Business Travel News - February 9, 2009 - (Page 4)

NEWS Hotels Cut Capital Spending BY MICHAEL B. BAKER charges that U.S. hotels collect in The U.S. hotel industry is scaling 2009 would drop to $1.65 billion, back capital expenditures to their from $1.75 billion collected in 2008. lowest levels in years, although in- He attributed the drop to decreased dustry analysts said travelers are un- demand, particularly in higher tiers likely to see any drastic amenity cuts with the most fees and surcharges, as a result. and reticence by hotels to introduce Bjorn Hanson, an associate pro- or increase those fees. fessor at New York University’s Tisch There already have been reports Center, this month released a report of individual hotels cutting back on forecasting a nearly 30 percent drop a few amenities—a little less glitzy in capital improveFor the latest breaking news, soap in the bathrooms ments on U.S. hotels, or switching from flatsee btnonline.com/bn down to $4 billion priced breakfast buffrom a record $5.5 billion in 2008. fets to a la carte meals—and that This is the first year since 2003 that could continue, Hanson said. Not the industry will spend less on cap- only do hotels want to save money, ital expenditures than in the prior guests also might want to see some year, he said. amenities disappear, he said. “There Hotels could see profits drop as is a heightened consumer sensitivimuch as 25 percent to 30 percent, ty to items of waste,” Hanson said. and Hanson said they will look to “Travelers will want to know why trim expenses in terms of amenities. hotels are putting these expensive Hanson in a subsequent report things in the room and, in effect, Continued on page 8 said that the amount of fees and sur- AMEX SIGNS WORKTOPIA TO DEVELOP MEETINGS TOOL American Express Business Travel has signed an exclusive agreement with meetings technology company Worktopia for a small meetings booking product scheduled for release at the end of the second quarter, said Amex Business Travel senior vice president of global marketing and product management Lisa Durocher. The pact enables Amex to be the only agency to sell the customized tool and “there are elements of the technology that are proprietary only to us,” Durocher told BTN. The tool can book some meeting space and related amenities through a single interface in real time. The tool “standardizes the contracts any admin would be accessing and provides visibility into the cost structure for the company,” said Durocher. INSIDE TRACK CONTINENTAL TO LEAVE SKYTEAM FOR STAR IN OCTOBER Continental Airlines last month said it plans to officially exit the SkyTeam airline alliance on Oct. 24, after which the carrier “promptly” will transition to the Star Alliance. “We want to make our transition from SkyTeam to the Star Alliance as customer-friendly as possible for both our customers and those of the SkyTeam alliance,” Continental CEO Larry Kellner said. Continental in June 2008 announced intentions to leave SkyTeam and tightly align with United Airlines and its Star Alliance partners (BTNonline, June 30, 2008). Continental’s plans for Star Alliance include a four-way antitrust-immunized joint venture with United, Air Canada and Lufthansa, which awaits U.S. Department of Transportation approval. Short’s Buys Groople, Eyes Mtgs. Short’s Travel Management in April plans to launch a new product that enables corporations to book hotel meeting space and amenities, after integrating its proprietary technology with that of online group hotel booking technology provider Groople, which it acquired last month. The new product also will allow booking of food and beverage and audiovisual services. It will use a new application programming interface to directly connect with properties and chains that support the technology, said Short’s president and CEO David LeCompte. The tool will launch with one Short’s corporate account that spends more than $20 million on meetings per year. A broader product rollout for nonShort’s clients is scheduled for 60 days later. One major hotel chain already has signed on to share its inventory content using the new API, according to LeCompte. It enables administrators to book up to 50 hotel rooms and automatically process a reservation and pricing request instead of waiting for individual properties to respond to requests for proposals. Groople’s previous booking platform, which launched in 2004, was designed for booking multiple hotel rooms primarily for incentive travel, small groups and sports travel, LeCompte said. The acquisition price was undisclosed. According to LeCompte, the two companies began discussing possibilities for an acquisition in March 2008, but Groople’s venture capital owners, who invested $20 million into the company, were asking too high a price and the difficulties in combining technologies for a joint venture were too great. The acquisition was completed in December, but the technology teams had worked on the new product since the acquisition was agreed to “in late October, early November when their dynamic changed where someone was looking to acquire them and that fell through and we stepped in.” AMADEUS HALTS LUFTHANSA SURCHARGE REIMBURSEMENT Amadeus this month stopped absorbing Lufthansa’s surcharge on Preferred Fare bookings in Germany and Austria, pending the global distribution system’s ability to strike a new distribution pact with the airline. Lufthansa last year announced a €4.90 per-way surcharge plus value-added tax on fares booked through GDSs in Germany, Austria and Switzerland (BTNonline, Jan. 22, 2008). Amadeus competitors Travelport and Sabre since have come to new terms with Lufthansa to shield its subscribers from the surcharge, while Amadeus has yet to reach an agreement, opting instead to absorb their customers’ fees. Amadeus in November extended by one month its fee shield in Germany and Austria to Jan. 31, 2009, and in Switzerland until March 31. “Reimbursement was always intended to be a temporary, interim measure to protect our customers as discussions continued with Lufthansa,” Amadeus said, noting that the GDS “continues to exert every effort to achieve a long-term solution with Lufthansa and we are confident that one can be found.” STARWOOD BRACES FOR STEEP REVPAR DECLINE Starwood Hotels and Resorts is forecasting revenue per available room in the first quarter of 2009 to drop between 17 percent and 19 percent worldwide and between 27 percent and 30 percent in North America, from the same period in 2008. The first major multibrand hotel company to report its earnings for the fourth quarter of 2008 now expects same-store branded hotel earnings in 2009 to decline 35 percent and drop 10 percent in management and franchise revenue. Starwood’s worldwide fourth-quarter RevPAR was down 12.1 percent, occupancy down 4.8 percent and average daily rate down 5.4 percent. Corporate negotiated rates for 2009 are nearly complete and have remained flat year-over-year, Starwood executives said. —Seth Harris Business Travel News 4 Monday, February 9, 2009 www.BTNonline.com http://www.btnonline.com/bn http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - February 9, 2009

Business Travel News - February 9, 2009
Contents
Inside Track
Profiles In Travel Mgmt
Forum
Aviation
Lodging
Car & Ground Transportation
Travel Management
Destinations
Washington Wire

Business Travel News - February 9, 2009