time the St. Regis Hotel and Resort filed bankruptcy as bookings dropped to such low levels that the facility could not pay its creditors. But the mess hasn't just impacted the St. Regis.

It turns out the word "Resort" in a hotel's brand name or in the parent company's name may now be a kiss of death to that hospitality operation. Apparently, due to the AIG backlash, corporate travel groups are told to avoid bookings at ANY facility that uses the name "Resort" to avoid the possibility of communicating corporate partying vs. real work.

This has hit the top end hotels mostly but even properties with few frills are feeling the impact if their corporate parent's name includes the "Resort" word.

Hotels in South Florida, which has been a popular US destination for corporate retreats and meetings in the past, are complaining heavily that because so many of them are called resorts or affiliated with resorts they are no longer being considered by corporate travel planners.

Will this lead to the dropping of the word "Resorts" from hotel brands? It could if this AIG backlash continues for much longer. One travel planner indicated he was told he couldn't book any meetings with an organization that had the word "resort"  in its brand name--- indefinitely. Wow! If that is true for lots of other travel planners that is very bad news for "resorts" and the hospitality industry in general.

Watching out for you everyday.

Eli

Yapta.com fare watching service continues to be faulty; check airlines directly

I have written about Yapta the online airline fare tracking service before as my personal experience has not matched the brand's hype. I have bantered with a senior executive over my comments in the past and decided to give Yapta the benefit of the doubt.

Well more bad news friends. Yapta's fare tracking service, based on another personal experience, is totally inaccurate...off by as much as 100%.

I contacted the company and they admitted their information is faulty...but blame outsourcing of data hopefully to be fixed soon. My advice, as before, do not use this service to do your fare checking. Do your own legwork to ensure you get accurate information and do it with the airlines directly.

Watching out for you everyday.

Eli

Spirit Airlines continues to use sexual play on words to promote fares, now adds branding attire

Spirit Airlines is continuing to use what some feel are sexually charged ad campaigns twisted with humor to promote their lower fares. They have been using the expressions "DDs" and "MILF" for over a year. Spirit says the campaigns are just fun and generate good revenue and do not insult anyone despite the double meanings.

Now comes word that flight attendants will have to wear aprons promoting Budweiser Beer...the first time, at least in my memory, that a brand is being promoted on the attire of airplane personnel. (Remember "coffee tea or me?").

Some employees and the flight attendants' union are complaining about the beer promotion. Flight attendants see their primary role as safety experts on flights (just think about the recent US Air Hudson River crash) not hawkers of alcohol products. Second, the promotion of alcohol brands on board so openly can be a duel edged sword. Bud sales may go up noticeably but drunk passengers on board may become a bigger issue causing difficult in-flight situations and dangers.

Doesn't sound like a good idea to me but in these recessionary times every business is looking for ways to keep revenue coming in.

Watching out for you everyday.

Eli

AIG Insurance executives formally inducted into Club CLT

In a previous post I wrote about a "new" brand called CLT...and the elite "club" the brand was forming. CLT stands for Cheaters, Liars and Thieves and its club embraces the individuals in the country who have cheated, lied or stolen their way to prosperity and success on the backs of ordinary Americans.

The first major entry (from tens of emails I received) is an entire executive group from one company, insurance giant AIG.

If AIG is familiar to you it is because it is one of the US companies being bailed out to the tune of $85 million.

While Congress and the Federal Reserve were working on a bailout program, top executives of AIG "partied like it was 1999" as the song goes at the super expensive luxury California resort, St. Regis Hotel and Spa in Monarch Beach.

This "business" trip cost nearly $500,000 including $23,000 for Spa treatments. Chief Executive Martin Sullivan thinks there was nothing wrong with this trip and its costs and his team deserved it. (Read CNN Online story about this extravagant trip, also watch Anderson Cooper's 360 series that will feature the top 10 "most wanted" CLTs this week).

So here's to AIG executives behind their free-spending leader Sullivan....you are all now members of Club CLT. Hopefully this membership leads to some serious action against you and the company including the forced return of all that money from each individual who participated in the luxury trip on essentially tax-payer dollars.

Greed, greed and more greed. I wish we could put these folks in jail is the sentiment readers of my blog have expressed. So do I.

Watching out for you everyday.

Eli

Disney World rebrands its world class sports complex

Disney has announced it is rebranding one of its most important and sophisticated venues in its DisneyWorld Orlando entertainment center, The Disney Wide World of Sports Complex.

Disney also owns the powerful sports brand ESPN and has decided it is more effective to use that name on the sports complex given ESPN has become the world's largest most well-known sports brand. It is also expected that under the new name the sports center will attract more athletes and spectators than the current 250,000 and 1.2 million, respectively, it gets annually now. There are also plans to add more facilities to the world-class operation including bowling and enhanced sports training facilities.

Research showed that many people do not come to Disney's WW of Sports Complex given its affiliation and connection to Disney however they would be more inclined under the ESPN brand.

Central Florida has been hit hard by weak economic times with most of its middle-American, middle to upper middle income families and individuals personally feeling the money squeeze. Fewer flights now go into Orlando because it is a lower price point flight leisure market and fewer people are driving to Central Florida because of the high cost of fuel.

Watching out for you everyday.

Eli

US Airways is no longer a legacy airline

US Airways which along with virtually all airlines except Southwest and Jet Blue is facing on-going financial strains to stay in the skies.

Besides baggage charges and higher airfares US Airways has now eliminated on-board movies (just when low cost airlines are upping their entertainment amenities) and will charge for all beverages including coffee and tea service. As reported by the Brand Man Speaks in a previous post, US Airways is consistently at the top or near the top of the list of airlines proving terrible customer service.

I think it is time to re-segment the airline industry by adding a new category. Floating between Legacy Airlines (Delta, American, United) and low cost carriers (Southwest, Jet Blue, Virgin America) is "High Cost-no Frills". US Airways is now the only member of this new group and if they stay true to their new brand positioning they should be out of business within a year's time. Who wants to pay top dollar for no service? Not me. Probably not you either.

Watching out for you everyday.

Eli

Yapta disseminating confusing information about Jet Blue fees

THIS ENTRY HAS BEEN UPDATED SINCE ORIGINALLY POSTED. SEE BELOW

Yapta, the airline ticket price monitoring website has been sending out emails with confusing information about Jet Blue.

Yapta a recent entry into the airline ticket price monitoring game has been plagued from day one with issues about the quality and dependability of its service. The Brand Man Speaks experienced first hand a case where the Yapta system was not only inaccurate but also considered deceptive by the airline I was flying.

In this case Yapta has sent out thousands of emails to registered members of its website saying Jet Blue has eliminated its flight change fee completely. This information seemed illogical given that just a few days earlier Jet Blue (like virtually all of the other major carriers) had upped its fee from $40 to $100 for any flight changes. Yapta's message encouraged people to fly Jet Blue because of its consumer-friendly fee elimination announcement.

A call to Jet Blue a short time ago confirmed that Yapta's information is completely wrong and that Jet Blue has not eliminated its change fees which remain at the newly established $100 rate.

Beware of Yapta they do not seem to have their act together and might provide misleading information to you that is costly.

Watching out for you everyday.

Eli

UPDATE

I received an email from Jeff Pecor at Yapta shortly after this post was originally uploaded to the blog. Jeff points out that their email only states that the fee to change and rebook a Jet Blue flight IF the airfare changes before your scheduled departure has been eliminated, not the change to an existing flight schedule as I noted above.

However, the term Yapta uses is "re-booking" fee. When I called Jet Blue (which I did twice) I was told the "re-booking" fee is still $100. Mr. Pecor insists (in the comment posted) that this is the term (along with his explanation from the Yapta email) that aligns with a changed airfare credit.

I concede my read of the email "missed" the point this savings was only about reduced airfare credits once the ticket was purchased. On that point I stand corrected. I do, however, contend that the term "re-booking" fee is poorly chosen by Yapta as this term is most commonly associated with changing any element of your existing reservation. I have asked Yapta to re-issue their email with a better explanation.

EP

Appeals court overrules NY State airline passenger bill of rights

A New York State Appeals Court has overruled a New York State law that would have put into place the first state level airline passenger bill of rights legislation.

The law would have required all airlines to provide food, water, and clean bathrooms to passengers stuck on airplanes for extended periods as a result of the Jet Blue fiasco in February 07.

The Airline lobby group challenged the law in which the court said the State of New York had no right to enact such legislation that conflicted with Federal Law on airline activities. The airline industry has been very public in its fight against such consumer protection legislation saying it can voluntarily handle such issues on a case by case basis without state intervention. It's really an issue about money in an industry that is bleeding from huge fuel cost increases in the past six months...not consumer protection or assistance.

Jet Blue is the only airline to have established a very specific pro-passenger protection program for extended delays. An action they took to try to win back passengers after the incident in New York last year.

Watching out for you everyday.

Eli

Jet Blue segments economy like United

Discount airline Jet Blue has announced it will offer an "economy plus" type of seat choice, similar to United, starting this April.

The airline will offer six rows of economy seats with 4 inches of more legroom for between $10 and $20 dollars (depending on flight length) over regular fares as a way to extract more revenue in a more difficult marketplace.

Jet Blue does already offer more seat/legroom than most airlines in its regular economy seats and this extra space is deemed to make the carrier even more desirable.

Calling airline brands like Jet Blue and Southwest "discount" carriers may no longer be truthful. An informal study my firm conducted this past winter showed that many times the legacy carriers offered better deals than the discounters especially in very competitive markets like LA and New York. It appears to me that the term "legacy" carrier is more about how long the airline has been in business rather than the historical use meaning a more established full-service airline. There is more similarity between the airlines today than differences as the business of flying is becoming more commodity-like in the US.

In contrast, foreign Airlines and overseas flights have been getting more luxurious and more distinctive to attract and maintain loyal customers. Singapore Airlines for example has consistently charged a premium for its award winning business class service over other business class offerings from other airlines and has recently announced it will completely eliminate coach.

Watching out for you everyday.

Eli

Southwest Airlines grounds 44 planes after scandal

Southwest Airlines has announced today that it has grounded 44 planes between its Love Field Dallas and Chicago maintenance facilities. This action takes place after the FAA accused the once sweetheart airline to the flying public of avoiding proper maintenance on 117 of its planes and putting passengers in peril. (Previous Post on Southwest Airlines Safety Issue  ) There may still be a fine of $10 Million levied against the airline.

The company has also announced it has fired three administrative employees tied to the maintenance fiasco and has hired an independent counsel to investigate the problem and illegal activity.

What still remains to be resolved in my mind is the fact that several FAA employees knew the problem existed and allowed it to continue until several whistle blowers stepped up to the plate. Nothing has been said about these FAA folks and whether they should be fired and prosecuted. Was money a factor? Did Southwest pay off these FAA people to look the other way to keep their planes in the air (keep money flowing in) risking public safety? Not yet known. But must be investigated.

No more fun and games at Southwest.

Watching out for you everyday.

Eli