Executive View

Preview 2014: Executive View

By Arnie Weissmann

We’re apparently making progress.

Interviews with CEOs about the coming year for our Preview issue have, over the past five years, moved from characterizing economic conditions as “bouncing along the bottom” to “uncertain” to, finally, “cautiously optimistic.”

This year, we decided to focus on the outlook of three rookie CEOs, all of whom have been in their position for a year or less. But each comes to their position with ample industry experience, and while their outlook is more buoyant than what we’ve become accustomed to since the recession began, their expectations about 2014 appear to be tempered by the hard-earned knowledge that negative events can descend with great swiftness. Here’s the viewpoint from those CEOs, operating in very different aspects of the industry.

ArnoldDonaldArnold Donald

CEO, Carnival Corp.

Overall, consumer spending is trending up a bit. We certainly see some strengthening in terms of demand for cruising, and we’re going to be investing heavily to drive that further. The whole employment situation, which is the real rock, the foundation, is trending up a bit, but it’s still challenging, and we have to pay really close attention to that because people having good-paying jobs is what will drive sustainable economic advance. Right now, businesses are growing a bit, but they aren’t necessarily adding a lot of people.

It clearly feels more positive on a global basis than we have experienced over the last few years. There are still going to be significant challenges in the European economy next year, continued pressures, especially in Spain and, to some degree, Italy. Those economies still face significant uphill battles, and I think things could improve somewhat in the U.K. But Germany continues to be strong, and if you cut across all of Europe, you would have to say yes, things are improving somewhat.

Asia is, on balance, positive. There’s always the risk of a sudden shock from mainland China. It’s sort of like the United States — it’s become such an important economy for the global business climate that any little shocks have serious reverberations. Their government has, in my opinion, done a better-than-reasonable job managing a complex economy, but having said that, things can turn pretty quickly. I think you always have to be a little cautious in China.

What I’m excited about in 2014 is that we can put incidents [like the stranding of the Carnival Triumph] behind us as an industry. I think the media is beginning to put things in proper perspective and realize that these types of incidents are rare, and we’ll get increasingly fairer play around events that can happen when you have so many pieces of equipment operating and so many people at sea.

The Triumph [incident] was, ultimately, a mechanical failure, and because the media put so much attention on it, they’ve now begun to learn a lot about the cruise industry and that the vast, vast, vast majority of guests don’t experience anything other than a great vacation. I’m optimistic [we’ll get] much more of what we would consider appropriate treatment by the media.

But we have to be prepared from an industry standpoint, and certainly from a company standpoint, to expect that there’ll be some negative things next year. We try to factor that into our planning and try to develop contingencies and make certain that we’re still able to reposition ships, redirect resources, time, expenditures, all those things you do in managing a business.

My real opinion is that we should do well in a good economy, and we should do even better in a poor economy, the reason being we are far and away the best vacation value. And I think our task as an industry, and certainly ours as Carnival Corp., is to effectively convey that over time to the consuming public. Because even in bad times, people still need a break, and in tougher times, we’re an even better value than we are in great times because we’re economical and such a rich vacation experience.

[In terms of noneconomic consumer trends], there continues to be increasingly rapid adoption of electronic behaviors, whether that’s online communications or mobile apps and online transaction activities. How people consume information, how much information they consume, how quickly information gets transferred, how quickly misinformation gets transferred — those are the dominant trends of our current age, and I see that just becoming even more pronounced in 2014.

It affects all aspects of our business. In basic product design, we have to be really in tune to the needs of our guests if we want to exceed their expectations, [including] onboard access to WiFi and access to activities that are more digital. [It affects] how people book through travel professionals and how they provide information, how [the company] shows up on websites and [the ways we] effectively convey each of our brands, whether through YouTube or conventional media. How we utilize our guests’ experiences and how they communicate with their friends and colleagues and loved ones, both from a promotional standpoint for us with testimonials of the great experience they’re having on board and from what they’re seeing around the world if they travel on our vessels.

We also saw the impact of this from the negative incidents that happened earlier this year and in previous years, where one little thing happens and somebody can Instagram it or YouTube it. And that becomes the image, even though it may have been just a single cabin that had a 15-minute temporary kind of thing, and [it can] affect the psychology of potentially millions of people about cruising. It’s just a dramatic effect, and affects every aspect of what we do.

[As regards potential cruise industry consolidation], I can’t say that for 2014 I see specific consolidation, but what I can tell you is that scale matters. You’re constantly trying to optimize your fleet, and I think every company in the industry will be looking for which ships, if any, to move out of their fleet, so in that regard there could be some consolidation. And there are newbuilds coming on, of course.

In terms of companies acquiring other companies, or brands acquiring other brands, that’s always an ongoing activity. I don’t see any reason why that would stop. But it’s unpredictable.

Finally, travel agents will play an increasingly important role in 2014 and beyond, especially as Carnival and the industry work to reach new cruisers. The value that travel agents bring to this equation is immense in our efforts to grow the overall market.

Alex Sharpe 2011Alex Sharpe

CEO, Signature Travel Network

In my years at Regent Seven Seas Cruises, we could map everything to the Dow [Jones Industrial Average]. I’m not sure that that’s the same anymore, because it’s more about customer confidence, and consumers don’t have the same confidence in the Dow numbers that they once did.

Hitting 10,000 used to mean a whole lot. Now, whether that new norm is 12,000 or 13,000, it doesn’t give the boomer generation, or even the older generation, the same confidence. They look for other indicators.

In the past, when we were heading into a year like we are now, with forward-booking trends up, we were crazy optimistic. But now we’re cautiously optimistic, because I think we’ve had the wind taken out of our sails on more than one occasion, whether from an economic change, hangover from elections or things completely out of left field, like the tragedies with Concordia and the Carnival ships. And so I think everybody now is a little bit more of a grinder, keeping things close to their vest and pushing forward.

I don’t think we’ll take anything for granted. We’ll just market hard and be smart with the way we’re targeting our customers. Every customer has to continue to be touched, continually sold and provided more information, building excitement toward their trip, or you run the risk of losing them at the first sign of insecurity or drop in confidence. We try to address that through technology and marketing initiatives, but sometimes it’s just customer service and Sales 101. Keep that contact going on throughout, because even if we’re ahead now, we have a long way to go.

As far as actual travel trends go, the idea of active adventure and family travel have been really important to consumers. We have members that solely focus on those for the majority of their business — you know, the bucket-list stuff. Not an overwhelming carpe diem, but it’s what’s important to people: family and adventure. Even more so in the luxury segment.

I think our relationships with the suppliers are more strategic than ever. One of the things we preach is that bigger isn’t necessarily better. They all want more revenue, no doubt about it, but how are they getting the revenue? What kind of customers are we sending to them? Are we growing on a per-office basis?

Frankly, the number of travel agencies is going down, so they need to get more from the ones that are there. It’s not in our model to go out and find 20 to 30 new members every year and then say, “Look how we grew.” So we’ve dug in much, much deeper from a database perspective so that our 214 members put the right offers, the right product, in front of our millions of households. Suppliers see the value in our database; we have that rich data on our customers that not everyone has, and that’s really strengthened the relationship with supplier partners over the last few years.

AlexZozayaAlex Zozaya

CEO, Apple Leisure Group

There are significant global trends occurring that, in a sense, communicate with each other. The situation in Egypt — a lot of Europeans who used to go to North Africa are looking for beaches and sun and value, and as a result, there has been a short-term benefit for Spain, and also Greece and Croatia. We also see a big increase in the long-haul Russian market. These changing geographic and market trends particularly affect Europe.

Within Asia, the most noticeable trend is with the Chinese market. It’s not necessarily affecting our operations in the U.S., but it clearly will have an important impact on our operations in Mexico and the Caribbean. Even though they’re not yet coming in big numbers, absolute numbers, the percentage of growth is very impressive.

Our destination management company, Amstar, now has Chinese staff — not only people who speak Chinese, but Chinese who understand the culture.

They have different needs and expectations. For example, the way they approach beaches is completely different from Europeans or Americans. The Chinese don’t like to tan. They go to the beach very early in the morning and return at sunset. So that changes everything, from the time they have breakfast to their approach to entertainment. They tend to spend a lot more time outside of the hotel touring. Then the king-size bed — that’s an issue. They tend to enjoy double beds, even for couples, even for honeymooners.

They have different preferences for what and when they eat, and it affects everything, including the room service menus. We receive many in small social groups, so we need to be prepared. Rather than having the typical setting and tables for two, we need to be ready to have larger groups of eight and 12 and 14 people at the same time, all eating together.

The other thing is the length of stay. You would think the length of stay would be very long. It is a longer stay, but not in a specific hotel; they tend to stay only two or three nights and then move. Sometimes they move from Cancun to the Riviera Maya, as if two completely different destinations.

We’ll add things, like a TV channel in Chinese, but not to every hotel. Some [properties] seem to be more conducive for them, so we’re focusing on two or three.

Don’t get me wrong, our main focus is still the U.S., by far. We believe there are some states that should be able to give us more guests than the whole of China.

From a macro aspect, I believe 2014 is going to be a better year than 2013. In fact, I think we’ve seen better numbers than in the last eight years. For Apple Leisure Group, it’s going to be the first full 12-month year that we operate with our current six companies. Integrating Travel Impressions and CheapCaribbean in, that’s obviously one of our priorities.

The big challenge is to keep them as separate companies with completely independent marketing strategies, price and product. For instance, Travel Impressions will continue to be a travel agent brand only, and the main focus will continue to be service and knowledge, particularly luxury products.

But at the same time, we need to find strong synergies in the back-of-house operations, to run the businesses more efficiently and deliver more value. That’s the opportunity. If we look at the numbers as if we had owned everything in 2013, the growth in 2014 will be 30% to 35%.

That isn’t a wish list number; it’s already happening. About 55% to 60% of our profitability happens in the first months of the year, and we already have it on the books, with over 27% more bookings than this time last year.

The challenge is in markups, because the consolidation of the airlines has raised the average price per ticket substantially. We’re facing higher taxes in Jamaica, Quintana Roo, Los Cabos.

Partly as a result, we’ve seen that consumers are finding more value in packaging than buying the pieces individually. Growth in 2013 in packaging was a lot stronger than land-only. I see this as a great opportunity for travel agents who can really deliver more value and knowledge.

In fact, the total number of passengers we have as a group is going to be double from the year before, going from almost a million to a little bit over 2 million. That opens up an opportunity for us on the charter side. We’ll increase the number of charters more than 20% year over year because we can sell seats on the same charter for Apple Vacations, Travel Impressions and CheapCaribbean.

And the fact that we have now three distribution companies with heavy traffic to Mexico and the Caribbean obviously also helps the hotel company, AMResorts, to grow faster and to grow to destinations that weren’t feasible before the acquisitions.

And it opens tremendous opportunities for new properties from existing brands, even within currently served destinations, as well as new brands that may appeal to customers who are not staying today at the five-star AMResorts because of the price point. We have an opportunity to develop a new hotel product that is more appealing to consumers who are more into the value, four-star category.

For example, Puerto Plata in Dominican Republic. Apple Vacations sold there, Travel Impressions barely sold there, but CheapCaribbean is the No. 1 seller of the destination. That opens a possibility for us, but if CheapCaribbean is going to be the main distributor, we’re not going to go in with a five-star, high end product.

Curacao is another one. We have one hotel, an [AMResorts] Sunscape. With Travel Impressions and CheapCaribbean, we can have two or three more hotels with different price points and different brands. Apple Vacations was never very strong in the Bahamas, particularly Nassau, but we now have No. 1, Travel Impressions, so with strong distribution, it opens opportunities for higher-end products.

And there are areas where we have strong distribution from all three — Cancun, Riviera Maya, Puerto Vallarta, Dominican Republic, Jamaica — and we have more than a million passengers who are not staying in our hotels, because they’re in the four-star categories. We can customize a product for them at the four-star level while continuing to support key business partners, because 50% of them, particularly in the Caribbean, are going to independent hotels. It’s a very, very fragmented product base.

The success of our brands and the awareness of our brands on the hotel side, on AMResorts, are mainly with travel agents, and that’s where our marketing dollars go, and that’s where most of our marketing and sales efforts go. Our strategy will continue to be to stay very focused with the travel agents.

It’s not a matter of shifting business from competitors or cruise ships, but we can generate new traffic, passengers who never had a passport before or had not considered traveling internationally. Now, because of convenience, price point, value for money, perception of reliability and the recommendation from expert travel agents, it’s an option. That’s what keeps us very, very optimistic.

We’re not particularly looking to acquire companies in 2014. After Bain Capital invested in us, one of the key growth strategies was not only to find upside by performing better organically but also by looking at the possibility of acquiring some strategic companies that would add value to the overall group. And that’s when we found Travel Impressions and then CheapCaribbean. But right now, we have to focus more on the correct integration of these businesses.

Still, we’re open to some type of opportunistic acquisitions, and as we speak, yes, we’re looking at different options. There’s a division that we didn’t have before dedicated to nothing but evaluating business that could add value to our group, that we could buy or merge with or do strategic alliances that could add value. And those could be anything from other tour operators to a consortium on the distribution side.

Of course, on the hotel side, we’re very, very actively looking at everything from existing hotels that could be reflagged to hotel chains that could add value, not just because of the number of management contracts but also because of their brands. We’ll always look into opportunities to grow, particularly on the hotel side. We’re going to see a big growth, and not just on newbuilds we have under construction.

The top stories of 2013

By Bill Poling

Year in reviewYears hence, you’ll want to have an answer when the person in the next rocking chair asks, “What year was it when we didn’t have any hurricanes?” That will be 2013.

This answer will be the same if they ask when ARC shut down Helix, when Delta bought a piece of Virgin Atlantic, when the New York Hilton gave up on room service, or when Hyatt went into all-inclusives.

But that will be just for starters. For the real conversation about 2013, you’ll need to refer to one of those Top 10 lists that journalists love to conjure up this time of year.

You’re in luck. We’ve done it again, and we present Travel Weekly’s Top 10 travel news stories of 2013.

Radical change 

for Carnival Corp.

• 2/18: Cruisers booked on Carnival Triumph forced to change plans
• 2/25: Triumph suits add to Carnival woes
• 7/1: Arison steps down as CEO, names successor
• 8/5: New on the job, Carnival Corp. CEO Arnold Donald is ‘listening’

A year after the devastating loss of life from the capsizing of the Costa Concordia, Carnival Corp. was again haunted early in 2013 after an engine room fire disabled the Carnival Triumph in the Gulf of Mexico on Feb. 10. The plight of the ship and its passengers, drifting with limited power and no propulsion, grabbed the headlines, flattened the Wave season for much of the industry and set the stage for what would turn out to be a year of transformation for the world’s largest cruise company.

In June, Carnival Corp. Chairman and CEO Micky Arison hired former Carnival Cruise Lines CEO Bob Dickinson as a consultant on distribution issues and to enhance the company’s relationships with travel agents.

But that was just the beginning.

Days later, Arison — son of co-founder Ted Arison — announced he was relinquishing the CEO role to long-time board member Arnold Donald, a relative unknown in the industry despite his 12 years of service as a director.

Soon there were signs of a new approach to trade relations. An open letter from Arison to agents, in a widely circulated advertisement in October, acknowledged the role of agents in the company’s success. And in response to agent concerns, Carnival Cruise Lines revised its rate structure to simplify its categories to make them easier for agents to explain and to sell.

The evolution continues. As Donald settled into his new role, the company reshuffled its top management, creating a new advisory role for former vice chairman and COO Howard Frank. The company also created Holland America Group, creating a central management for the Holland America, Princess and Seabourn brands.

In all, Carnival Corp. underwent more radical change in 2013 than it had in the previous decade.

Radical change at American Express

• 4/15: AmEx to sell Travel Impressions to Apple
• 9/16: AmEx agrees to sell publishing unit
• 9/16: AmEx closes its 20 travel offices
• 9/30: AmEx to sell half of business-travel division to Certares

American Express might be running a close second to Carnival as the year’s most changed travel company, partly a reflection of its renewed focus on financial services and a desire to pare down noncore functions.

The first jolt came in April with the sale of Travel Impressions and other AmEx tour operations to Apple Leisure Group, parent of Apple Vacations, AMResorts and other brands. The sale was not only notable for what AmEx was giving up, but for what it portends for Apple, newly acquisitive after a cash infusion by Bain Capital in 2012.

Months later came the divestiture of American Express Publishing Corp., publisher of Travel + Leisure and Food & Wine, to Time Inc.
American Express also disclosed plans to close some 20 storefront offices that sell leisure travel, moving agents in those offices into the ranks of work-at-home travel counselors.

But the big shocker came in September when it was announced that American Express was to sell half of its Global Business Travel division, essentially turning a $30 billion travel management operation into a 50-50 joint venture with an investment group headed by Certares International Bank.

As with the Travel Impressions sale, the transaction raised eyebrows not only because of what AmEx was spinning off, but also because of the identity of the buyer: The CEO of Certares is Michael “Greg” O’Hara, co-chair of Travel Leaders Group.

Where that leads could be prove to be a major story for 2014.

Whither Travelocity?

• 6/24: Travelocity Business sold to BCD
• 8/26 Expedia to power Travelocity sales
• 9/2 Expedia-Travelocity deal could shift online sales away from hotels

Travelocity was a pioneer in the online travel game. A decade ago, if there was talk of the “Big Two” in online travel, it was understood to mean Travelocity and Expedia, often in that order.

But by 2006, Expedia’s focus on merchant hotel sales had helped vault it to the No. 3 spot on Travel Weekly’s Power List, with sales volume of $15.6 billion. That was twice the total of the former online leader, which got a late start in the race for supremacy in hotel bookings.

Since Sabre was taken private by Silver Lake Partners and Texas Pacific Group in 2007, the inner workings of its Travelocity unit have been less than transparent, but two events in 2013 strongly suggest that the brand might be succumbing to its challenges.

In June, the company sold off its corporate booking tool, Travelocity Business, to BCD Travel for an undisclosed sum. There had been speculation at the time that the spin-off was part of a housecleaning prior to an initial public offering, but the stock offering never came.

Instead, two months later, Travelocity disclosed plans to essentially outsource all of its operations to Expedia, a virtual merger — or virtual takeover — that is expected to kick in next year.

In addition to giving a big boost to Expedia in its market-share battle with Priceline, the deal, in the words of one analyst, amounted to a Travelocity “surrender” to its long-time rival.

Travelocity, however, remained insistent that even though Expedia will be powering its site, the deal was a partnership rather than a merger, and that it fully intended to grow the brand.

Where does the gnome go from here?

The debate over NDC

• 3/18: IATA seeks DOT OK on NDC resolution
• 4/22: Fear of unknown grows rampant as IATA pushes NDC initiative
• 5/6: Filings with DOT on NDC reveal deep airlines/agents split
• 7/21: IATA responds to critics of Resolution 787

IATA filed its application for DOT approval of its Resolution 787 in March, setting off a firestorm of criticism. IATA described the plan as a well-intentioned effort to set XML messaging standards so that airlines could distribute ancillary services and customized service bundles through the agency channel.

That sounded innocent enough, but critics charged that behind the veneer of innocence, the airlines were trying to force a new distribution paradigm down the industry’s throat. And the filibuster was joined.

Numerous stakeholders in the intermediary channel, including ASTA and the Travel Technology Association, said the plan would eliminate comparison shopping, prevent consumers from obtaining anonymous fare quotes and require travelers to reveal too many personal details to make a booking — all of which IATA denied.

As negative comments overwhelmed the DOT docket, the airlines passed a resolution at IATA’s Annual General Meeting in June stating that the New Distribution Capability (NDC) wouldn’t do any of the pernicious things that critics said it was trying to do.

As the year progressed, tempers cooled as IATA offered, and ASTA accepted, an opportunity to get more involved in the process. Travelport adopted a more conciliatory attitude, and other industry officials began to admit publicly that if new airline products are to be available through agents, then some kind of XML messaging standard will be a crucial part of making that happen, whether it comes from IATA or not.

Merger surprise

• 2/18: AA-US airways merger valued at $11 billion
• 8/19 DOJ antitrust suit to prolong battle that’s decades old
• 11/18 Slots deal clears way for merger

The Justice Department’s antitrust division surprised the industry in August by challenging the American-US Airways merger, an $11 billion deal announced in February and widely seen as the final act in a series of airline mega-mergers.

The department claimed that the merger would reduce competition in numerous domestic markets and give the merged carrier an impermissibly large share of takeoff and landing slots at Washington’s Reagan National Airport.

Although consumer advocates cheered the move for attempting to put the brakes on the airline merger trend, the challenge was widely criticized by business and legal analysts, who said the case rested on a faulty analysis.

The carriers vowed to fight it out in court, but after the presiding judge asked the parties to give mediation a shot, they quickly came up with a settlement.

The deal calls for the carriers to sell off 52 pairs of Washington slots and 17 pairs at New York LaGuardia and to relinquish two gates at each of five major airports around the country.

Determined to get more low-fare competitors and new entrants into the slot-controlled airports, the Justice Department will supervise the sales and approve the buyers.

American and US Airways said the divestiture and other conditions won’t cause them to miss their goal of $1 billion in synergies after the first year, and they closed the deal on Dec. 9, emerging as American Airlines Group.

Government dysfunction

• 2/25: Travel could be the public face of sequestration’s budget cuts
• 4/22 Industry gets first measure of sequester’s travel impact
• 4/29: FAA: Staffing cuts created 40% jump in delayed flights
• 5/26: FAA budget issue might obscure more weighty industry factors

Goofy government might be an everyday event in Washington, but in 2013 partisan gridlock in Congress created two avoidable fiscal crises that had a direct impact on travel: a sequester and a shutdown.

The sequester consisted of a package of automatic, across-the-board spending cuts designed to be so harsh and indiscriminate that Congress would be motivated to pass a budget in order to avoid them.

It didn’t work. The spending cuts, softened by an interim amendment, went into effect in March, disrupting air traffic control and slowing customs processing at gateway airports. It even threatened to delay the reopening of Yellowstone’s snow-covered roads, until some local tourism and business interests in Wyoming chipped in to get the roads plowed.

The spike in flight delays prompted Congress to soften the impact on the FAA. The furor over funding subsided until the beginning of the fiscal year, when another budget stalemate shut down virtually the entire federal government for 16 days in October.

The shutdown emptied national parks and closed numerous attractions, monuments and museums to the puzzlement of many overseas visitors. Travel or participation in conventions or meetings by government employees also came to a halt.

The U.S. Travel Association estimated that the episode cost the economy $152 million a day in travel-related spending, or $2.4 billion in all. Whether our elected officials learned anything from it remains to be seen.

Regulating cruises?

• 3/25: New York Sen. Schumer proposes cruise bill of rights
• 5/27: Cruise lines adopt first ‘bill of rights’ for clients at sea
• 8/22: Rockefeller calls for DOT oversight tax on cruise lines

Acting to quell growing criticism and media attention, CLIA member cruise lines in May voluntarily adopted a bill of rights for passengers, specifying, among other things, the right to refunds for canceled or interrupted cruises and the lines’ obligations in the event of disruptions or emergencies.

The 10-point plan went beyond a six-point list that had been suggested by Sen. Charles Schumer (D-N.Y.), but it wasn’t enough to deter Sen. Jay Rockefeller (D-W.Va.), the powerful head of the Senate Commerce Committee.

Rockefeller, who browbeat industry executives during a July oversight hearing, introduced a Cruise Passenger Protection Act that would make the CLIA Bill of Rights enforceable in courts and empower the Transportation Department to impose a consumer protection regime on cruise lines, with the power to levy fines for violations.

He also introduced a bill to address his long-standing complaint that cruise lines don’t pay their fair share of federal taxes. The bill would subject foreign flag cruise lines to U.S. income tax and add a 5% excise tax, or “gross receipts” tax, on all U.S.-related cruise revenue, potentially amounting to hundreds of millions of dollars per year.

The cruise lines are fighting it and, from the industry’s perspective, the congressional Republicans’ general distaste for new taxes and new regulations may work in their favor, but the cruise lines’ public image is still fragile. Could another stranding or incident at sea tip the balance?

Reinventing car rental

• 1/7: Avis’ Zipcar purchase suggests car-sharing business has legs
• 4/8: Hertz bets on car-sharing as ‘future’ of auto rentals
• 7/22: Car-sharing the newest frontier for big three rental firms

When did car-sharing come of age? You could say it was in 2007 when Zipcar and Flexcar merged to create a single national brand, or in 2011 when Zipcar’s IPO gave it a market cap of $1 billion, but we vote for Jan. 1, 2013, when Avis Budget agreed to pony up $500 million to acquire Zipcar, the leading car-share operator with, at the time, some 750,000 members — many on college campuses.

Some of Zipcar’s fans saw the move as a dispiriting takeover of a plucky upstart by a corporate Goliath. But the transaction also validated the business model and signaled that car-sharing was here to stay: Avis not only wanted in, it was paying a premium and paying in cash to get in fast.

The deal closed in March, and within weeks, Hertz put its own car-share division on steroids, adding self-service technology for hourly rentals to thousands of cars in its fleet. Dubbed Hertz 24/7, the service is now available in some 300 locations in six countries.

Enterprise also got into the act by combining several acquisitions to create Enterprise CarShare, and then moved into the ride-share space by acquiring Zimride, which matches drivers with passengers — all online, of course.

Car-sharing took on an added twist at several airports this year when startups FlightCar and Hubber began to recruit airline passengers to make their own cars available for short-term rentals while they were out of town.

Why rent when you can share?

Dreamliner woes

• 1/21: Safety concerns prompt 787s to be grounded around globe
• 4/29: United eyes 787 return for Denver-Japan

In a severe blow to Boeing, the FAA grounded the entire fleet of the 787 Dreamliner for three months early this year, the first such action against a major airliner since the DC-10 grounding in 1979.

This time, the grounding did not follow a horrendous crash, but the 787, barely into its second year of service, had experienced numerous instances of overheating, smoke and fires in its battery compartment early in January. A few such incidents could be chalked up to the teething pains common with most new aircraft types, but by midmonth the FAA had seen enough.

The immediate impact was confined to the handful of airlines that had taken delivery, with the schedules of Japanese rivals Japan Airlines and All Nippon Airways being the hardest hit.

Before its launch, the 787’s composite structure was thought to be the most radical and risky feature of the aircraft, but the grounding was triggered by something much more mundane — the backup battery for the auxiliary power system, for which Boeing had chosen lithium.

The grounding prompted Airbus, which is developing a competing aircraft, the A350, to forgo lithium batteries for the initial version of its plane and rely instead on older (and heavier) nickel-cadmium technology.

Boeing engineers came up with a solution that got the aircraft back into service, and deliveries resumed, with Boeing boldly predicting that the grounding would not have a significant financial impact.

Though the 787 program has been plagued by delays, some 60 airlines around the world have 1,000 on order. Perhaps the Dreamliner is finally over the hump.

PEDs in flight

• 11/4: FAA approves use of mobile devices at takeoff, landing
• 11/25: FCC to review ban on in-flight cellular

In-flight service has been revolutionized by seats, beds, baggage fees and WiFi, but airline passengers were mostly turned on in 2013 by government pronouncements about what they could and could not do with their personal electronic devices.

The FAA kicked things off in 2012 when it empaneled a high-level advisory committee to review all the technical and human factors related to the use of electronic devices such as laptops, e-readers, tablets and smartphones during critical phases of flight, such as takeoffs and landings.

The panel made its recommendations in September 2013, and a month later the FAA adopted a procedure that would enable airlines to permit gate-to-gate use of virtually all devices except cellphones for voice calls, which remained the subject of a ban by the Federal Communications Commission (FCC).

Within days, most major airlines were taking steps to get in compliance with the FAA guidance, to the cheers of frequent and infrequent flyers alike.

The rest of the world took notice. The European Aviation Safety Agency, which sets standards for the European Union, had a representative on the FAA panel and followed the U.S. action with a pronouncement of its own, closely matching the U.S. rule.

But the story didn’t end there. In November, the FCC made a surprise announcement that it was reviewing its ban on cellphone usage, which was based on outdated technical information.

Some foreign airlines had already proved that with so-called Picocells or cellular relay stations on their aircraft, it was possible to provide in-flight cell service without disrupting networks on the ground.

The news was greeted with trepidation by travelers, who feared an outbreak of loud and unending cellphone chatter, but the FCC cautioned that it’s merely addressing the question of technical standards.

Whether to allow mobile phone use in flight — for data, texting and/or voice — will remain a decision for individual airlines, all of whom know that passengers can vote with their feet — and their tweets.

But just hours after the FCC voted to begin its review, Transportation Secretary Anthony Foxx stated that the Department of Transportation was assuming authority over the use of cellphones onboard aircraft on the grounds that it was a matter of consumer protection.

Facebook Graph Search seen as ‘game changer’

Facebook Graph Search seen as ‘game changer’

By Laura Del Rosso

InsightHome-based agents who only have been dipping their toes into social media, questioning whether such efforts generate a return on investment, may want to rethink their position as Facebook rolls out Graph Search, a program that could dramatically improve travel marketing opportunities.

Susan Black, executive vice president and chief marketing officer for Travel Impressions, calls Graph Search a “game changer.”

“For those travel agents who haven’t gotten the [social media] bug, this is going to be what Google was to the Internet,” Black said. “It’s going to be unbelievable how it will change the way people use Facebook.”LauraDelRosso

Graph Search, which has been available to some users in beta testing and is being rolled out gradually to all Facebook users, is a search engine that has been described as a cross between Google, Yelp and LinkedIn.

It enables Facebook users to search for people, places and things based on their friends and their location. For example, a user can search “Friends who have been to Cancun” or “Hotels in Montreal” and any relevant tagged photos pop up.

For agents, the potential is enormous, said Black, because any photos that are tagged from vacations and other trips will show up in searches.

“Say someone wants to travel to Cancun and wants to get information. They can search their friends and even friends of friends and pull up photos of Cancun that have been tagged. … This is an amazing opportunity for travel agents who have been to a place and know it well to demonstrate their expertise.”

Black said that even without Graph Search, Facebook offers much opportunity for marketing, particularly to engage with potential clients in ways that show travel knowledge and to promote not solely based on price.

“What travel agents do best is to use their expertise and inside information, and that’s what they should be showing on social media. It’s like going to a cocktail party. You wouldn’t just introduce yourself at a party and immediately tell someone there’s a Caribbean package available for $899. You’d engage with them first, build a relationship and show your expertise. It should be 80% telling your story and 20% making the sale.”

Black and Katie Gorga, senior manager of social media, conduct social media workshops for agents through Travel Impressions’ Social U program, most recently at the New York Times Travel Show where 150 agents heard their presentation “Going Viral in 2013: 42 Tips to Get More Fans, Generate Buzz and Drive Sales.”

Graph Search will be the topic of the next Social U seminar on March 12 at 2 p.m. Eastern online.