| Did Airlines That Outsourced Operations Handle The Volcanic Ash Crisis Better? |
| By Peter Grover on 7/20/2010 2:22:19 AM |
As Iceland’s volcanic eruption had everyone glued to their television sets and other communication devices, scores of flights were cancelled leaving thousands of passengers stranded. It raised a larger question to the travel industry in terms of their readiness to handle a crisis of this size and manner. Online forums echoed days later that companies, which had outsourced their travel operations had handled the crisis better. |
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| Grounding the New 3-hour Rule |
| By Todd Dirks on 5/31/2010 5:45:21 AM |
As travelers, we have all been exposed to the pains of tarmac delays more than once. However, with the advent of the new ‘3-hour rule’ the DOT assures us that they will manage the evil airlines that do not care about their passengers. The new rule comes about despite many of the carriers already having implemented measures to guard against prolonged delays on their own. The DOT, in a move that basically states they have no confidence in the industry to govern itself, has imposed the new 3-hour rule stating that every airline must allow passengers to deplane from domestic flights if the tarmac delay is beyond three hours. The fines for violating the rule are as high as USD 27,500 per passenger, which works out to USD 3 million or more for a stranded 737. |
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| Ayes for the United-Continental Merger |
| By Todd Dirks on 5/17/2010 8:42:05 AM |
"With the recovery of the economy, fuel prices moderating, capital markets opening and both companies having solid liquidity, it was the right time to get involved in merger discussions," said Jeff Smisek in a recent interview to Bloomberg about the United-Continental merger. And a couple of days later, the deal had been struck. History was created with two big airlines ─ United and Continental ─ merging to become the world’s largest global airline. This was an example of consolidation in the airline industry that no one could miss. "The United-Continental merger would give passengers of United and Continental access to many new destinations: United serves 100 cities that Continental doesn't, and Continental flies to 136 cities that United doesn't," reported The Wall Street Journal. And as a frequent flyer of United, I was definitely pleased to say the least! However, I found mixed reactions from the industry and passengers with apprehensions mostly leaning towards a hike in fares. |
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| How outsourcing can help today’s Revenue Manager |
| By Todd Dirks on 1/28/2010 1:33:05 AM |
The role of the traditional revenue manager (RM) in the hospitality industry is changing. Historically, his primary task was to ensure that rooms were booked and if not, ensure that they were filled up with “warm bodies” to generate room nights. In effect, the revenue manager was managing capacity and the associated record keeping |
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| Bring back incentive travel |
| By Todd Dirks on 12/17/2009 9:30:48 AM |
In some cases, it is prudent to dial down the visibility of incentive travel. However, the productivity and morale-boosting impact of incentive trips have been long established as motivational. Increased productivity, in nearly all cases, outweighs the cost of the trip. Most participants are not six-figure salary earners. Often, they are employees or dealers who go the extra mile to increase the company’s overall profitability. |
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| Outsourcing can help airlines track online brand image |
| By Todd Dirks on 11/23/2009 9:36:51 AM |
When someone decides to follow you on Twitter, i.e. read your posts and updates, you are flattered. Similarly, you might choose to follow a Hollywood diva, professional athlete, or The New York Times as an indication of your interest.
Twittering is innocuous fun. But what if someone posted their negative experiences at one of your favorite restaurants, or some “shady” holiday resort started following you? You would be wary and block their “hard sell ” tweets. Or you could vent your frustrations with a tersely-worded tweet or comment on Facebook knowing your followers would read it. They would take your opinion about the restaurant seriously or ignore any twits from the resort.
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| Making customer loyalty a top priority |
| By Todd Dirks on 10/26/2009 8:11:25 AM |
As a regular flyer, I definitely enjoy and take full advantage of all the privileges I receive as a member of multiple frequent flyer programs -- faster check-ins, priority security lanes, easier upgrades, advanced seat selection, increased premium seating availability and on some carriers, access to free TV/Internet – which are some of the important ones to me. As an old ad for Cathay Pacific put it: (I can then) arrive in better shape. |
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| Three things that airlines can do to improve the lost baggage experience of their passengers |
| By Todd Dirks on 10/12/2009 8:35:13 AM |
It was a bad evening. A severe thunderstorm had delayed flights out of Washington’s Dulles International Airport. My flight to Minneapolis arrived three hours late, well past midnight. Tired and weary, I trudged to the baggage carousel only to find that my bag had not flown with me. The airline baggage staff assured me that it would be delivered to my hotel by noon the next day. They also mentioned that they had a huge backlog because of the inclement weather on the east coast. |
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| Analytics can help Online Travel Agencies convert lookers to bookers |
| By Sanjit Bhoumick on 9/21/2009 6:03:53 AM |
According to the latest report from PhoCusWright, 40% of online travel shoppers in the United States do a price check on websites of Online Travel Agents (OTAs) before booking direct with the supplier. Given this trend, OTAs should think of better ways of converting website visitors into customers. Analytics could provide the answer. |
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| The need for revenue Integrity programs |
| By Michelle Scarsbrook on 9/14/2009 6:57:23 AM |
Revenue integrity, or more precisely revenue leakage, can be defined as the gap between the revenue that an airline expected to receive and the amount that it eventually receives. In the current economic climate, revenue leakage cannot be ignored. |
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| Take-off with airline revenue recovery |
| By Michelle Scarsbrook on 8/11/2009 6:36:58 AM |
For an industry already facing grave challenges, airline revenue leakage can sound the death knell. Consider IATA’s forecasted operating loss of US$ 1.7 billion in 2009. Not included within this number is an estimate US$ 5-16 billion revenue leakage (2-5% of total annual airline revenue) that goes unreported each year. Critical to ensuring a return to profitability, revenue recovery solutions are in the spotlight.avi63frcxg |
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| Expedia’s waiver of change fees reinforces the case for cost reductions in travel industry |
| By Todd Dirks on 7/6/2009 9:43:08 AM |
Travel companies have no choice but to dramatically reduce costs to survive. "There is little doubt that most markets in the current economic climate are challenging at best and growth will be hard to come by for most operators," said Michael Fishbin, National Director of Hospitality Services, Ernst & Young LLP. " |
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| Are airlines geared to fully leverage ancillary income? |
| By Raghunathan Thyagarajan on 6/10/2009 3:58:33 AM |
In early 2000, ancillary income started out as an innovation among European low cost carriers; today it has virtually become an airline industry standard. Ancillary income or revenue from sources other than the ticket price is categorized by the industry as a la carte features, commission based products and frequent flyer activities and today account for a substantial portion of revenue for airlines. Today, these features comprise as much as 10-15% of most airlines’ revenues. The question is this – are airlines geared to fully leverage ancillary revenues? Can airlines further increase their ancillary revenues? |
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| 3 pitfalls to manage while changing PRA systems |
| By Raghunathan Thyagarajan on 5/15/2009 8:55:24 AM |
Recently, several airlines floated RFPs to implement new Passenger Revenue Accounting Systems. Driving this uptick in demand for new systems is the need to deliver revenue information on a real-time basis to support better decisions and implement stringent financial controls which legacy systems just cannot support. Additionally, as low cost carriers move up to become full service providers, their systems must be geared to address the revenue accounting complexities of a full service provider. |
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| Hoteliers - Innovate or perish! |
| By Todd Dirks on 4/6/2009 9:44:15 AM |
I couldn’t help but smile when I read a recent article about leading hoteliers such as Hilton coming up with stylish yet affordable extended stay brands. The reason I find this interesting is because just a few days back, I was having a discussion with the chief marketing officer of a leading hotel chain and this is precisely the dialogue we were having.
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| Speed and accuracy in rate loading is critical for hoteliers |
| By Todd Dirks on 3/6/2009 8:14:29 AM |
I was recently reading the results of the last audit of GDSs conducted by CWT Solutions Group which revealed that about 62% of client rates were accurately loaded as opposed to 57% in 2007. While the results are trending positive, there still remains a lot of scope for improvement in rate loading by the hotel industry. Think about it – one out of every three rates loaded currently in the GDS is probably incorrect.
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| To survive in today’s environment, the hospitality industry must have an exquisite focus on revenue management |
| By Todd Dirks on 2/13/2009 9:35:13 AM |
Having touched upon the main challenges for the hospitality industry for the year ahead in my previous blog post, let’s dive deeper into revenue management (RM), as everyone is seeking to find answers to a fundamental question “how do we grow our business in these challenging times?”...
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| Airlines need innovative service delivery models: Time to adopt a fully managed and outsourced passenger revenue accounting service |
| By Sanjay Jain on 2/12/2009 8:31:26 AM |
A core process for the airline industry is Passenger Revenue Accounting (PRA), which involves accounting for and calculating the yield on each ticket sold. To speed the process, which can be very manual, and reduce costs, it is critical to incorporate the right technology into PRA operations so that airline managers can access, process and analyze information with speed to meet efficiency and revenue goals.
The results of the annual Airline IT Trends Survey by SITA provides significant insight as to the main reasons why airlines should consider new technology or alternative application access methods, and the obstacles that stand in the way of successfully implementing the right technology. |
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| Creating value in a downturn: The challenges for the hospitality industry and strategies for sustainable growth |
| By Todd Dirks on 1/29/2009 6:30:22 AM |
I heard an interesting anecdote about Winston Churchill, the legendary prime minister of the UK.
The story is set at the end of World War II when Churchill was thrown out of power, and consequently fell into a depression. Worried over his mental state, Churchill’s wife, Clementine, finally said, “Winston, for God’s sake, snap out of it. Look at this as a blessing in disguise.” Churchill’s response: “If so, Clemen, it’s very effectively disguised.”
These are undoubtedly challenging times for the global economy in general and specifically for the hospitality industry. No surprise that the analysts predict a tough year for hotels, including a 4.4 percent drop in occupancy rates in 2009 over 2008, to an average of just 58.3 percent. Should this prediction bear out, it will be the lowest occupancy rate since 1988...
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| Optimizing revenue integrity: Critical for airline success |
| By Raghunathan Thyagarajan on 8/29/2008 |
Optimizing and enhancing revenue integrity is critical to an airline, not only from an audit compliance perspective, but also to protect the interests of all stakeholders. Unfortunately, today for a large number of airlines, revenue integrity is focused only on a few dimensions such as external audit, compliance audit and basic sales audit. This approach is largely based on the traditional model...
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