Agencies Likely To Lose GDS Incentives
Yet another indirect cost increase could be on its way for corporate travel buyers. British Airways is predicting that the global distribution systems shortly will curtail or even eliminate the incentives they pay to travel agents. "I am fairly optimistic that at least one GDS will move on this issue before the end of the year," said Pat Gaffey, BA head of global sales and distribution. A senior GDS figure said his company also wanted to get rid of agency incentives. "They are among our top five costs, but they are the only costs that are increasing," he said. However, each GDS fears that if it acts unilaterally, it will lose market share to rivals that maintain incentives. They are therefore hoping for regulatory intervention, such as through the European Union CRS code of conduct—currently under review—to force the issue. BA hopes the curbing of incentives would enable the GDSs to drop their fees to airlines, but top European agents said any loss of income for them inevitably would have to be passed on to corporate clients.
BA, Frontier To Improve Inflight Services
British Airways beginning next February will offer onboard e-mail and Internet access. The services will be provided during a three-month trial by Connexion by Boeing and offered in BA's first, Club World and World Traveller Plus cabins. BA officials suggested the technology could lead to inflight live television and radio broadcasts. Lufthansa German Airlines later this year will launch a similar trial of Connexion by Boeing's e-mail and Internet access. Last October, American, Delta and United airlines backed away from plans to install Connexion services by the end of last year. Cathay Pacific, Varig and others continue working with Connexion rival Tenzing Communications on inflight Internet connectivity. Meanwhile, Frontier Airlines is taking a page from fellow low-fare carrier JetBlue Airways' playbook. Earlier this month, it signed a letter of intent with LiveTV to provide seatback DirectTV programming. Initial installations on Frontier's fleet could begin by October.
Group Vs. Transient: Tracking Hotel Recovery
At least one prominent lodging industry analyst is examining group booking patterns as an indicator of when transient business travel is likely to rebound. The group booking cycle remains shorter than normal, noted UBS Warburg analyst Keith Mills, with small meetings booking within 15 to 60 days, compared with the historical average of 90 to 120 days. Meeting planners returning to the longer cycle will be a signal that companies are committing to spending more in the future, Mills said, and thus a positive sign for a transient rebound.
Delta Enables Online UATP Card Acceptance
Delta Air Lines last week announced the acceptance of Universal Air Travel Plan cards on its public Web site and delta.com for corporations, as well as with its Online Agency Service Center. Delta became the last major U.S. UATP-contracting carrier to enable the card on its Web site. A Delta spokesperson said the airline had to tweak its Deltamatic reservations system to enable the UATP four-character code.
CIGA Hotel Sale Progresses
When Starwood Hotels & Resorts Worldwide put its high-end European CIGA Group hotels on the block last year, the expectation was that a deal would be concluded by now. After various delays, Starwood management intends to announce the asset sale by midsummer, according to Salomon Smith Barney lodging industry analyst Michael Rietbrock. Speculation now centers on whether Starwood has found a single buyer for the collection and whether it will retain its much-valued management contracts.