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August 14, 2006

TRAVEL MARKETERS ADJUSTING TO THE “NEW NORMAL”….AGAIN

By Joel M Chusid, ATME Chairman and Principal, Joel Chusid & Associates

Once again, world events affect the travel industry. The August 10 foiling of the potential terrorist attack on international airliners has resulted in more severe restrictions for air travelers. While some of these new rules have already been or may later be loosened or modified, others, like the ban on carrying liquids aboard aircraft, may or may not represent what has been called “the new normal.” The vast majority of travelers at Heathrow and other affected airports faced with the sudden implementation of new prohibitions, queues, and inconveniences have complied without complaint, acknowledging that safety is paramount. By the second day, most travelers arrived at airports prepared, having heard about the new rules in the press, on airline and travel websites, and the “controlled chaos” as it was described, was, well, more “controlled.” By the third day, US news media had some trouble finding queuing travelers to interview since lines were so short in some airports. In a few weeks, we’ll experience another level of “new normal” and travelers will fall into the routine, just as they dutifully removed shoes, metal objects, and belts at checkpoints prior to August 10. While these may be temporary annoyances, they could be lifted and imposed again later.

The virtual total carry-on ban on flights to and from the UK has been far more burdensome, with businessmen without their Blackberries, laptops and even business papers, students without their books, and tourists without cameras and iPODs. Passengers weren’t even allowed to carry a jump drive or an electronic car key. These restrictions were loosened on August 15, but still represented not only a huge inconvenience but a blow to productivity to those who use long flights to get work accomplished. It’s also resulted in a lot more bored passengers forced to endure the varying levels of inflight entertainment provided by the airline or sharing magazines with their seatmates. Putting electronics in checked baggage has always been risky; airlines don’t pay for damage, loss, or pilferage of these items from your bags, although additional insurance can be purchased from airlines in the event your bag disappears entirely. (Note: your homeowners’ policy might kick in here.)

The new regulations are also tougher on women and children. A man can shave with a razor and a bar of soap, and children don’t understand why they can’t bring their favorite beverage onboard. Airport shops and food outlets are far more impacted, and within a day, several had closed. Duty free and cosmetic stores like Body Shop are hugely affected. With the inability to carry on anything that “poured or oozed”, even a simple item like a mustard packet in a packaged sandwich would be verboten.

How does the travel industry react?

What does this mean to the travel marketer? The situation was fluid the first day, but some companies did react quickly to help the traveling public. American, Continental, and United Airlines and British Airways and other carriers had information up quickly on their websites or sent text and e-mail messages to affected customers. Travel agents and online travel sites contacted their customers. Omni Hotels almost immediately issued a press release, quickly jumped on by the media, that it was providing additional cosmetic and amenity items from contact lens solution to nail polish for guests who could no longer pack these in their carry-ons. They supplemented this with an e-mail to regular guests.  Wyndham Hotels followed with a similar program called “We Remember What You Forgot.” Intercontinental Hotels put a special link on their website for travelers whose reservations were impacted directly from their flight disruptions. Within the next few days and weeks, no doubt other companies will follow suit and come up with different programs.

Airlines

Airlines may have to adapt their product offering in the coming weeks, depending on how long the regulations last or what they turn out to be in a more permanent form. While amenity kits are still provided to premium international passengers, coach customers do need to brush their teeth, too. Coincidentally, Delta recently announced it was upgrading its international coach offering, including earplugs and eyeshades. Many passengers had resorted to brown bagging, but carried on food has to be dry now, so expect airlines to increase beverage stocks. American passengers are getting accustomed to paying extra for services, so this may be an opportunity to increase the quality, selection, and availability of both food and comfort items (i.e. toothbrushes with toothpaste) at a reasonable cost aloft.

One side benefit of the restrictions is more passengers will be checking bags, so there won’t be any more fighting for overhead bin space. Additionally, well heeled travelers and businessmen might be tempted  to try some of the more than half a dozen new companies that offer luggage shipping door to door, or even turn to private charters. There have also been reports of some passengers avoiding London airports altogether, using continental airports and then completing the Channel crossing via train.

Hotels

Omni has started what will certainly be a trend. Chinese hotels have traditionally provided toothbrushes, razors, shaving cream, and other amenities. It appears this will become the norm, although I’d expect more popular priced chains to have them available on request, as is the case with Holiday Inns and some others today. Since women need far more than a bar of soap for their toilette and are more brand-conscious for their cosmetics, upscale hotels may look at setting up cosmetic bars with sample size items available for female travelers.

Airport Parking Lots

Depending on the severity of the electronic ban for UK flights or if it’s strengthened at some point in the future, airport parking lots may look to increase their valet offerings, since electronic key fobs had not permitted in carry-on luggage. The Parking Spot has long set a good example of offering complimentary bottled water to their customers, welcome refreshment after a long flight.

Airport Shops

If the beverage restrictions hold, there’s a lot of impact. Duty free shops, if they are able to stay in business, will have to find other products to sell or find an alternate way to deliver their product. In the US, duty free is delivered directly to the aircraft, and it seems that this was quickly reinstated after the initial shock. At some airports, Buenos Aires and Sao Paulo, for example, international passengers can buy on arrival prior to customs, but in the US airports are not set up for this. Snack bars selling beverages from bottled water to coffee may want to look at smaller sizes so passengers can consume them before boarding.

Some airports have few or no shops prior to security. Post 9/11, with long security lines, passengers wanted to get through the formalities and then had time to shop or have a meal. Shops were shifted to sterile (secure) areas so greeters and others not traveling had nowhere to buy a newspaper or a drink. Security lines and customer acceptance has generally made the length of the process more predictable, so people do have more time before they are processed. Such items like TSA-approved locks, checkable carry-on bags, safe pouches for securing fragile items in checked bags, and limited food and newsstand offerings would be welcomed by passengers and non-travelers alike. Non-electronic inflight entertainment options like crossword and sudoku puzzles, and coloring books for children might also be worth stocking for those UK flights!

Car Rental Companies

Like The Parking Spot, how about a bottle of water to arriving customers, at least on request, who have had to make do with much less on their flight?
No doubt some passengers will choose to drive on shorter trips rather than be inconvenienced. Car rental firms can capitalize on this opportunity. 

Travel Insurance and Third-Party Travel Sites

Most travel insurance covers trip cancellation, although terrorist activities are usually excluded. In the most recent situation, in fact, delays and cancellations were not directly caused by a terrorist action, so policies would apply. Those who booked through third party sites like Orbitz, Priceline, or Hotwire would seem at risk, but media reports indicate that they have been following airline relaxation of rules as well. Both the insurance and third party site companies should be looking at their future strategies to capitalize on the latest situation, assuming their customers are satisfied with their responses.

Destinations

I’m a firm believer that the aim of terrorists is to disrupt our daily lives, and we should not let them win. It is our duty as travel marketers to continue to promote our destinations, but be realistic in our promotion relative to practical and safety issues. I also believe that air travel is safer than driving one’s own car, but the media makes us think otherwise.  The “hassle factor” has reared its ugly head again, but those of us who travel have a lot more exciting and educational life than those who are armchair travelers. We should pass along that passion and encourage people to explore the world, relax at resort destinations, sightsee, or whatever makes them happy, with the assurance that safety remains the industry’s priority.

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