THE ROAD AHEAD
By Joe Brancatelli
January 6, 2009 --When I whipped up a bunch of 2008 predictions in the first Seat 2B column of 2008, I knew it was a matter of talking about the trees and ignoring the forest. After all, pundits almost never see the big stuff coming, just the minutia.
As long as you overlook 2008's business-travel forest—the oil-price spike and subsequent fall, the 78 failed carriers worldwide and the late-year collapse of travel demand—I think you'll agree that I nailed the trees. I accurately predicted the rush to London's Heathrow Airport at the dawn of "open skies" over the Atlantic; the merger of Delta and Northwest; the introduction of Internet service on jets; the continued expansion of the hotel industry; and even the collapse and umpteenth government makeover of Alitalia and Olympic, Europe's perennially weak sisters of the skies.
So what business-travel trees do I see for 2009? Here are some of the things we're guaranteed to talk about. What the forest will look like in 2009 is anybody's guess.
Hotels: Too Many Beds, Not Enough Heads
Five years of over-development has already begun to haunt the worldwide lodging industry. Guest traffic and nightly room rates have plunged in recent months and the 2009 outlook is grim, not least because hundreds more properties are about to gush out of the pipeline. Although hard numbers are hard to come by, some experts believe that more hotels are upside-down on their mortgages than residential properties. Business travelers will be the winners on the top line: We're already seeing startling price discounts and value-added offers and corporate travel departments are wringing sizable rate reductions from major hotel chains. The bad news: Hotels will cut back on services, close restaurants, skimp on staff and eliminate perks. Some older properties, even a few well-known resorts, may simply close their doors in 2009. In other words, you'll pay less--and get less.
Airlines: Small is the New Big
Want a measure of how dramatically travel has slowed in recent months? U.S. carriers have cut so much domestic passenger capacity since Labor Day that an airline the size of Northwest, the nation's fifth-largest, has effectively disappeared. But still there are empty seats and fares are falling. That trend will continue in 2009. The big change this year will be internationally. After several years of switching capacity to overseas routes, U.S. and international carriers will be forced to retrench. It's already happening, in fact. Virtually all of the new service originally planned for China in 2009 has been delayed. And on December 23 Delta Air Lines—which has grown its international operation to 50 percent of its capacity from just 20 percent three years ago—canceled a bunch of new 2009 routes that it had announced just two months earlier. Look for sizable cuts in passenger capacity to Europe since most of the new flights in recent years were added over the Atlantic. There will be reductions in service to Latin America, too.
Car Rentals: Older Cars, Less Service
No one pays much attention to car rentals until things turn bad--and things are bad. One small player, Advantage Rent A Car, has tumbled into bankruptcy and closed many of its rental stations. Standard & Poor's says Dollar Thrifty may be the next into Chapter 11. The Avis Budget Group had to scramble to secure financing for a fleet update. Enterprise, until recently the industry's highest flyer, is laying off employees for the first time in its 50-year history. What's it mean for us in 2009? More rentals with high mileage, lots of road wear and obvious cosmetic damage. (Don't be shocked if you get a two-year-old clunker with 20,000 miles or more.) Fewer employees to check us in when we return cars. (Most rental firms are emulating Enterprise.) And more under-the-radar cash grabs. (Watch for rising daily rates for insurance and damage waivers and higher prices for vehicle-refueling service.)
Security: They'll Be Watching You
More than seven years after 9/11, the government still hasn't come up with a plan that sanely balances airline security and our privacy rights. Unfortunately, 2009 will bring even more infringement on our privacy rights. Sometime during the year, the Transportation Security Agency will take on the so-called "watch list" functions now performed by the airlines. And that means if you don't give your full name and birth date when you make an airline reservation, you'll be barred from boarding the aircraft. "You have to give this information," outgoing T.S.A. administrator Kip Hawley says bluntly. He claims the added data will "dramatically reduce" the number of travelers pulled aside for additional security screening because their name somehow resembles the name of a terrorist on the government's blacklist. One potential silver lining: Hawley claims the T.S.A. may drop its 3-ounce rule for liquids in carry-on bags during 2009. Of course, he's leaving office in a few weeks, so he's speculating on decisions he won't control.
The Fine Print…
One of the world's least competitive air-travel markets, the routes between the mainland United States and Australia, will get more competition in 2009. The cozy Qantas-United Airlines duopoly will end and both Delta Air Lines and V Australia, a carrier that's part of Richard Branson's air empire, will launch new flights between Sydney and Los Angeles. Meanwhile, British Airways will pioneer a new route between New York and London in 2009. Beginning in the fall, it will fly an all-business-class Airbus A318 between New York's John F. Kennedy International and London's City Airport, just a few miles from Canary Wharf. But operational conditions at City Airport are so challenging that the London-New York flight will make an intermediate fueling stop in Ireland.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT This column is Copyright © 2009 Condé Nast Inc. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright © 2009 by Joe Brancatelli. All rights reserved.