Cruise’s comeback, wars in the Middle East and Europe, the Maui wildfires, the Disney-DeSantis feud and JetBlue’s days in court all made headlines this year
The biggest news of 2023 may be that among the travel stories that were most impactful this year, not one was about Covid. There were no major outbreaks, restrictions were a thing of the past and the world was almost entirely open for travel.
Of course, many of the stories that shaped 2023 the most have their origins in the pandemic, such as the comeback of cruise, the travel advisor shortage and demand for faster commission payments.
But quite a few Travel Weekly stories were connected to disasters: the Maui wildfires, wars in Israel and Ukraine, the OceanGate implosion. Others were potentially significant alterations of business dynamics with the potential to shape the industry for years to come, such as American’s NDC push and a judge striking down the American-JetBlue Northeast Alliance. Some stories are a reflection of our time, like Disney in the crosshairs of Florida’s highest office and a national reckoning over resort fees.
In many ways, the turbulence of 2023 ended up making it perhaps the most eventful year in travel since the pandemic started as well as the one in which travel seemed finally able to fully move forward.
Cruise comes roaring back
No other segment of travel was as battered by the pandemic as cruise: The industry shut down almost completely for 18 months and spent three years taking on debt while hemorrhaging money.
That all changed this year.
Entering 2023, only one of the Big Three, Royal Caribbean Group, had managed to turn a profitable quarter since the pandemic began. This year, Royal, Carnival Corp. and Norwegian Cruise Line Holdings all started making money again.
Their overall performance was driven by a groundswell of demand during the first full year with virtually no travel restrictions. Cruise lines had their full fleets in the water, and they took full advantage, with occupancy climbing past 100%. They also benefitted from what seemed to be an insatiable appetite for onboard spending.
Jason Liberty, CEO of Royal Caribbean Group, could have been speaking for the industry at large when, in October, he called 2023 a “banner year … We are feeling very good about the business, the demand for our brands, the demand for our ships and in destinations.”
The Maui fires
The wildfires that swept through West Maui on Aug. 8 killed 97 people and leveled most of Lahaina, the former capital of the Hawaiian Kingdom and the historical and cultural heart of the island.
Maui has since suffered a second catastrophe as tourism, by far the main driver of its economy, plummeted in the aftermath of the fires, even in unaffected parts of the island.
Regarding visitation, Sherry Duong, executive director of the Maui Visitors & Convention Bureau, said in October that “we are in a crisis-level emergency.”
Despite pleas to mainlanders to visit that were made by Hawaiian officials and tourism groups, the Hawaii Tourism Authority said that domestic air seats to Maui were likely to be down more than 20% year over year in November and December. The island has lost up to $11 million per day in traveler spend, according to the authority.
Meanwhile, Pleasant Holidays reported that Hawaii would lose its long-standing position as the packager’s top destination, in large part due to the decline in Maui bookings.
Tourism providers are hopeful that a strong festive season will jump-start Maui’s recovery, but stakeholders are concerned that many tour operators, hotels and restaurants that depend on visitors won’t be able to hold out much longer.
ASTA takes on AA
In April, American Airlines made good on its pledge to make some content available exclusively to travel agencies that book through NDC connections.
ASTA was not happy.
The Society drafted a complaint with the DOT contending that restricting content to NDC connections was anticompetitive and harmful to consumers and travel agencies.
But American was undeterred. By midsummer, the carrier had pulled about 40% of its content from the GDSs, despite pushback from corporate and leisure travel agencies that did not yet have NDC capabilities.
ASTA doubled down, requesting not only that American restore all fares to GDS channels but that the carrier divest slots at Washington Reagan National and New York’s JFK and LaGuardia airports “to restore meaningful levels of competition” in those markets.
ASTA reflects a frustrated trade: Almost 60% of respondents to Travel Weekly’s annual Travel Industry Survey said agencies have not had sufficient time to prepare for NDC. And while the survey also found that agencies with access to an NDC booking channel jumped from 3% in 2021 to 22% this year, TMCs account for just 2% of NDC tickets, and of the leisure agencies that account for the rest, 96% are OTAs, according to ARC.
The ASTA list
In late August, ASTA published a list of suppliers it says pay advisor commission in a timely manner, or within 30 days of a final payment made in full.
The list included Goway Travel, the Globus family of brands and most cruise lines.
The call for early commission payment reached fever pitch during the height of the pandemic, when travel essentially ceased and advisors spent most of their days rebooking trips, sometimes multiple times over, with no compensation until their clients’ travel was completed. In many cases, that could be a year or two later.
ASTA said its list was designed “to champion companies that do more to recognize the contributions of the travel advisor community.”
The need for the list highlighted that travel advisors are very often compensated long after their work is done. That’s part of the reason why the Society has pushed its members to adopt service fees, and this year’s Travel Industry Survey found that 30% of respondents had started implementing fees within the last 12 months.
By making its list public, ASTA and its members hope that more suppliers will take steps to be on it.
A not-so-magical year for Disney
Disney may be the happiest place on Earth, but for a stretch of 2023 even the mouse appeared miffed.
Last spring, Florida Gov. Ron DeSantis took control away from the Disney-appointed board that governs the taxing district for Walt Disney World Resort after Disney voiced opposition to Florida’s so-called Don’t Say Gay law. DeSantis and Disney CEO Bob Iger traded barbs, with the former calling Disney a “woke” corporation and the latter responding that “we’re merely exercising our right to free speech. Does the state want us to invest more, employ more people and pay more taxes, or not?” Making good on that threat, Disney canceled plans for a campus near Disney World that would have housed 2,000 employees relocated from California.
Disney made headlines on another front, as well. Just over a year after opening the much-hyped Star Wars: Galactic Starcruiser hotel at Walt Disney World, the property closed in September. Plagued by rumors of flagging demand due mostly to its steep pricing — around $6,000 for a two-night stay for a family of four — the closure coincided with softening demand at Disney World last summer, coming off pandemic peaks.
But a Disney ending is never sad. In September, the company revealed ambitious plans to put $60 billion into its parks, experiences and products over the next decade, nearly doubling what it spent on its parks in the previous 10 years.
At the end of 2022, Travel Weekly noted that agencies had not only recovered from the pandemic but were thriving, creating a problem they could have only dreamed of in the throes of Covid: being overwhelmed with demand.
It’s a problem that only grew in 2023.
The need for advisors this year was higher than ever as consumers began traveling voraciously and looked to advisors for help. Travel Institute president Diane Petras said in June that she was concerned there could be a shortage of adequately trained advisors lasting into the next decade.
Everyone from ASTA to the largest consortia spent much of this year looking to find, hire and train advisors, with recruitment and educational initiatives becoming an industrywide priority.
ASTA CEO Zane Kerby said in May that the Society would use a $250,000 donation from Norwegian Cruise Line to attract new talent. In June Virtuoso launched the Virtuoso Advisor Recruitment Program, and the Gifted Travel Network purchased access to Lucia, a freelancer marketplace for the travel industry, for all of its members.
But success in hiring more agents has not solved the problem entirely, owing to a lack of programs to onboard them quickly.
Petras said the Travel Institute is on track to enroll 5,000 students this year, more than double its typical number. And with the “inordinate amount of new people” entering the industry, the institute plans to launch its first scholarships for advisors to enroll in Tripkit, its introductory-level training program, next year.
Junky resort fees
Resort fees have long irked consumers and inspired lawsuits over price transparency, but the issue gained unprecedented attention in 2023, thanks to the Biden administration’s promise to crack down on “junk fees.”
In March, two U.S. senators introduced the Junk Fee Prevention Act, which would require hotels and other short-term lodging providers to disclose the full price up front. In May, the Pennsylvania attorney general accused Marriott International of failure to comply with a 2021 settlement to “clearly and conspicuously list any mandatory fees at all steps during a consumer’s booking process.”
And in August, consumer advocacy group Travelers United initiated a class action against Hyatt Hotels Corp. alleging the company “has been systemically cheating consumers out of tens, if not hundreds, of millions of dollars each year by falsely advertising its hotel room rates.”
The issue proved divisive even within the industry, putting hotel associations such as the American Hotel and Lodging Association, which said the fees “provide guests with value and include various unique goods and services at each property that charges them,” at odds with ASTA, which said the fees violate the principle of transparency.
With the industry still feeling the impact of the Russia-Ukraine war months ahead of its second anniversary, fighting between Israel and Hamas broke out in October. And while the immediate impact seemed to be limited to cruises and tours in Israel, as the war continued, cancellations as far away as Dubai were blamed on the conflict, while river cruise operators said that Egypt bookings had slowed substantially.
As a result of Russia’s attack of Ukraine, the industry has for almost two years been offering Baltic itineraries without St. Petersburg, the region’s premier port of call. And while there were signs of an Eastern Europe rebound overall — many river cruise lines and tour operators are saying demand could return to prepandemic levels by 2024 — bookings in 2023 were still short of 2019 levels.
While many members of the industry predicted Israel fighting would be short-lived, as has been the case in the past, they did so with caution. As Vicki Freed, Royal Caribbean International’s senior vice president of sales, trade support and service said, recalling expectations when Russia first invaded Ukraine, “Who would have thought that this war would still be in existence?”
For what seemed like a very long week in June, the world could not look away from coverage of OceanGate’s Titan submersible, which lost contact with its support ship while on a dive to see the Titanic wreck on the ocean floor. It was ultimately found to have imploded, killing all five of its occupants, including OceanGate CEO Stockton Rush.
The tragedy thrust into the spotlight “extreme tourism,” travel that can put participants at great risk in order for them to go where few have been before, often at prices as extreme as the activity: Seats on the OceanGate submersible sold for $250,000 each.
While OceanGate may have prompted scrutiny of the dangers of this type of travel, it didn’t seem to stifle it: Just two months later, Virgin Galactic launched its first group of tourists into space on a rocket-powered plane where seats cost up to $450,000, and, according to Virgin, its wait list numbers 800.
JetBlue went into 2023 having successfully quashed Frontier’s plans to acquire Spirit Airlines by stepping in with a $3.8 billion offer of its own.
A year later, the carrier has experienced several setbacks, not only with that endeavor but also with the loss of its partnership with American Airlines in New York and Boston, commonly called the Northeast Alliance, after a judge ordered its dissolution this summer.
The federal court in Massachusetts sided with the Department of Justice and the states that sued to block the partnership as anticompetitive.
Despite the hit, JetBlue chose not to appeal, setting its sights on the Spirit acquisition, where it would again face off with the DOJ in court after the feds sued to block the deal, a trial that wrapped on Dec. 5. A judgement is pending.
American, meanwhile, did appeal the Northeast Alliance ruling in early December, a move aimed at establishing a right to enter into future partnerships similar in nature to its defunct partnership with JetBlue.
December also brought major news from Alaska and Hawaiian airlines, which entered into a merger agreement under which Alaska would purchase Hawaiian. Alaska said it would run the two carriers as one in most respects, including from a scheduling and crewing perspective. But it plans to continue flying the Hawaiian brand.
The airlines hope the DOJ will view this proposed merger more favorably than JetBlue-Spirit, in part because the two carriers only overlap on 12 routes.
Copyright 2023 Northstar Travel Media, LLC. All rights reserved. From https://www.travelweekly.com. By Johanna Jainchill.