Taiwan Tensions Could Drive Up Travel Costs Significantly, CWT Warns

Taiwan Tensions

Geopolitical uncertainties are singled out in the latest Global Business Travel Forecast, which underscores the volatility the corporate travel industry is experiencing, and perhaps the pointlessness of trying to predict prices in the first place.

While travel prices may not spiral out of control as much as they did in 2022, many factors that impact costs will simply remain out of the hands of travel managers.

Next year could see even more price fluctuations due to geopolitical events, a new report from corporate travel agency CWT and the Global Business Travel Association has warned.

The pair projected back in November 2021 that air fares would rise 3.4 percent in 2022, with that estimate published just months before Russia invaded Ukraine — an event that contributed to jet fuel price increases that were handed down to passengers.

However, the actual rise of the average air fare is expected to be 48.5 percent for 2022, CWT and the association have stated in this year’s joint Global Business Travel Forecast, published Wednesday.

“There are three main forces exerting pressure on the economy, and conversely, the business travel industry,” the report said. “Russia’s invasion of Ukraine, coupled with other geopolitical uncertainties; inflationary pressures that are pushing costs higher; and the risk of further Covid outbreaks that could restrict business travel.”

Speaking to Skift ahead of the report’s publication, one senior exec warned more implicitly that travel managers should keep track of the rising tension between China and Taiwan. Taiwan’s foreign minister on Tuesday said China’s recent military maneuvers were a game-plan to prepare for an invasion.

“As well as the war in Ukraine, you need to keep an eye on what’s happening in Taiwan with China,” said Richard Johnson, senior director, CWT Solutions Group. “Drawing parallels with what’s happening in Ukraine and Russia at the moment, if there were to be an invasion of Taiwan, that could potentially impact demand for inbound and outbound business travel to and from China.”

One knock-on effect is that airlines would see demand reduced, particularly if there was an embargo, as well as safety risks.

With prices reduced in certain markets, Johnson said vendors would need to recoup their losses.

“You might start to see an offsetting of the reduced demand in such a massive economy as China, by prices increasing elsewhere,” he added. “It’s a difficult one to predict.”

Air fares are predicted to rise 8.4 percent in 2023, according to the Global Business Travel Association.

Meanwhile, hotel prices are expected to rise 18.5 percent in 2022, up to $147 per night — a notable difference on the original 13 percent prediction the annual report made in November last year.

They’re forecast to go up by a further 8.2 percent in 2023. “Hotel prices have already eclipsed 2019 levels in some areas and will do so globally by 2023,” the report said.

Source: Skift

How International Carriers Circumvent Nigerian Airlines with Visa Restriction

Nigerian airlines

Over the years, Nigerian airlines have failed to successfully operate international routes. Many international carriers, who describe the Nigerian routes as very lucrative, deploy many strategies, including visa denial, to short-change Nigerian carriers, but Nigerians are the enablers of this perfidy.

On Monday Nigeria’s major carrier, Air Peace reported that it would suspend its flight service to Johannesburg due to high cost of aviation fuel and the inability of Nigerians to secure visa to South Africa.

The airline explained in a statement that due to the turbulent times the aviation industry was experiencing with Jet A1 fuel increases, scarcity of forex and a delay in visa issuance for South African travel passengers, it had to stop the service.

Over the years Nigeria always have stormy relationship with South Africa in terms of visa. Even when the country’s tourism board spends huge money marketing tourism destinations in Nigeria, Nigerians always face hiccups obtaining visa to that country.

The latest issue concerning visa, THISDAY learnt, has to do with South Africa Airways. The national carrier started operation to Lagos, one of its lucrative international routes, last year and has been operating direct flight between the two countries with Air Peace. Air Peace started flights to Johannesburg in December 2020.

With difficulty in obtaining visa to South Africa, many Nigerians who booked flights with Air Peace would not be able to travel and that is the dilemma they face currently.

THISDAY learnt that Air Peace approached South Africa embassy in Nigeria and pleaded that they should relax their restrictions, but the embassy had not responded. An insider and tourism expert told THISDAY that while South African companies in Nigeria might have risen to 300, most of them monopolies, more Nigerians travel to South Africa because what Nigeria exports are human resources (it is reported that two Nigerian medical doctors leave for the UK everyday). So there are more Nigerians that travel to South Africa than South Africans that travel to Nigeria. Since South Africa Airways started operating to Nigeria, most South Africans travel with the airline and many of them, being top officials of these blue-chip companies in Nigeria travel business class. So even without high load factor at the back of the cabin, the airline earns good revenue from the operations.

But the many Nigerians who travel to South Africa are go-getters who fly largely economy class and with loyalty to their own carrier would like to patronise Air Peace. These are the people that are stopped by visa restrictions.

“They use visa restriction, airport protocol (immigration and flight scheduling) to make you uncompetitive. Now, a lot of people who booked Air Peace flights are moving their passengers to South Africa Airways. Nigeria loses again. Nigeria has no cooperate products to export; just our Dangote and human resources. Any other thing we export they dictate against our own benefit. So what Nigeria should do is to protect her citizens. Like what happened in Namibia. When Namibian authorities beat up Nigerian woman, Nigeria stopped issuing visa to Namibians and that was what killed Air Namibia flight to Nigeria,” the expert said.

Punitive Measures

The expert was also of the view that since what Nigeria largely exports is its human resources; the federal government should take decisive action to protect that “product.”

Recently the Chairman/CEO of Nigerian in Diaspora Commission, Abike Dabiri confirmed in a television interview that the United Arab Emirates (UAE) has put restrictions on visa issuance; that any male Nigerian from 30 years or below would find it very difficult to obtain visa because of the illicit activities young Nigerians engaged in the Emirates in the past. She cited the issue of ATM Machine and engagement in cult activities by some Nigerians. This obnoxious act, she noted, damage the image of Nigeria abroad and this makes it difficult for Nigerians to obtain visa, including highly skilled and highly disciplined Nigerians who are the majority that travel abroad to earn a living.

So what Nigeria should do is to punish anyone who damages the image of Nigeria abroad by disciplining the person whenever he returns to Nigeria. This would show that Nigeria as a government does not support the nefarious activities of its citizens.

“We should also check the excesses of Nigerians who travel abroad to damage our image by committing crimes by punishing them even when they are caught, tried and imprisoned over there. We should have it as national policy that when they come back to Nigeria, we throw them back into jail. This way we make them know that we cannot tolerate their criminal activities when they travel abroad and that will also make these countries know we don’t indulge our citizens who break the law outside our country,” the expert told THISDAY.

THISDAY also learnt from an official of Arik Air, which operated to South Africa for years; that one of the key issues South African embassy use to deny Nigerians visa is the compulsory vaccinations against yellow fever (international certificate of vaccination or prophylaxis). The official alleged that Port Health issues expired batch of the vaccination, and this is rejected at the South Africa embassy. Although the embassy would not complain about this but when such issue arises it would deny the applicant visa. A journalist who had had similar experience told THISDAY that his passport was taken from VSF Global (the agency that provides visa service in Nigeria for many countries) and taken to South Africa embassy.

When he got there after his passport had been kept there for two months, he was informed that his vaccination card was not okay; that he had to update the vaccination.

“I just made enquiries and gathered that the batch of vaccination, which Port Health offers may have expired or does not meet the latest requirements, so they always query it at the South Africa embassy. They say even when the batch expires, they still issue it. When we were operating to South Africa, we had to buy new vaccine for the Port Health. We were directed to destroy existing ones and we bought a new batch. Of course, it was believed that it was government that bought is, but we did,” the official said.

However, Port Health had denied that they administer expired vaccine to Nigerians. An official of Port Health in Lagos said that all vaccines meet standard regulations, and none has been compromised in any way.

“Let them not use that as an excuse. They don’t like giving Nigerians visa; yet they like making money from Nigeria,” the official told THISDAY.

Reciprocity

Senior official of the Nigerian Immigration Service (NIS) told THISDAY that the federal government should be notified of the antics of South African embassy because “visa policy is based on reciprocity.”

“It is unfortunate because we even give them visa on arrival here and they don’t give to us. It is very difficult to get South Africa visa. They have not been given us visa for a long time. Like Canada, they can hold back your passport as long as possible without answering you. I learnt that some Nigerians go to Ghana to obtain their visa but they went to Ghana to stop it. So it is the duty of Nigeria to also block them. The unfairness is terrible,” he said.

This could be described as familiar terrain because in 2012 there was diplomatic face-off between the federal government of Nigeria and South Africa following the deportation from South Africa of 125 Nigerians, including a Senator.

Arik Air and South African Airways flights were deported on arrival in Johannesburg, allegedly because they were carrying fake yellow fever vaccine cards. This action, which was described as a “harsh and unfriendly treatment” by most Nigerians, sparked off some retaliatory actions by Nigerian government. In apparent retaliation to the treatment, 28 South Africans who arrived Nigeria the following Monday were deported back to South Africa and the federal government threatened to go tough on South African companies operating in Nigeria.

This was done by the fearless Foreign Affairs Minister, the late Olugbenga Ashiru, who was also the former High Commissioner to South Africa who explained that the South Africans were deported from Lagos because of irregular travel documents, adding that this was only the beginning of retaliatory moves.

Ashiru said then that the federal government would soon sanction South African firms for bringing half-baked graduates to occupy positions that could be occupied by Nigerians. He added that Nigeria had asked the South African government to apologise and pay compensation to the affected travellers and Arik Air.

Also, the then Minister of Health, Prof. Onyebuchi Chukwu, said that none of the deported Nigerians was in possession of fake yellow fever cards as alleged by the South African authorities. He also disclosed that classification by the World Health Organisation indicates that Nigeria was one of the 44 countries with no risk of exposure to the yellow fever virus. However, the Health Minister added that the last confirmed case of yellow fever in Nigeria was in 1995 and that Nigeria was not at risk of a yellow fever outbreak.

According to him, the Port Health Services of the Ministry issued Yellow Fever cards and vaccines at all local and international airports, land borders and seaports in the country.

Insider Jobs

Industry analysts agree that there are always efforts to frustrate Nigerian airlines from operating international routes, but the foreign airlines and their host countries can only share the blame. Nigerian system and its citizens, especially government officials, contribute significantly to the inability of Nigerian carriers to successfully operate international destinations.

THISDAY authoritatively learnt that some foreign carriers pay some top officials in government up to $5 per passenger taken out of Nigeria. Informed industry source told THISDAY that in 2010-12 it used to be $3 per passenger but it has now risen to $5. Besides, some top officials in the Ministry of Aviation are allegedly on the payroll of the airlines.

“So, this is a case of what comes straight to you in form of cash and trying to protect your own airline, which will give you nothing in return. When you retire you are forgotten. The Nigerian system has nothing for you beyond the period you are in power or in authority so you use every opportunity your position offers you to feather your nests,” one industry insider told THISDAY.

Informed source also told THISDAY that UAE authority was aghast when the federal government fought for Air Peace when the Nigerian carrier was denied access to operate to the Emirates. To them, that was unusual because in the past, the Nigerian carrier was left in the lurch.

“I heard that they are waiting for this government to go before the will launch attack on the Nigerian airline. They also said that they know where the fight came from,” a highly placed Nigerian told THISDAY.

In 2013 Arik Air wanted to fly to Brazil and Rio de Janeiro-based Gol (Gol Linhas Aéreas Inteligentes S.A) was to reciprocate the flight in the Bilateral Air Service Agreement (BASA) with Nigeria. THISDAY learnt that it didn’t take the reluctant Gol (which was not even enthusiastic about international operations then) time to get all the approvals from Nigeria, while Brazil was extremely reluctant to approve Arik Air flight operations to the South American country.

“It is always easy getting these things from Nigeria because Nigerian officials are guided by what they can get; not how to protect their country. The corruption is enormous. Some of these foreign companies put Nigerians as their directors, so when you invite them for negotiations, they will send their Nigerian representatives and you talk as brothers, you know what I mean,” a source also told THISDAY.

Meanwhile, after the announcement of suspension of Air Peace flight operations to Johannesburg, South Africa Airways has issued a notice that buying its tickets from outside Nigeria must be in dollars. This is to restrict its exposure to the foreign airlines blocked funds in Nigeria and now that it enjoys a monopoly on the route, the new rule must be strictly adhered to.

Source: This Day

Business travel prices set to surge to pre-Covid levels in 2023

Business travel prices set to continue rising

Global travel prices are forecast to continue rising in the remaining months of 2022 and throughout 2023, a report released on Wednesday said.

Rising fuel prices, labour shortages and inflationary pressures on raw material costs are the main drivers of expected price increases, according to the Global Business Travel Forecast 2023.

Prices have risen across all regions in most spending categories, driven by pent-up demand, the desire to build company culture and an uncertain economic outlook.

Air fares have seen a particularly marked post-pandemic upwards shift.

Business travel flight prices fell more than 12 per cent in 2020 from 2019, followed by an additional 26 per cent decline in 2021.

Economy ticket prices fell more than 24 per cent from 2019 to 2021, while premium tickets fell 33 per cent. Prices are expected to increase by 48.5 per cent in 2022, but even with this large increase, prices are expected to remain below pre-pandemic levels until 2023.

After a 48.5 per cent increase in 2022, prices are expected to increase by 8.4 per cent in 2023.

Increased demand and continued price increases for jet fuel which have seen prices more than double in some markets to $160 dollars per barrel, according to S&P Global, are putting upwards pressure on ticket prices.

The overall cost per attendee for meetings and events in 2022 is expected to be about 25 per cent higher than in 2019 and is projected to increase by a further 7 per cent in 2023.

“Demand for business travel and meetings is back with a vengeance, there’s absolutely no doubt about that.” said Patrick Andersen, chief executive of travel management firm CWT which contributed to the report.

“Labour shortages in the travel and hospitality industry, rising commodity prices and greater awareness of responsible travel are all impacting services, but forecast prices are broadly [in line] with 2019.”

Hotel prices are also on the rise after falling 13.3 per cent in 2020 from 2019 and another 9.5 per cent in 2021. The report expects them to rise 18.5 per cent in 2022, followed by an 8.2 per cent increase in 2023.

Hotel prices have already eclipsed 2019 levels in areas such as Europe, Middle East and Africa, and North America — and are expected to do so globally by 2023.

Hotel rate increases were initially driven by strong leisure travel in 2021, but group travel for meetings and corporate events is improving and temporary business travel is picking up a healthy pace, putting further pressure on average daily hotel rates.

An integral part of many trips abroad are car rentals, and after falling 2.5 per cent in 2020 before rising 5.1 per cent in 2021, prices are expected to rise 7.3 per cent in 2022 and to climb a further 6.8 per cent in 2023.

With the automotive industry unable to produce cars at the volume it did before the pandemic — largely due to global supply chain issues — rental agencies are back to buying used vehicles to increase fleet size and are keeping their vehicles for longer periods.

Some agencies are also buying vehicles from carmakers outside of their historically supported brands.

Source: The National

The A380’s biggest supporter is asking Airbus to build a new super jumbo

Tim Clark

The A380 super jumbo has many supporters around the world, but none quite as vocal and powerful as Tim Clark, the president of Emirates, by far the largest operator of the aircraft.

The Dubai-based airline purchased nearly half of all A380s ever produced and now has 118 in its fleet, about 80 of which are currently flying.

The entire fleet will be back in the air by spring of next year, as part of a resurgence that has seen the super jumbo reintroduced into service with many of its operators, after the pandemic led many to believe it was ready for retirement.

“The notion that the A380 was a spent force was always a little bit of a difficult one for us to swallow,” Clark told CNN Travel in an exclusive interview.

“I was chuckling to myself, thinking ‘Wait and see.’ We started flying the A380 into Heathrow six times a day in October of last year, and we haven’t had a [free] seat on any of them since.”

The airline will start refreshing the interiors of almost 70 of its A380s later this year, adding a new premium economy class that will slightly reduce passenger capacity from 519 to 484.

The most distinctive feature of Emirates’ super jumbo, however, will remain the legendary shower spa, which offers first class passengers the luxury of a full-fledged shower at 35,000 feet.

There are two such suites, at the front of the upper deck, and Emirates is the only airline to offer them, after Clark explicitly requested them during the final design phase of the plane, in the early 2000s.

“Airbus had come up with a fairly sad possibility of putting benches and having little lounges there, but the notion that you would have bathrooms with showers and all the other bits and pieces was an interesting one,” he says.

“It was a bit of a risk for us, but these were dead spaces which we couldn’t generate income from. I realized that actually they would be hugely popular.”

Convincing Airbus to install them, however, wasn’t easy.

“We designed the showers and then went to Airbus, who were very much arms folded at that time,” Clark adds.

“But prior to the A380’s launch, the marketing program showed double page spreads with avenues of shops, lounges and cafes, so naturally I said, ‘that shouldn’t be a problem for you.’

“Clearly it was, but because we were such a big buyer, they complied. And it’s no mean feat trying to get water up two decks, keep the pressure up, the heating and all that.

“But we succeeded, they worked with us, and the rest is history. People talked about these showers for years and they still do.”

Clark has long lamented the fact that neither Airbus or Boeing plan to build a new plane the size of the A380.

Currently, the largest planes offered by the two leading manufacturers are the Airbus A350-1000 and the upcoming 777-9, which both seat just over 400 people in a standard configuration.

However, deliveries of these planes have been delayed and Clark believes they are too small to replace the A380 in Emirates’ fleet.

“The math tells you that you need a big unit, much bigger than we’re getting at the moment,” he says.

“The biggest one will be the 777-9, whenever that comes to market, which in our configuration [will seat] 364 people against 484 on the A380s with our new premium economy. And it was 519 before, so you get where I’m coming from.”

The “math” Clark refers to comes from demand for air travel, which he says was growing by about 4.5% per year before the pandemic.

Assuming that curve is recaptured, it would take just 10 to 15 years to see demand increase by half.

“Even with multiple 787s and A350s all busy flying around the world, I still don’t get how you will pick up that growth curve,” says Clark.

“Supply will be suppressed, demand will continue to grow, and when that happens prices rise, it’s inevitable.

“If you take the A380s out of the frame by the mid-2030s, how are you going to make it work? Do we see massive upgrades of airfields or new airfields?

“At Heathrow, they can’t even agree on the third runway. [Amsterdam’s] Schiphol has just reduced the number of landings and takeoffs that they will allow. So, one wonders, how would this demand be accommodated?”

‘Open fan’ engine

Clark’s answer is a new plane as big as the A380, if not bigger, with modern features such as lightweight composite materials and more efficient engines.

“Is it possible to redesign a new A380? Yes. Is it possible to lighten the aircraft? Yes. When they brought this aircraft to market, composites weren’t really [widespread],” says Clark.

“Imagine a composite wing and a predominantly composite fuselage. Imagine engines that are giving you a 20 to 25% improvement compared to what you get today.

“So you get a lighter aircraft, far more fuel-efficient, which ticks all the boxes as far as the environmentalists are concerned.”

One of the A380’s biggest drawbacks are its four engines, which are inefficient to today’s standards and fuel prices. A new version would require an entirely new engine technology.

Clark says there are “very interesting studies” going on in this field, but he adds that most of the research over the last 20 years has been focused on narrow-body aircraft.

An “open fan” engine, which appears to be a propeller but is actually a larger, unducted version of the fan found inside every modern jet engine, is one of the most promising new types of engines and could cut fuel consumption and emissions by as much as 20%.

It will be trialed on an A380 test plane.

However, it’s not meant for the aircraft: Brand new planes will need to be designed to fit these engines, and at least in the beginning, they will most likely be single aisle aircraft, similar to the 737 and A320.

“We’re trying to get everybody working on the big fans for the bigger aircraft as well,” he says.

“If you can get them to do what I think they could do in terms of fuel efficiency and power, then you have the makings of an airplane that would match or beat the economics of the [twin-engine aircraft] that we see today, by quite a long way.”

The problem with this plan is that just like the A380 wasn’t popular with airlines, a similarly sized successor likely wouldn’t be.

“Do I think that airlines will step up and sign up to this project? Doubtful at this stage,” says Clark.

“On the one hand I’m very keen to take a good hard look at this, on the other I’m not optimistic that the stakeholders in the ecosystem are up for it.

Looking to the future

“The airline industry is, rightly so, populated with people who are conservative in nature, because they’ve lost their shirts — this has been a seriously bad time for air travel.

“But now, things are starting to look a lot better, demand is back. So they have the ability to think hard about the future.

“Whether they’ve got the appetite for it, I don’t know. I know we have it.”

Geoff Van Klaveren, an aviation analyst and managing director of advisory at independent aviation consultancy IBA, agrees with Clark that there’s a need for a larger plane, but also that it won’t be easy to get one.

“There’s definitely room for a Boeing 747 replacement, but I don’t believe there’s enough demand to start a program for an aircraft larger than the A380.

“A very large plane is key to Emirates’ business model, because 70% of their passengers connect to other flights, but I don’t think Airbus or Boeing will build one just for them,” he says, adding that the most likely outcome is that even larger, higher capacity variants of the A350 and the 777 will be made instead.

However, Clark will not be moved.

“I’ve spoken to Airbus more than once,” he says. “I think they’re beginning to take it a little bit more seriously, but at the moment they are concentrating on their single aisle planes and the A350 line.

“I suspect people like [Airbus CEO] Guillaume Faury really would like to see something like this and recognizes what I could call the commercial imperative for it.

“But he is very much a technologist and will only do what his engineers and the technology will allow him to do.”

Looking at the post-pandemic travel chaos that is causing canceled flights, endless security lines and heaps of lost luggage, Clark isn’t very optimistic.

“I think you’ll see a continuation of this until the summer of next year,” he says.

“We are not out of the woods by any stretch of the imagination. And as more markets like China, Japan and Korea open up, they will exacerbate the problem, unless the likes of Heathrow, Frankfurt and Amsterdam get their act together and start getting people into place.”

The Emirates boss says he’s amazed at the resilience of the traveling public for putting up with all of this, but they’ll have to be patient for a while longer.

“I see strong demand for the next year,” he adds. “It’s a patchy one, but my instinct is telling me the airline industry will be okay in a year’s time and things will gradually become good when we get back into equilibrium — middle of next year, or end of next year.”

Source: CNN

Dubai firmly on course to achieve tourism goals

Dubai

Dubai attracted 7.12 million international overnight visitors between January and June 2022, recording more than 183% growth in visitors compared to the 2.52 million tourists who visited Dubai during the same period in 2021, according to latest data from Dubai’s Department of Economy and Tourism (DET).

This positive trend in H1 2022 places the city firmly on track to achieve its tourism goals for 2022 and beyond, and further reinforces its position as an international destination of choice.

His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, said: “The vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to make Dubai the city of the future and the world’s best place to live, work and invest in has resulted in a resurgence of Dubai’s tourism sector. The growth in tourists reflects the resilience and dynamism of the emirate’s economy. His Highness’s vision has helped Dubai create a strong and stable economic foundation and a dynamic business ecosystem, enabling it to become a leading global hub for diverse sectors. The rapid rise in international tourist arrivals puts Dubai on track to achieve its ambitious target of becoming the world’s most visited destination. In the years ahead, Dubai will continue to develop itself further as a destination that offers compelling value to international travellers.”

The number of tourists recorded in H1 2022 was close to the numbers achieved in the first six months of 2019, which saw 8.36 million tourists arriving in Dubai. The emirate’s ability to quickly return to near pre-pandemic tourism levels is even more remarkable given the impact of unprecedented challenges and other macroeconomic factors on the global economy and tourism sector.

Regional market share

From a regional perspective, Western Europe accounted for a significant share of tourist arrivals, comprising 22% of total international visitors in the first six months of 2022. MENA and GCC continued to make an impact, collectively contributing 34% of total international visitors and highlighting Dubai’s strong appeal to visitors from surrounding markets as a trusted and preferred destination. These regions were followed closely by South Asia with a share of 16% and Russia, CIS and Eastern Europe together accounting for 11% of total visitors in H1 2022.

The wide geographic spread reflects Dubai’s diversified strategy aimed at driving traffic from a broad spectrum of countries and visitor segments, mitigating the risks associated with over-reliance on any one region, and underscoring the success of destination marketing campaigns delivering customized messaging across specialized audience-specific platforms.

World’s highest hotel occupancy levels

The wide range of hotel establishments in Dubai presented yet another stellar performance across all hospitality metrics during the first half of 2022.

Average occupancy for the hotel sector between January and June 2022 stood at 74%, one of the world’s highest, compared to 62% in H1 2021, a difference of 12 percentage points and just short of the 76% occupancy level registered during the pre-pandemic period of H1 2019.

This is particularly noteworthy as it was achieved in spite of a +19% increase in room capacity over the same period in 2019. Dubai’s hotel inventory by the end of June 2022 comprised 140,778 rooms open at 773 hotel establishments, compared to 118,345 rooms available at the end of June 2019 across 714 establishments. Meanwhile, the total number of hotels in H1 2022 marked an 8% growth over H1 2021, highlighting continued strong investor confidence in Dubai’s tourism sector.

The hotel sector outperformed pre-pandemic levels across all other key measurements – Occupied Room Nights, Average Daily Rate (ADR) and Revenue per Available Room (RevPAR). Dubai hotel establishments delivered a combined 18.47million occupied room nights during the first six months of the year, a +30.4% YoY growth, and a +18% increase over the pre-pandemic period of H1 2019, which yielded 15.71 million occupied room nights.

In addition, the ADR of AED567 in the first half of the year surpassed the ADRs for both H1 2021 (AED382) and 2019 (AED444), with 48.5% and 28% YoY growth, respectively. The robust performance of the hotel sector is also evident in RevPAR growth – a surge of over 76% compared to the first six months of 2021 (AED417 v AED237) and an increase of 24% over the pre-pandemic period in 2019 (RevPAR of AED336).

According to hotel analytics firm STR, Dubai ranks No.3 globally on RevPAR (US$147), after Paris (US$195) and New York (US$172).

Dubai’s enduring global appeal

The latest data demonstrate Dubai’s enduring appeal as a must-visit destination, further validating Dubai’s ranking as the No.1 global destination in Tripadvisor Travellers’ Choice Awards 2022. It also remains one of the most sought-after cities for international travel, business and events at a time when the majority of global destinations have reopened for tourism.

The highly encouraging industry performance is primarily attributed to the hugely successful six-month long Expo 2020 Dubai, which attracted over 24 million visits by the time it concluded on 31 March this year, as well as the continued support extended by both domestic and global partners in showcasing Dubai as a multi-faceted destination that is safe, open and accessible.

A host of festivals, leisure and business events, including the Dubai Shopping Festival, Dubai Food Festival, Gulfood, and the Dubai World Cup. The World Government Summit, Binance Blockchain Week, Dubai Desert Classic, Dubai Duty Free Tennis Championship, Gulfood, Dubai International Boat Show and the Arabian Travel Market also contributed to the growth.

Global campaigns take Dubai to the world

Apart from the host of global gatherings and events showcasing the diversity of the destination’s offering, Dubai continues to engage global audiences through international campaigns and in-market trade activities that highlight it as a destination of choice. This includes the ‘Dubai Presents’ campaign, which promotes the city’s attractions through a series of movie-style trailers featuring stars from both Hollywood and Bollywood.

Marketing activities in key international markets have also been enhanced to showcase the city as the summer destination of choice, particularly through a rewarding ‘Stay More, Pay Less’ summer campaign to attract travelers and families to Dubai, in addition to driving traffic to the ongoing Dubai Summer Surprises festival.

Source: Government of Dubai Media Office 

KQ seeks to take over some major routes from South African Airways

South African Airways

Kenya Airways wants South African Airways (SAA) to leave for it some of the routes it operates in Europe and West Africa as the national carrier seeks to expand its reach ahead of the planned formation of a Pan-African airline.

The Kenyan carrier signed a Strategic Partnership Framework with SAA last November, which formed a key milestone towards launching a joint continental airline.

Transport Principal Secretary Joseph Njoroge says London and Abuja are some of the routes that KQ, as the airline is known by its international code, desires to get from the ailing SAA in order to expand its customer base.

The airline wants to use Johannesburg as a stopping point to pick up passengers to London or Abuja.

KQ wants to capitalise on the woes facing the South African carrier to improve its revenue and presence on both the European and West African routes.

“There are routes that KQ desire to take from South African Airways because of their strength on routes and available aircraft, we are still in negotiation on this matter,” said Njoroge.

SAA has been in financial turmoil for a couple of years, which saw the airline halt its activities for nearly a year before resuming service partially in 2020.

The airline has been downsized significantly as a result of bankruptcy and shrunk its workforce by about 80 percent. The carrier is currently flying to nine domestic and international destinations with a fleet of six Airbus SE jets.

The partnership framework followed a Memorandum of Cooperation that the two airlines signed in September 2021 to foster the exchange of knowledge, expertise, innovation, digital technologies, and best practice between the two.

The signing of the Strategic Partnership Framework by the pair will see both carriers work together to increase passenger traffic, cargo opportunities, and general trade by taking advantage of strengths in South Africa, Kenya, and Africa.

The PS said part of the initiative signed by the duo included the training of Kenya Airways pilots in South Africa. “South Africa is ahead of us when it comes to aviation training and we want to leverage on this and use SAA facility as our training hub,” the PS said.

Kenya does not have a simulator for Embraer 190 aircraft and local pilots are trained in either Johannesburg or Amsterdam.

Source: Business Daily

Heathrow says travel disruption is easing due to passenger cap

travel disruption

London Heathrow claims the cap on passenger numbers has helped the airport to weather the travel disruptions, according to the airport’s July 2022 traffic report. 

“The cap on departing passenger numbers has delivered improvements to passenger experience, with fewer last minute flight cancellations, better aircraft punctuality and baggage delivery,” the airport outlined in the report.  

After weeks of travel disruption, with passengers waiting in long queues at airports, Heathrow introduced the cap on passenger numbers on July 12, 2022, with a rule to handle no more than 100,000 departing passengers a day until September 11, 2022.   

Consequently, Heathrow received criticism from several airlines across the world because carriers were forced to reduce the number of flights to the UK’s largest airport during the busy summer period. 

However, Heathrow Airport has hit back at airlines for failing to attract ground staff to work at airports due to low wages, explaining that ground handling staff “do not work for the airport itself and are independent businesses contracted to airlines”.  

“For months ground handling companies have been trying to recruit and train skilled workers, but if their airline customers aren’t willing to pay market rates, then they aren’t able to fill the posts,” Heathrow’s Chief of Staff and Carbon, Nigel Milton said in a statement date July 21, 2022.  

In July 2022, the airport accommodated more than 6 million people. Looking ahead, Heathrow forecasts a total of 16 million passengers will travel through the airport between July and August 2022. 

Read Also: The UK Launches A 22 Point Plan To Tackle Air Travel Disruption

Source: Aerotime Hub

Uncovering the True Value of Omnichannel Retailing and Servicing for Airlines

Omnichannel retailing

Business travel is back — not to pre-pandemic levels, of course, but companies are encouraging their employees to hit the road and get real face time (not to be confused with Apple’s video calls) with vendors, partners, and potential new customers. As airlines take big steps toward a better future with investments for sustainable fuel and pay increases designed to solve the labor shortage, it’s time for the industry to focus on making a difference long before any of those business travelers arrive at the gate with better booking and service processes.

Plenty of corporate travelers opt to book direct, preferring the same experience they are used to on their favorite carrier’s website or mobile app. However, it’s no secret that the process is often more complicated than it needs to be. Since a corporate traveler will often appear as any other regular customer, policies for expenses aren’t available. Then, they might have to submit their expenses — only to discover that their tickets or ancillaries are not eligible for reimbursement. Plus, travel managers aren’t even aware about the booking in the first place. It’s a mess of disjointed information that creates headaches and frustrations for everyone involved in the process.

Navigating Around the ‘Iceberg’

That deep cavern of information is what Kyle Moser, director of multinational sales at American Express Global Business Travel, compares to an “iceberg.”

“Only about 10 percent of [a travel reservation] is visible,” Moser said in a recent episode of Airlines Reporting Corporation’s (ARC) Omnichannel Chatter podcast. “There is a mass of stuff that goes on underneath that most people don’t get.”

Omnichannel retailing and servicing helps sync all that information and turns a turbulent booking journey into a smooth ride. ARC acquired nuTravel in 2020 with a focus on making omnichannel a reality for the aviation industry, and now, nuTravel has unveiled Universal Connect — the first open and agnostic integration platform that enables direct booking capabilities with access to corporate rates and travel policies. United Airlines is already part of the beta, with American Airlines coming onboard soon.

“If a traveler’s company is registered with nuTravel’s Universal Connect,” Joe Ascanio, vice president of marketing and digital strategy at nuTravel, told Skift, “that traveler can go to a participating carrier’s app or website and book their travel with their corporate negotiated rates, payment methods, and travel policy information available, creating a consistent experience with corporate or TMC booking tools.”

For business travelers who are tired of dealing with a cumbersome booking process, the chance to book that flight to next week’s big meeting the same way they booked that flight for their summer vacation is a breath of fresh air. Finally, they can enjoy the ingredients that have seemed elusive for so long: flexibility and freedom.

Taking a Cue From Consumer-Facing Brands

An omnichannel approach might sound new for the corporate world, but Sarah Boyd, senior manager of airline retailing solutions at ARC, highlights that all those business travelers are quickly getting used to frictionless planning and purchasing in every other facet of their lives. Consider how Amazon — the ultimate name in ecommerce — has embraced a brick-and-mortar approach to give customers access to services away from their screens. The company operates physical counter locations where customers can easily pick up packages, drop off returns, and get in-person assistance. The experience that a customer might begin on their smartphone or laptop picks up right where they left off when they walk into the store. And if a customer doesn’t have access to an Amazon counter location, they can head to a dedicated Amazon counter at Kohl’s.

It’s not just Amazon, either. Consumers can browse for eyeglasses in store and then buy them in an app with Warby Parker, and they can try on makeup in an app and then buy it in store with Sephora. It’s a buy anywhere, service anywhere model that customers love.

“Today’s traveler expects an omnichannel experience since they receive that with other products,” Boyd said. “Customers don’t understand why they might not see their corporate rate if they book directly with the airline or why they don’t have access to certain ancillaries through travel agencies.”

Simplifying the Servicing Aspect — And Keeping Everyone Informed

The initial booking decision is just one critical piece of the omnichannel puzzle. When corporate travelers want to make changes — opting to extend a trip to have their family join them, for example — that adjustment shouldn’t require retracing any steps to get back to the original booking channel. “When customers need to manage their booking,” Boyd said, “they can do that through whichever channel is most convenient and have access to the same options and policies.”

While it’s important to make the traveler’s life easy, it’s equally essential to make sure that corporate policies are applied and the travel manager is in-the-know, too. “If a traveler books through an agency using a direct connection with an airline, like NDC, but needs to make changes at the airport with a customer service representative, the airline can then use NDC messaging to push those changes back to the agency,” Boyd said.

Speaking of change, it has never come easy in a corporate travel space that often seems unmovable — a characteristic that makes Moser’s iceberg comparison even more appropriate. While Boyd acknowledges that shifting to an omnichannel model is a “complicated challenge” for airlines and agencies, she believes it is essential for the future of travel. She explained, “The members of the travel industry who best keep pace — whether airlines, agencies, or travel managers — will be best positioned for success.”

Source: Skift

Soaring cost of flying cargo threatens region’s recovery

Everywhere around the world, reports indicate, the cost of flying cargo continues to rise and negatively impact on an industry that is yet to fully recover from Covid-19 pandemic.

The Africa Airlines Association (AFRAA), a trade association of airlines on the continent, indicates that expensive jet fuel, or aviation turbine fuel, and other expenses are weighing down on profits.

According to AFRAA, full-year revenue loss for African airlines for 2022 is estimated at $4.1 billion, equivalent to 23.4 percent of the 2019 revenues.

To stay in business, reports indicate, airlines adjusted their fares upward because of a sharp rise in the cost of jet fuel. The cost of jet fuel, it is reported, has increased 36 percent in the last six months, prompting airlines to add a special levy to protect their margins.

John Bosco Kalisa, the CEO of the East African Business Council (EABC), stressed that “this is terrible” as it will increase the cost of doing business in the region.

“Already the airlines are struggling to recover from devastating impact of Covid-19. Any additional charges will derail the recovery of both the cargo and passenger flights,” he told Doing Business.

The cost of jet fuel – which accounts for a significant portion of expenses involved in running an aircraft – hit a high of $1.25 a litre from $0.85 in January, piling pressure on airlines at a time when the demand for flying remained low as the industry still recovered from effects of Covid-19.

In Rwanda, high freight rates are already casting a shadow over, among others, Rwanda’s horticulture export prospects.

According to Robert Rukundo, chairperson of the Horticulture Exporters Association of Rwanda (HEAR), prices of airline charges increased from Rwf1.8 million to Rwf2.2 million, the latest being Rwf2.5 million because of the rise in fuel costs and taxes. As noted, the cost is $2.67 per kilo in terms of gross weight.

Horticulture exporters especially worried that national carrier RwandAir planned to increase the airfreight fee on a kilogramme of fresh produce from $1.8 to $2, effective August 1.

“Freight charges have gone up because jet fuel prices have doubled in the last few months. All airlines have increased the rates,” Yvonne Makolo, Chief Executive Officer of RwandAir, told Doing Business on Monday, August 1.

Asked what they are advocating for, Theoneste Ntagengerwa, the Private Sector Federation (PSF) Spokesperson, told Doing Business that: “The solution on our side should focus on finding a Rwandan owned cargo airplane, which can allow us to export big quantities but also lowering the cost for export.”

“The second aspect to consider should also be proper policies that support increase of our export to avoid the cargo [plane] being underutilized.”

But Makolo noted that even when RwandAir eventually secures a cargo plane, high freight charges could stay.

She said: “The freighter is in the process of being acquired but that’s not the answer. It will provide additional capacity but unless fuel prices come down, the rates will still be high.”

Besides the pandemic, the war in Ukraine also affected earnings by airlines that had to endure rising costs of jet fuel.

Source: The New Times

DOT Pushes Airlines to Dole Out More Refunds for Canceled Flights

Travelers in the U.S. have shockingly few rights when flights get delayed or canceled. There’s only one ironclad rule, really: If an airline cancels or significantly delays a flight, passengers can cancel their trip and get a full refund – not just a voucher or travel credit.

Two years after an avalanche of complaints from flyers fighting for those refunds as the pandemic first upended travel, federal regulators are finally pushing to tighten those rules – and clear up exactly when travelers are entitled to get their money back.

The U.S. Department of Transportation on Wednesday proposed a new rule that would set even more refund laws in stone. It would require airlines to inform passengers when a refund is available. And it would force airlines who rake in federal subsidies during a future public health emergency, like the $50 billion-plus U.S. airlines collected during the COVID-19 pandemic, to issue refunds for travelers who cancel flights – not just a voucher.

“When Americans buy an airline ticket, they should get to their destination safely, reliably, and affordably,” U.S. Transportation Secretary Pete Buttigieg said in a statement. “This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”

What Would Change with Airline Refund Laws?

These new rules have little to do with the recent spate of delays and cancellations that have frustrated millions of Americans returning to the skies this summer. It wouldn’t force airlines to dole out compensation for those disruptions, as we and several members of Congress have called for.

Instead, it’s geared more toward responding to 2020, when airlines pulled hundreds of planes out of the sky as travel collapsed, canceling flights and leaving passengers to fight to get their money back. And they did fight: Consumer complaints to the department regarding airline refunds jumped from under 1,600 in 2019 to almost 90,000, according to Air Travel Consumer Reports – a mammoth increase of 5,587%.

These new proposed rules would set even more down in stone for when travelers are entitled to get a refund.

Chiefly, they clarify exactly how long of a delay or schedule change triggers a refund. Currently, federal rules leave it up to airlines what constitutes a “significant delay.” Most major airlines set that threshold at two hours while some budget carriers consider it a whole calendar day change.

The new rules would set one clear standard, among others, including:

  • The proposed rules would require a refund if an airline changes your flight by three hours or more
  • For international flights, schedule changes of more than six hours would trigger a mandatory refund
  • Adding a connection to a nonstop flight (or additional connections) would be considered a significant delay – another aspect that’s not currently clear in federal regulations
  • Shifting your flight to arrive in or depart from a different airport would trigger a refund
  • Downgrading cabins or class of service would trigger the option of a refund too
  • A plane swap that results in “a significant downgrade of the available amenities and travel experiences”

Giving airlines a three-hour window to change schedules without triggering refunds – and a whopping six-hour threshold for international flights – seems far too generous, especially when many airlines have for years doled out refunds after two-hour schedule changes or delays. But here’s the most important part: These changes would also require airlines to explicitly inform passengers that a refund is available … before offering travel credits or a voucher.

That’s been airlines’ go-to move for the last two-plus years. They’ve sold tickets, canceled flights, and offered vouchers, hoping that passengers don’t know they could get their money back instead.

Without that required disclosure, these new rules are pointless. Airlines could keep doing what they’ve done all along: Stick travelers with a voucher that might expire in a year or less.

Airlines have repeatedly pointed to the fact that they’ve done away with change fees, giving flyers more flexibility to cancel an upcoming flight and pocket a voucher for the value of their ticket. That’s true, but these new proposed rules would also force airlines to be even more generous with doling out credits if anything like another COVID-19 pandemic strikes.

Namely, it would require airlines to issue travel credits or vouchers that never expire if a passenger cancels due to travel bans or restrictions, during a future public health emergency, or simply due to health advice from a medical professional.

Most airlines’ travel credits expire just one year from the date of purchase of the original ticket. After a change just last week, only Southwest – long the leader when it comes to changes fees and flexibility – offers travel credits without expiration dates. Delta has publicly considered doing the same.

Will it Actually Happen?

That’s anyone’s guess.

This is all part of the federal rulemaking process, which is a marathon – not a sprint. There’s no guarantee these changes will become law anytime soon, if ever.

For instance, the U.S. Customs and Border Protection has been pushing to raise the price of Global Entry through the federal rulemaking process since January 2021. Nineteen months laters, there’s still no sign of when that price increase may take effect.

With these proposed rules now put on paper, it begins a 90-day public comment period on the changes. The Department is also hosting a public meeting to discuss the proposed changes on Aug. 22.

Source: Thrifty Traveler