Industry News 9-14-2007

*ASTA Mulls ARC Fee Increase
*EVA VIP Lounge Opens at LAX
*Overseas Travel to Top U.S. Cities Declines
*and more...

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ASTA Mulls ARC Fee Increase

In light of the recent announcement by the Airlines Reporting Corp. (ARC) that it plans to increase its annual fee by 172 percent as of Jan. 1, with larger increases likely in the future, the American Society of Travel Agents (ASTA) is examining possible legal options if continued talks with ARC are not productive.

“This is a clear case of the airlines demanding that travel agents pay more for the privilege of collecting the airlines’ money,” said Cheryl Hudak, CTC, ASTA president and CEO. “It’s a move that only a monopolist could expect to pull off. Such an increase is unprecedented in any business and frankly, it’s unconscionable.”

An all-member message sent by ASTA after the ARC announcement noted:

“The 172 percent increase is only the beginning. In four years ARC hopes to increase the fixed annual fee by more than 500 percent.

“A typical single office agency could end up paying nearly $900 in 2011, which represents a more than 500 percent increase. But it’s not just the independent locations that will end up suffering; an agency with five branches that exceeds the transaction ceiling would see an increase in its total fees from 2007 to 2008 from $26,370 to $38,645. And by 2011 that agency’s fee would exceed $113,000.

“ARC has tried to frame the increase as being related to the ‘investments’ ARC has made in the services provided to travel agencies and as more related to the ‘value’ of ARC’s services,” the message continued. “However, ARC has refused to provide financial data to support these claims, despite ASTA’s repeated requests for supporting data. While ARC has offered to eliminate fees for training classes and accreditation changes in 2008, ARC has provided no back-up data to support the true impact of such concessions on the average agent, or any agent for that matter.”

ASTA also points out that regardless of how ARC positions this increase, it is not disputed that virtually all of the increase in agency costs will be used to offset the airlines’ ARC costs.

“ARC is effectively saying ‘the airlines don’t want to pay as much for ARC’s services going forward, so you will have to make up the difference,” the statement said.

The new fee proposal must first be voted upon by the ARC Fees and Charges Working Group and ARC Board of Directors.

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EVA Air’s Business Class VIP Lounge
EVA VIP Lounge Opens at LAX

EVA Air has rolled out the red carpet to its luxurious new $5 million VIP lounge in the Tom Bradley International Terminal of Los Angeles International Airport. Available for the comfort and convenience of the airline’s Premium Laurel Class and Silver, Gold and Diamond Card frequent-flyer club passengers, the 8,000-square-foot Los Angeles International Lounge is located on the fourth floor in the north wing of the terminal and can be accessed after passing through security checkpoints.

EVA’s Super Business and Super First Class passengers are also entitled to lounge access. Diamond and Gold Card members of EVA’s Evergreen Club frequent-flyer program can bring one guest into the lounge. In addition, Evergreen Club members at these levels can redeem 5,000 mileage points to bring one family member or guest into the lounge. The spacious lounge has 186 seats, Wi-Fi and a business center equipped with individual work stations that have laptop hook-ups and telephones plus photocopier and fax services. It has its own showers for guests. And one section can be partitioned to give dignitaries or celebrities privacy.

While waiting to board one of EVA’s 17 weekly flights to Asia or in transit, guests can relax and enjoy delicious ethnic and local foods, including sushi, sandwiches, fresh fruit and favorite snacks. The lounge also has a full bar.

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Overseas tourism has dropped 22
percent in Seattle, a trend seen in other cities.
Overseas Travel to Top U.S. Cities Declines

Despite the drop in the value of the dollar, which makes America a relative travel bargain, overseas travel to top U.S. cities remains depressed. The U.S. Conference of Mayors has called for the creation of a nationally coordinated promotion campaign to welcome more overseas visitors. A study by Oxford Economics shows that the promotion, combined with visa and entry reforms already passed by Congress, would yield 1.6 million new visitors per year. Those visitors would spend an estimated $8 billion per year, yielding an additional $850 million per year in new federal tax revenue.

The Travel Promotion Act of 2007 (S.1661 / H.R. 3232) would establish the nationally coordinated travel promotion campaign U.S. mayors have called for, at no cost to the American taxpayer. The Act requires matching funds from industry, which would finance more promotion, yielding even higher returns than those cited by Oxford Economics.

Starwood Joins Galileo Best Available Rate Program

Global Distribution System Galileo has announced that its industry-leading Best Available Rate (BAR) guarantee program now includes hotel and leisure market leader Starwood Hotels & Resorts Worldwide Inc. Starwood joins the list of over 150 hotel brands participating in the BAR program.

The Galileo BAR program enables major hotel chains to provide travel agents with access to the best available published, non-restricted rates offered through any other GDS or online distribution channels. Hotels that participate in Galileo’s BAR program have committed to ensuring that their lowest unrestricted public rates are made available for sale in Galileo. The BAR program was first launched two years ago.

Starwood Hotels & Resorts is one of the largest hotel and leisure companies in the world, with over 870 properties in over 95 countries. Its globally renowned brands include Westin, Sheraton, W Hotels, St. Regis, Luxury Collection, Le Meridien, Four Points, and the upcoming aloft and Element.

“Starwood places great value in the service provided by travel agents around the globe,” said Linda Kent, vice president, Electronic Distribution for Starwood. “Our participation in the Galileo BAR program is an extension of the partnership we have with Galileo in providing the best information possible to the agency community and their customers.”

Carnival Forms Spanish Cruise Line

Carnival Corporation & plc, the world’s largest cruise vacation company, and Orizonia Corporacion, Spain’s largest travel company, have finalized an agreement for a multi-ship cruise brand serving the Spanish market.

The agreement will give Carnival a 75 percent interest in the joint venture, and 25 percent to Orizonia. The new company will be called Iberocruceros.

In addition to Orizonia’s 1,244-passenger Grand Mistral and 834-passenger Grand Voyager, the 1,486-passenger Celebration from Carnival Cruise Lines’ fleet will be transferred to the new company. After an extensive renovation, the Celebration is scheduled to enter service in late spring 2008.

Alfredo Serrano, currently general manager of the Iberojet fleet, has been appointed general manager of Iberocruceros, which will be headquartered in Madrid. Serrano will report to the newly formed Iberocruceros board whose chairman will be Pier Luigi Foschi, chairman and CEO of Carnival’s Costa Cruises unit.

“The new Iberocruceros joint venture will build upon the tremendous brand awareness of Orizonia’s Iberojet operations one of Spain’s leading vacation companies while providing a solid platform for expanding in the fast-growing European marketplace,” said Micky Arison, Carnival Corporation & plc’s chairman and CEO. The three Iberocruceros ships will fly the Italian flag.

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