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A complete analysis of
the Airline, Hotel & Travel Industry, including trends, statistics and profiles
of the 300 most successful Airline, Hotel & Travel firms, is available in the
Plunkett's Airline, Hotel &
Travel Industry Almanac.
Represents
subscriber only content.
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Private Jet Rentals Rise in the Form of Fractional
Share Ownership

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Major Airlines Buy into the Fractional Share Game

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Boeing and Airbus Go Head to Head with New Concepts
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Airports Ramp Up to Accommodate High
Traffic and New Aircraft
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Deregulation Opens Huge Travel Markets in China and India
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Booking Travel Over the Internet Continues Rapid Growth

- Sustainable
Tourism and Ecotourism Grow as Certification Standards Emerge

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Destination Club Membership Is on the Rise
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As Demand Increases, Hotels Are Adding
Rooms and Fees
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Cruise Industry Bookings are Strong, Including Berths on
Luxury Liners
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Convention Center Space is Expanding Rapidly, Hoping for
a Rebound in Meetings

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Security Concerns, Regulations and Costs Complicate Transportation

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Travel-Based Retailing Takes Off

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High Speed Passenger Trains, including Maglev, Gain New
Acceptance

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Self Check-In Kiosks, RFID and Other New Technologies Save
Labor Costs for Airlines and Hotels

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The Future of Travel

1.
Introduction to the Travel Industry
The past several years have seen dramatic changes
in the travel industry. In the earliest edition of this almanac
(2002), we detailed the massive losses and restructurings
incurred by airlines, hotels and cruise ships following 9/11.
Today, we paint a rosier picture. Although the major airlines
are still trying to emerge from the rubble of recent events,
other types of travel companies have eagerly seized new opportunities
and built solid businesses. Indeed, one of the biggest trends
reported in our first edition is no longer just a trend—discount
airlines are the new paradigm in air travel.
Meanwhile, online travel agencies like Orbitz
and Expedia continue to steal market share from traditional
agencies. Leisure and business travel are enjoying a nice
rebound, giving firms operating hotels, cruise ships and rental
cars the opportunity to raise rates. Regional jets and air
taxis promise convenient alternatives to conventional air
travel, while upscale time-shares and the Queen Mary 2 offer
new experiences for the wealthy (and those who want to live
the rich life temporarily).
As 2005 draws to a close, several questions
loom regarding the near-term future of the travel industry.
The largest wild card is the price of gasoline, fuel for cruise
ships and jet fuel. Not long ago, Americans, for example,
were accustomed to paying about one dollar for a gallon of
gasoline. Today, American consumers and businesses are faced
with price three times as much. This not only makes it much
more expensive to travel by automobile or to drive cross-country
in the RV, it also cuts deeply into discretionary spending
for leisure and business travel. Meanwhile, the traditional
airline business remains difficult at best due to a number
of factors (such as older, maintenance-intense fleets and
inefficient route systems), and the soaring price of jet aviation
fuel could easily put the nail in the coffin for one or two
struggling airlines. The cost of jet fuel, at the very least,
will delay a return to profitability for legacy airlines and
hurt the financial results of discount and regional airlines.
Additional near-term effects of summer 2005’s
hurricane Katrina will be hard on the U.S. travel industry
in some parts of the nation, while boosting business in other
areas. Clearly, Gulf Coast hotels, resorts, cruise ports,
tourist attractions, casinos and convention centers in Louisiana,
Alabama and Mississippi are completely out of commission.
Many facilities will be replaced, or rebuilt and eventually
back in business, but the process will be lengthy and expensive.
Meanwhile, convention facilities in cities including Houston
are off the market for the near term while they are used as
temporary housing for hurricane evacuees. Some meetings planned
in those cities will be cancelled entirely; others will be
moved to alternative cities. Since there is a glut of new
convention facilities nationwide, finding alternative sites
may be relatively easy. Many major hotel firms, from Hyatt
to Harrah’s suffered immense damage to their Gulf Coast
hotel properties.
In North America, a robust business environment
and growing real estate and stock market values have fostered
a rising tide in both business and leisure travel. Airplane
passenger loads are high. Cruise ships are nearly full. Resorts
and hotels have enjoyed climbing occupancy, room rates and
profits. Tourists are flocking to resorts in Mexico and Canada.
Vacation property and time-share sales are extremely high.
Las Vegas continues to grow at an astounding rate. Also, many
U.S. airports have grown, or are expanding, via huge construction
projects.
In the global travel and tourism business, threats
of terrorism continue to cause the travel industry to evolve.
At the same time, Thailand and neighboring nations are struggling
to rebuild their tourism sectors after the tsunami of December
2004. On a more positive note, economies in many parts of
the world are much stronger than they were in 2001 through
2003. Business travel to certain nations is absolutely booming,
especially India and China. Tourism is soaring in New Zealand,
as well as in many new or alternative travel destinations
around the world. Ecotourism and adventure tourism are booming.
Affluent retirees from the U.S., Canada and Japan are traveling
more and more, while tourists from Europe are flocking to
U.S. cities to take advantage of bargain prices due to the
relatively low value of the U.S. dollar. While the high-flying
days of the tech boom/travel boom of the 90s are gone, today’s
outlook for the travel industry is one of innovation, high
occupancy rates, healthy competition and, outside of the legacy
airlines, returning profits. The following is a summary of
some of the exciting changes taking place airline, hotel and
travel industry.
Internet Research
Tip:
For extensive information and statistics on the entire
travel sector, visit:
Travel Industry Association of America at www.tia.org
World Tourism Organization at www.world-tourism.org
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