Seat 2B By Joe Brancatelli
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Six Business Travel Trends to Track in 2016
December 30, 2015 -- Unless you're still stuck at the airport as a result of this week's between-holidays spate of truly nasty weather, it's time to think about what will affect our travel lives in 2016. Here are six trends business travelers need to track in the months ahead. In the end, they all comes down to money, global politics — and Trump. Of course, we probably could say that about almost any year, couldn't we?
1. A festival of feesAirlines long ago realized that keeping fares low and loading up on "optional" fees is the path to financial nirvana. Watch for them to invent new surcharges and upsells in 2016. Contractual limitations will bar most from following Lufthansa and charging us if we choose to book our seats via a third-party travel agency, but Delta Air Lines may eliminate free domestic first-class upgrades for elite frequent fliers. Delta's bosses hope to charge even their best customers for that prized amenity. Meanwhile, the hotel industry lusts after the airlines' fees-first model. Hilton may be preparing to impose a charge for any room reservation you cancel, and it tested that model at some of its properties in 2015. Watch for some chains to import the hated "resort fee" to urban hotels. That might take the shape of a mandatory upcharge for things such as Internet access, premium TV channels, and use of the in-house fitness center. And DoubleTree, one of Hilton's brands, earlier this month announced Little Extras Upgrades, a series of ludicrous bundles that try to convince you to pay more to rent a "premium" in-room coffeemaker.
2. Transborder TransportAfter years of squabbles and negotiations, the United States and Mexico last year agreed to a new "bilateral aviation agreement." What's that mean? Effective Jan. 1, U.S. and Mexican airlines will have much more freedom to choose where and when they fly between the two countries and how much they may charge. It's not "open skies" — the industry term of art for totally deregulated competition — but the new deal is much more liberal than the existing agreement, which dates to 2005. The practical effect? In 2016, there will be new flights to and from Mexico, more competition on existing U.S.-Mexico routes.
3. The Ghost of Trump's Travel PastIf Donald Trump's unorthodox campaign survives once the primary and caucus season begins, watch for his opponents to challenge his reputation by highlighting his checkered record in the travel field. His purchase of the old Eastern Shuttle was a disaster and he ended up surrendering the Trump Shuttle to his lenders. His clumsy attempt to buy American Airlines in the late 1980s nearly ruined him. As he has so clumsily explained during the Republican debates, he used "the chapters" (federal bankruptcy laws to the rest of us) to extricate himself from his Atlantic City casino fiascos. His hotel chain continues to solicit business from Muslim travelers while he calls for a ban of Muslims entering the country. And wait 'til political types dissect how Trump's personal choice for economic czar, Carl Icahn, plundered TWA when he owned that once-proud carrier.
4. The China SyndromeU.S. airlines have been talking so much smack about the Gulf carriers that they've missed the meteoric rise of China's commercial-aviation industry. As recently as 2011, U.S. carriers offered twice as many flights to China as Chinese airlines operated to the United States. But in 2015, according to the CAPA Centre for Aviation, China's carriers flew 9.4 percent more flights and 14.5 percent more seats than our homegrown airlines. That trend will continue in 2016. Next month, in fact, Hainan Airlines, one of China's Big Four, launches the first nonstop flights from the United States to Changsha, the capital of Hunan province. Ironically, Chinese airlines are as least as heavily state-subsidized as the U.S. industry claims that Gulf carriers are. Yet that hasn't stopped Delta Air Lines, the most vociferously anti-Gulf voice, from taking a stake in China Eastern, another of China's Big Four. As a new round of aviation negotiations begin in 2016, China's carriers are the ones mostly likely to be seeking a more liberal flying regimen. U.S. carriers, once aggressive proponents of open skies, will likely demand a more protectionist stance.
5. Happy Hotel DaysThe rapid rise of Uber and other ride-sharing services is devastating the U.S. taxi industry. But the equally heady rise of Airbnb doesn't seem to be crimping the U.S. lodging industry. Nightly room rates and nightly occupancy rates in 2015 were at record highs, and the big lodging chains added a breathtaking amount of new supply. They are also rushing to consolidate into fewer, larger global entities. The next few years look little different. According to one industry analysis, about 750 new hotels opened in the United State in 2015. The hotel industry is on pace to open nearly 850 new properties in 2016 and around 1,000 more in 2017. About two-thirds of the new inventory will carry the flag of three big chain operators: Marriott, Hilton and InterContinental.
6. Labor DazeThanks to rapidly-falling oil prices and industry consolidation, U.S. airlines are reaping record profits in 2015. In fact, U.S. airlines account for more than 50 percent of all the profit generated by all the world's carriers. But U.S. airlines have been loath to share the windfall with its line employees. Pilots, mechanics, flight attendants, and ground-service personnel made major concessions in the lean years after the 2001 terrorist attacks. Few have regained those givebacks, and airline bosses continue to look for ways to cut costs by outsourcing jobs to third-party contractors. But all the major airlines face tough contract negotiations in 2016. Pilots at both Southwest and Delta rejected contracts this year, and United and American have yet to combine all of the contracts and labor rosters of their pre-merger carriers. Since labor negotiations are regulated by arcane laws literally written in the railroad era, strikes are unlikely in 2016. But labor unrest isn't. Unless management agrees to share some of the airline industry's new wealth, 2016 could be a very rocky year for customers who have to deal with disgruntled customer-facing employees.
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