Portfolio.com: Seat 2B

Rich Array of Airline, Hotel Deals

Tue, 21 Apr 2009 04:00:00 GMT

I spend an inordinate amount of time tracking airfares and hotel rates and say this without fear of contradiction: This is the best time in a decade to get a deal. Long haul or short, budget digs or palatial stays, leisure and business travel prices have reached comparative, historic lows.

In other words, time to watch your back. If you think buying travel is tricky when prices are high, you have no idea how complicated life on the road can be when prices are falling. The travel industry doesn't lower prices graciously or transparently. There are always trapdoors, tricks, and an endless parade of extras that can needlessly inflate your fares and room rates.

Consider what follows a cheat sheet to avoid getting tricked in the next few weeks and months. We'll revisit this topic as frequently as necessary to keep you abreast of this most extraordinary time in travel buying.

Buy Now, Check Later
Several carriers tried to raise fares over the weekend, their second failed attempt in as many weekends. (Airlines usually try to raise prices on weekends, when bookings are light, so they can rescind the increases by Monday morning if the lemming-like industry doesn't act in lockstep.) You can look at the attempted price hikes as delusional or an indication that at least some carriers see glimmers of hope for a summer traffic bump. Either way, chances are that we've reached a temporary floor in airfares, so now would be a good time to lock in summer flights.

With the requisite 60-day advance purchase and Saturday-night stay requirement, business-class fares to Europe are now as low as $1,798 roundtrip before taxes. That's just a few hundred dollars more than you'll pay for a coach seat on shorter notice later this year. Business-class fares to Latin America are falling too. Up-front fares to Asia remain high considering a rapid decline in traffic, but coach prices across the Pacific are lower than across the Atlantic on a fare-per-mile basis. And you can't complain much about domestic fares: We've already seen several $49-to-$99 fare wars. In fact, Virgin America, the struggling startup, has cut some transcontinental fares to as low as $79 one-way this spring.

Although I recommend you buy now, you should always double-check prices again before you travel. There are automated fare-watch programs—Yapta is a current favorite of price-obsessive fliers—but you can also do it yourself a few weeks before you fly. If you find a substantially lower fare, call the airline and get a voucher for the price difference, minus an admittedly hefty ticket-rewrite fee.

Beware Bogus BoGos
The low price of premium-class tickets has mooted the classic "buy one, get one" (BoGo) promotion, but that hasn't stopped carriers from trotting out the gimmick in hopes you're not paying attention. Earlier this year, for example, South African Airways offered one for coach travel, but the required "buy one" price was just $100 less than if you had purchased two tickets separately. Qantas ran a two-for-one sale on business-class seats last week, but its buy-one price was literally twice as much as competitors were charging for a single seat. Also rendered virtually useless in the current market: the much-heralded International Airline Program available with certain American Express cards. It will give you a free companion first- or business-class ticket when you buy one—but only if your purchase is at full fare, a price that is now often four or five times higher than the current sale rates freely available in the marketplace.

Added Value or Lower Prices
Never as monolithic as the airlines, the hotel industry is split on how to get heads back on beds. As room rates and occupancy levels have plummeted, some chains (most notably Hilton) have indulged in what the industry calls "naked discounting." That's when you simply slash nightly rates as low as required to fill a room. Other hotel players (like Marriott and many pricey resorts and independent properties) are trying to keep published rates high, but larding them with "value-added" freebies. Sometimes it's free meals or spa treatments, and sometimes it's several hundred dollars worth of resort "credits" that travelers can use as they wish. Other times, the value-added inducement is third-party gift cards. So far this year, for example, Marriott outposts have offered gift cards for Target and Amazon.com as part of the nightly room rate.

Which is better? Depends on you. I prefer the rate reduction because things like a free Sunday brunch "worth" $45 is useless to a guy whose morning intake is invariably a bagel and coffee. But if you like what the hotel is offering—and understand its actual retail value—go for it.

The Blind-Buying Bonanza
Blind bidding for flights is passé now that airlines publicly sell seats at giveaway prices on their own proprietary websites. But so-called "opaque" operations such as Priceline.com, Hotwire.com, and Lastminute.com have gained new popularity with upscale travelers because top-notch hotels around the world now dump their excess capacity into the blind-booking pools. Even four- and five-star properties work with the opaque sites these days, and they sell deeply discounted rooms to travelers who pony up payment before they know what hotel they are buying.

I'm not a fan of blind booking—to me, lodgings aren't a commodity—but many travelers whose taste I trust recently have secured huge discounts on desirable hotels and resorts using Hotwire and Priceline. And third-party sites such as Bidding for Travel have sprung up to allow bidders to swap intelligence on what they've scored and which properties currently use the opaque sites. There's still another twist on the bidding sites: Luxury Link electronically auctions accommodations and travel packages at deluxe properties around the world. I have used Luxury Link myself for holidays. If you know the property and what it normally charges, you can bid with confidence—assuming, of course, you want to travel when the hotel or resort is offering rooms.

The Mileage Markdown
Travel is so slow just now—airline traffic is down around 10 percent compared with last year's already depressed levels and average hotel occupancy has fallen to around 50 percent—that airlines and hotels have even begun to mark down the price of staying and flying for free via frequent-travel programs. A steady stream of private promotions offering flights for up to 25 percent fewer miles and hotel rooms for substantially fewer points has hit travelers' email inboxes in recent weeks. To take advantage of these private sales, make sure you're signed up to receive the promotional offers from your favorite airline and hotel programs.

And while we're talking about frequency programs, another point to keep in mind: If you're relatively flush with cash, airlines and hotels are offering lavish points and miles promotions when you book paid rooms and flights. After a two-night stay in a Manhattan hotel last month, I earned enough bonus points for a free night in an Italian resort I've been eyeing for a holiday next month. And all of the major airlines are currently running double or even triple "elite miles" promotions through mid-June. Once you register, you receive bonus miles toward your elite status next year. Earning or upgrading your elite status for 2010 will come in handy if the economy recovers next year.

The Fine Print…
One notable exception to the fire-sale nature of travel this year is car rentals. If anything, prices have risen compared with last year. The reason: Rental firms have been hit by the credit crunch and have had difficulty raising cash to finance new fleets. The result is a double whammy: Daily rates, especially for midweek business rentals in major cities, are rising—and the cars you're renting are older, have more cosmetic damage, and may not be as mechanically reliable as they once were.

Related Links
The Great Getaways
Bargain Bin
Lots of Room at the Inn

Two Years of 2B

Tue, 14 Apr 2009 04:00:00 GMT

This is the start of the third year that I metaphorically plop down in Seat 2B once a week and attempt to make sense of life for business travelers. And since no one deserves a free ride in a power chair, even if that chair is an airline seat, I think now is a good time to try to make sense of what has gone before.

But be warned: There are no overarching trends here. As is so often the case on the road, these last two years have been almost totally reactive: to insane swings in the price of fuel to the apparently endless cycle of boom-and-bust that dominates hotel development, and, of course, to the economic wave that has carried us from the relatively giddy times of April 2007 to our current…uh, well…to whatever it is we're living and working through.

Southwest's Steady Course
Even the nation's one financially sound U.S. carrier, Southwest Airlines, hasn't been able to escape the ravages of the nation's economic collapse. Its traffic is down about in line with industry-wide trends and it has taken the unprecedented step of trimming its overall capacity by 4 percent this year. And the airline's vaunted fuel-hedging strategy, which saved the carrier about $3.5 billion in the last decade, cost it money in the second half of 2008 as oil prices collapsed. But some things never change: Southwest is using the downturn to position itself as an alternative to the nation's mainline carriers. After decades of shunning some of the largest U.S. cities, it launched flights to Minneapolis last month, is scheduled to begin its first-ever flights into New York (via LaGuardia Airport) in June, and will serve Boston's Logan Airport in the fall.

United's Inexorable Decline
It's gone from worst to even worse than that at United Airlines, the most troubled of the nation's so-called "legacy" carriers. Once the nation's largest airline, United is hemorrhaging after a bungled mega-bankruptcy and years of management missteps. About 40 percent of what flies as United Airlines is subcontracted to regional airlines and much of the remaining service is actually code-share operations with its international partners in the Star Alliance. Every one of its union contracts becomes "amendable" next year (airline contracts never technically expire). Compared with the other legacy carriers, its cash reserves are small and there are few unencumbered assets to hock. And early next year, it will have to discuss cash-draining "holdbacks" with JP Morgan Chase, its credit-card processor. Operationally, there's no good news, either, since its once-profitable service to the Pacific Rim is deteriorating rapidly due to plunging yields to Asia and fresh competition on its Australia routes.

Fate of the Fourth Class
The worldwide collapse of premium-class traffic since last fall has had the expected effect: Airlines have stepped up their discounting in business class and more carriers are adding a fourth class, which is rather generically known as "premium economy." The discounting trend is both structurally strategic—the airlines now offer a range of discounts from three to 60 days before departure—and tantalizingly tactical, with sale fares slashing as much as 75 percent off the price of international business class. As for premium economy, Air France added the new cabin on three premier routes (from Paris to New York, Tokyo, and Osaka). But the fate of fourth class is far from secure. Even as Air France was debuting, OpenSkies, British Airways' boutique carrier, was renaming its fourth cabin as the "biz seat." The reason? Premium economy still exists in a computer-coded limbo, which makes selling it via the airline industry's omnipresent global reservation services difficult.

The Banking Blues and London Rediscovered
If I've been at all prescient in the last two years, it was the Run on the Bankers column that posted shortly after Lehman Brothers tanked last September. Exactly in line with the meltdown of the markets, bankers stopped flying, and that has caused the calamitous decline in premium-class airline revenue. It's been especially tough on British Airways, which is disproportionately dependent on premium flying on the NyLon (New York-London) route. And there's no doubt that BA (and London) are still suffering a year on from the disastrous opening weeks of Terminal 5 at Heathrow Airport in March 2008. The good news for those of us who love London? The British capital is cheap again for upscale American visitors, thanks to massive airfare and hotel discounts and the precipitous decline of the value of the British pound.

Counterintuitive Currency
Just before the world's economies shuddered, the U.S. dollar was at an unconscionable, unaffordable low ebb. But for reasons known only to the masters of the universe, the U.S. dollar has gained strength against almost all of the world's currencies as the American economy weakened. If you've got any discretionary income left, this will be a great summer to travel virtually anywhere in the world. The dollar is buying 20 to 50 percent more than last spring and summer. The only exception: Japan, where the dollar continues to languish at or below the 100-yen mark.

A Fee By Any Other Name
Still, it isn't all bread and dollar-denominated chocolates overseas. Banks and other financial institutions continue to raise the fees they charge when you use your ATM or credit card outside of the United States. The latest trick: Currency-exchange fees of 3 percent or more even if you use your own bank's ATM card to make a withdrawal from your own account at an overseas ATM owned and operated by said bank. Even financial institutions that continue to advertise fee-free ATM usage are adopting the currency gambit. One example: Charles Schwab Bank, whose print ads promise in big, bold type that there are "No ATM fees—we rebate all ATM fees from any ATM. Period." But as Schwab's fine print makes clear, "ATM free rebates do not include currency exchange fees or other fees." Some of the few truly fee-free ports in the storm are the credit cards and ATM cards issued by Capital One.

The Fine Print…
Allow me to end this column where I began in April 2007: I still believe the single best investment you can make in your on-the-road comfort and productivity is Priority Pass, the worldwide airport-lounge access program. The fees haven't changed, but the lounge network has grown by 20 percent, to more than 600 clubs in 300 cities.

Related Links
The Business-Travel Blues
Flying Fourth Class
The Commuter Conundrum

The Security Swamp

Tue, 07 Apr 2009 04:00:00 GMT

The name on my passport, my preferred form of travel identification, is Joseph Angelo Brancatelli. I was born on May 22, 1953. And I am a male.

I tell you these admittedly prosaic bits of personal trivia because I want you to know that I am not against giving this information to the Transportation Security Administration (TSA). And if you want to fly, you, too, will soon be required to disclose this data to the TSA, the lumbering, leaderless, secretive bureaucracy that has spent the years since 9/11 alternately keeping us safe and infuriating us.

Secure Flight, the official name of this latest bit of data mining by the federal bureaucracy with the power over your freedom of movement, kicked in last week in typical TSA style: suddenly, with virtually no public discussion and even fewer details about its implementation. According to the agency's press release, which is buried half-a-dozen clicks deep on the TSA website, Secure Flight is now operative on four airlines. Which airlines? The TSA won't say. When will Secure Flight be extended to other carriers? Sometime in the next year, but the agency won't publicly disclose a timeline or discuss the whys, wherefores, and practical details.

Before we can even discuss why a federal agency needs to know when you were born before it permits you to fly, let's back up and explain the security swamp that the TSA has created.

Born in haste after 9/11, the TSA was specifically tasked by Congress to assume overall authority for airport security and pre-flight passenger screening. Before that, airlines were required to oversee security checkpoints, and carriers farmed out the job to rent-a-cop agencies. Their work was shoddy, and the minimum-wage screeners were often untrained.

Despite some birthing pains and well-publicized missteps, the TSA eventually got a more professional crew of 40,000 or so screeners working the checkpoints. Generally speaking, the checkpoint experience is more professional and courteous now, if not actually more secure. In fact, despite rigorous employee training and billions of dollars spent on new technology, random tests show that TSA screeners miss as much contraband as their minimum-wage, rent-a-cop predecessors.

But the TSA's mission wasn't just passenger checkpoints. Congress asked the new agency to screen all cargo traveling on passenger jets. (The TSA has resisted the mandate and still doesn't screen all cargo.) Congress also empowered the TSA to oversee a private "trusted traveler" program that would speed the journey of frequent fliers who voluntarily submitted to invasive background checks. (The TSA has all but killed trusted traveler, which morphed into inconsequential "registered traveler" programs like Clear.)

Most important of all perhaps, both Congress and the 9/11 Commission wanted the TSA to get a handle on "watch lists" and other government data programs aimed at identifying potential terrorists before they flew. And nowhere has the agency been more ham-fisted than in the information arena.

The TSA's first attempt to corral data, CAPPS II, was an operational and Constitutional nightmare. The Orwellian scheme envisioned travelers being profiled with huge amounts of sensitive private data—credit records, for example—that the government would store indefinitely. Everyone—privacy advocates, airlines, airports, civil libertarians and certainly travelers—hated CAPPS II. The TSA grudgingly killed the plan in 2004 after some high-profile data-handling gaffes made its implementation a political impossibility.

While this security kabuki was playing out, the number and size of government watch lists of potential terrorists ballooned. Current estimates say there are as many as a million entries on the various lists, although the TSA argues that only a few thousand actual people are suspect.

But how do you reconcile the blizzard of watch-list names—some as common as Nelson, which has been a hassle for singer/actor David Nelson of Ozzie & Harriet TV fame—with the actual bad guys who are threats to aviation?

Enter Secure Flight, a stripped-down version of CAPPS II. The TSA's theory: If passengers submit their exact names, dates of birth, and their gender when they make reservations, the agency could proactively separate the terrorist Nelsons from the television Nelsons, and guarantee that the average Joe—or, in my case, the average Joseph Angelo—won't be fingered as a potential troublemaker.

Theoretically, giving the TSA that basic information seems logical enough. But the logistics are something else again: Airline websites and reservations systems, third-party travel agencies, and the GDS (global distribution system) computers that power those ticketing engines haven't been programmed to gather birthday and gender data. And Secure Flight's insistence that the name on a ticket exactly match the name on a traveler's identification is also problematic: Fliers often use several kinds of ID that do not always have exactly the same name. (Does your driver's license and passport have exactly the same name on it?) Many travelers have existing airline profiles and frequent-flier program membership under names that do not exactly match the one on their IDs.

Another fly in the Secure Flight ointment: While the TSA is assuming the watch list functions from the airlines, the carriers will still be required to gather the name, birth date, and gender information and transmit it to the agency. Meshing the airline computers with the TSA systems has been troublesome in the past and, from the outside, it looks like very little planning has been done to ensure that Secure Flight runs smoothly.

The TSA "announced this thing in 2005 and, as usual, they announced it without considering practical realities," one airline executive told me last week. "And any time you deal with the government on stuff like this, it's a nightmare."

What can you do about all of this? For now, very little. Settle on a single form of identification for all travel purposes and make sure that you use that name exactly when making reservations. Check that the name that airlines have for you—on preference profiles, frequent-flier programs, airport club memberships, etc.—matches the name on your chosen form of identification.

Then wait for that glorious day when the TSA solemnly and suddenly, and almost assuredly without advance warning, decides that Secure Flight is in effect across the nation's airline system.

The Fine Print…
You may wonder why I haven't asked anyone from the Transportation Security Administration to comment on Secure Flight. The reason is simple: No one is really in charge of the agency. The Bush-era administrator, Kip Hawley, left with the previous president and the Obama Administration has yet to name his successor. Everyone, from acting administrator Gale Rossides on down, is a Bush holdover. And no one seems to know what President Obama or Homeland Security Secretary Janet Napolitano thinks about the TSA, Secure Flight, or any airline-security issue.

Related Links
Under the Radar
An Airline That Made Money?
Europe Investigates Trans-Atlantic Airlines

State of Independence

Tue, 31 Mar 2009 04:00:00 GMT

The moment I first laid eyes on the Greenbrier Resort in 2004, I blurted out what I thought was an incredibly obvious observation: "This," I said about the 6,500-acre, 720-room hideaway in rural West Virginia, "will make a great Marriott one day."

My guide, who worked for an outside PR firm hired to revive the resort's flagging reputation, was aghast. She gamely protested the accuracy of my first impression and insisted the Greenbrier was above the unabashedly commercial, cookie-cutter nature of chain hostelries. But as I wandered around still-icy golf courses, inspected florid guestrooms and outdated public areas, and noted archaic house rules (the only dining room required a jacket and tie), I was convinced that the Greenbrier would never survive as an independent.

Well, the 230-year-old lodging icon has succumbed. The owner, railroad company CSX Corp., put the Greenbrier into Chapter XI bankruptcy in late March, claiming $90 million in losses during the last six years. And CSX promptly called in—you guessed it—Marriott. CSX is so desperate to unload the hotel that it will provide Marriott with as much as $50 million to operate the Greenbrier during the first two years. Marriott will then buy the resort within seven years for between $60 million and $110 million. Pending bankruptcy court approval, the deal could close by summer.

Now, no one is aghast at the prospect of a chain running the Greenbrier. The unions seem amenable to Marriott's arrival. West Virginia governor Joe Manchin publicly applauded the deal. Newspapers statewide have cast Marriott's arrival as a "rescue." And locals in hardscrabble Greenbrier County support anything that will save the resort's approximately 1,300 jobs.

Like all luxury hotels that have hit the economic and emotional skids, the Greenbrier's tale is unique: CSX has been a distracted and ham-fisted owner, battling both the hotel's unions and the resort's former president, who sued for $50 million. The sprawling resort is physically isolated and expensive to operate. (CSX recently spent $50 million on improvements in a misguided attempt to regain the fifth Mobil Guide star it lost in 2000.) And despite the loyalty of generations of repeat visitors and fanatic golfers, the Greenbrier was disproportionately dependent on corporate meetings, a travel category that has been devastated by the weak economy and the "AIG Effect."

But the Greenbrier's sale to Marriott also raises a more universal question: Can any luxury hotel or resort thrive—or even survive—as an independent property? In a world where a handful of global hotel chains—Hilton, Marriott, Starwood, Hyatt, Accor of France, and InterContinental of Britain—dominate the lodging market, can a single property, no matter how famous, stand alone?

At least on the surface, the answer is no. About half of the properties on the Condé Nast Traveler Gold List and half of those that earn the prestigious five-star rating from the Mobil Guide are part of chains now, albeit luxury and ultra-deluxe operators such as Four Seasons or Fairmont of Canada; Mandarin Oriental and Peninsula of Hong Kong; Aman Resorts of Singapore; and Taj of India. The Blackstone Group, which owns many of the world's best-known luxury independents as well as Hilton Hotels, is building a deluxe brand too. It is aligning its independents like the Boca Raton Resort in Florida and the Boulders in Arizona with the Waldorf Astoria Collection, which was created by Hilton using the cachet of its eponymous New York hotel.

Other luxury brands have huge corporate parents too. St. Regis is owned by Starwood, best know for its Westin, W and Sheraton hotels. Ritz-Carlton is owned by Marriott. And some luxury hotels you may think of as independent are actually part of a chain. The Plaza in New York, which reopened last year, is managed by Fairmont. The Pierre, which reopens in New York this spring, is operated by Taj. The newly renovated Mauna Kea Beach Hotel on the Big Island of Hawaii is run by Prince Hotels of Japan. The Dorchester in London? It's part of the Dorchester Group, which is aligned with the Beverly Hills hotel, the Plaza Athenee in Paris, and the Principe di Savoia in Milan.

"Chains always outperform" independent hotels, says LodgeWorks' Tony Isaac, a man who knows the industry from both sides of the fence. LodgeWorks manages hotels in the Hyatt and Hilton chains, helped create the Residence Inn brand (now owned by Marriott), and is building its own Hotel Sierra chain.

But Isaac has just built an upscale independent hotel too. The Avia opened in January in Savannah and was promptly named a great romantic getaway by Travel & Leisure magazine. Why does a guy who admits chains outperform independents go ahead and open an independent anyway?

"Chains add about 10 points to your occupancy rate. But if you're part of a chain, you pay 12 to 14 percent for the frequent guest plan, the reservation service, and other brand programs," he explains. "If you're in the right market, it's not too much of an economic disadvantage to be an independent—and then you have the flexibility to do what you wish and manage as you choose."

That's the argument made by Sean Hehir, managing director of Trinity Investments, a real estate firm that purchased Honolulu's iconic Kahala Resort in 2006. The beachfront property opened as a Hilton hotel in 1964 and spent most of its recent history as a Mandarin Oriental. But Hehir believes the Kahala has unique advantages that appeal to the luxury traveler who isn't interested in brands.

"We're not subject to a brand policy that may not have any relevance to a particular property," he says. "We manage for the long-term best interest of us as owners and the luxury travelers as guests."

But even Hehir admits you need the right combination of factors to survive as an independent in today's chain-dominated world. In the Kahala's case, it's the unbeatable location on a sandy beach in Honolulu's choicest neighborhood and the fact that another Trinity principal, Chuck Sweeney, has a long history as a hotel manager. (Sweeney founded the company that became Embassy Suites, now a Hilton brand.)

For James Bermingham, managing director of the spectacular Montage Resort in Laguna Beach, the advantage is a laser-like concentration on guest services and proximity to wealthy, sophisticated travelers in Southern California. Both the five-year-old Laguna Beach property and the new Montage in Beverly Hills (it opened last fall) can tap into millions of upmarket buyers within 60 miles of the resorts.

"The 'staycation' trend helps Montage," he says. "Guests who want an extraordinary luxury experience very close to home see the Montage properties and they know they won't be getting a chain hotel."

The Fine Print…
Most observers think fewer luxury hotels will still be independent after the current recession, but there is a notable dissenter. Michael Matthews, who has been the general manager of top-notch chain hotels (the Ritz-Carlton in Hong Kong) and independent deluxe resorts (the Ventana Inn in Big Sur) thinks high costs will drive some luxury properties out of the major chains. "If you're 'flagged' as a chain, you have no independence at all," he says. "A lot of hotels will drop the flag and take the 14 percent fees they pay and use that money to do what they think makes most sense for their own hotel."

Related Links
Starwood Fights Hilton Over Zen
Bargain Bin
Heartbreak Hotels

Detroit's Hotel Doldrums

Tue, 24 Mar 2009 04:00:00 GMT

Just before a glittering new terminal opened at Detroit Metro Airport seven years ago, I flew out for an airport-arranged private tour. Then I drove downtown for my own self-guided view of the seamier side of Detroit's travel infrastructure.

Four of the city's once-famous deluxe hotels were ornate tombs, abandoned for decades and facing the wrecker's ball. Two starkly modern properties built in the 1960s were shabby and sorely in need of new ownership. Even the 73-story hotel in the Renaissance Center, opened in the late 1970s as part of a massive urban-renewal project, was dreary and depressing.

"TERRIBLE!" I scribbled in my notebook in 2002. "Someone should fix."

And fix they did. The Madison-Lenox and the Detroit Statler were demolished, but the Book Cadillac and the Fort Shelby received hundreds of millions of dollars worth of renovations and restorations. The Book, as locals call it, reopened to raves in October and the Fort Shelby came back to life two months later. One of the 1960s icons, the St. Regis, became a spiffy boutique property. The other, the Hotel Pontchartrain, was recently renovated and is now called the Riverside. The cylindrical skyscraper hotel at the Ren Center? It's a Marriott now, and it sparkles. And the city's three casinos have each opened upscale hotels with Vegas-style perks and amenities.

But this is Detroit, where hotel happy endings are always the start of the next lodging nightmare. If anything, the Motor City's hotel scene is in worse shape today than seven years ago.

More than half of Detroit's estimated 40,000 guestrooms are empty, and PKF Hospitality Research says lodging demand will fall further this year. The St. Regis is in receivership. The Riverside has been picketed by employees who say they haven't been paid, and the Detroit News says the hotel owes almost $700,000 in back taxes. One of the casinos is in bankruptcy and another is for sale. Only a handful of buyers have closed on the dozens of pricey condos atop the Book Cadillac. The Fort Shelby's new rental apartments are mostly empty too. And Detroit's revpar (revenue per available room), the key measure of financial health in the lodging industry, is one-third lower than the national average.

"The statistics are scary," admits Shannon Dunavent, general manager of the Doubletree Guest Suites hotel that was lovingly carved out of the carcass of the Fort Shelby. "I've been working in Michigan for 20 years and I won't lie to you. There's no new business in the market. We're all trying to steal from the other guy to survive."

It doesn't take a genius to figure out what's ailing Motown's hotels: The automotive business has been careening downhill for decades. Detroit has never been able to replace cars, and the thousands of related businesses that depend on the carmakers, as the city's economic engine. Hell, even Motown Records moved to Hollywood almost 40 years ago.

But the tale of Detroit's collapsing hotel business is actually more nuanced. It's a story of no good deed going unpunished, of every clever urban-renewal idea having an unintended consequence, and everyone missing the hotel forest for the restored trees of an earlier era.

As Detroit emptied out—the city's population of 900,000 is about half its mid-1950s high—so did the need for much of the city's older hotel infrastructure. The luxury lodging business moved to upscale suburbs like Dearborn and Birmingham. A slew of focused-service hotels popped up in office parks and other business areas outside the deteriorating city core. Fliers who connect in Detroit via Northwest Airlines' large hub at Detroit Metro are well-served by an upmarket Westin hotel that opened adjacent to the new terminal.

During the last decade, even with icons like the Book and the Fort Shelby closed and the casino hotels still on the drawing boards, hotel occupancy rarely surpassed the 60 percent mark. And though there were occasional spikes of demand around special events—the city is sold out for college basketball's Final Four next month—there was never any indication that Detroit needed more rooms.

"This has always been about urban renewal and politics more than market forces," one hotel executive told me last week. "You can admire the drive and the commitment to rebuild Detroit, but there was a lot of 'If we build it, they will come,' thinking. We built. Guests haven't come."

The three casino hotels—each mandated by the terms of their gaming license, each around 400 rooms, and each opened in the last 18 months—flooded the city with new supply. The restoration of the Book Cadillac and Fort Shelby is another example of Detroit's mind over market.

The city's tallest building and the tallest hotel in the world when it opened in 1924, the 33-story neo-Renaissance Book remains a much-loved symbol of Detroit's boom times. But as a business, the 1,100-room property was always a loser. After the war, it changed owners and hotel flags frequently and finally closed in 1984. Over the next 20 years, the city, state, hotel chains, and developers all floated and abandoned restorations plans.

The $200 million project that finally started in 2006 and culminated with a headline-grabbing gala reopening party last fall converted the Book into a 455-room Westin hotel and a residential condo complex. Both projects have been lauded for their design and creative repurposing of the Book's stately shell, but the hotel has been forced to discount rooms to as low as $99 a night.

If anything, the revival of the 23-story Beaux-arts Fort Shelby was even more unlikely. It closed in 1974 and trees sprouted in the derelict building. A $90 million restoration project began in 2007 did wonders for downtown Detroit's streetscape, if not hotel occupancy. Along with 56 apartment rentals, the building now houses conference space, restaurants, and 204 hotel suites. The smallest guestroom is 600 square feet and Dunavent, the Doubletree's general manager, says weekend rates are as low as $89 a night.

"I'm proud of what we've done," she says. "If I can get you here, I know you'll have a great experience."

Detroit Marriott general manager Bob Farmery echoes Dunavent's comments. All he wants is for guests to experience his reinvigorated property. Marriott and the tower's owner, General Motors, have poured more than $150 million into the project since Marriott assumed management of the 1,300 guest rooms in 1998.

Ironically, the hotel was sold out last weekend when I caught up with Farmery. It was hosting college hockey's Final Four and another large group. And Farmery believes Detroit can wake from its lodging nightmare. He thinks the city can profit from the AIG Effect that has forced major corporations to cancel pricey meetings in eyebrow-raising resorts like Las Vegas and Hawaii.

"Our product is terrific and our rates are low," he says. "And nobody will criticize you if you hold a meeting in Detroit."

The Fine Print…
The Doubletree Guest Suites in the Fort Shelby represents the first full-service Hilton hotel in downtown Detroit in more than 30 years. The chain returned to the market in 2004 when the Ferchill Group, which also redeveloped the Book Cadillac, opened a limited-service Hilton Garden Inn in the Harmonie Park neighborhood.

Related Links
Starwood Fights Hilton Over Zen
Heartbreak Hotels
Wake-Up Call

The Business-Travel Blues

Tue, 17 Mar 2009 04:00:00 GMT

With a sharp drop in demand for premium-class seats and a long-term decline in airline revenue, global commercial aviation may be getting a permanent makeover. Things we take for granted today—relatively frequent flights for frequent business travelers and cheap coach travel for vacationers—could disappear. At a minimum, there's sure to be another round of convulsions in the low-margin, capital-intensive airline industry.

Before we discuss the future, understand the present. The trade group IATA is tracking the decline of premium-class travel and the trend is alarming. What started as a leak—a 1.5 percent drop last August—is now a full-on crisis,with January year-over-year premium revenue tumbling 16.7 percent. And since the first quarter of every year is historically a miserable time for premium travel, airlines are likely to report dreary numbers for at least the next few months.

The short-term economic impact of declining first- and business-class travel comes with some happy little benefits for those of us who dip into our wallets (or our company's budgets) to fly in the front of the metaphoric bus. Prices up front plummet. Elite travelers who pay to sit in coach on domestic flights suddenly find themselves upgraded to first class with delightful regularity. And the frugal flier finally gets to cash his frequent-flier program credits.

But long term, the implications are ominous because most airlines are dangerously dependent on a precious few up-front fliers to balance their balance sheets. Estimates vary by airline and route, of course, but as much as half of a carrier's total revenue is generated by premium fliers—and they represent fewer than 20 percent of the passenger count.

Consider this extreme example: A walk-up business-class ticket on the so-called Nylon route between New York and London costs $11,700 roundtrip. (Transpacific flights in business class can command $20,000 roundtrip and first class can cost upward of $30,000.) Few pay walk-up prices, of course, and most premium Nylon fliers are corporate types on negotiated discounts with fares of around $5,000 roundtrip. By contrast, a coach ticket on the route can cost as little as $500 roundtrip. So every time a single premium-class flier goes missing, an airline flying the Nylon route has to find upward of 10 coach travelers to replicate the revenue.

As the IATA numbers show, premium-class fliers are beginning to disappear. Some have temporarily stopped flying as the global recession lessens the need for travel. Others have been asked or commanded by their employers to move back to coach for the duration. Most worrisome for airlines, however, is the historical reality: Every financial downturn has led to a permanent decline in the number of up-front fliers.

After the first Gulf War, enough premium-class fliers disappeared forever that many international carriers—including Continental, Delta, Northwest, US Airways, Alitalia, KLM, and SAS—scrapped their first-class cabins. On domestic flights, airlines severely degraded their up-front offerings. After 9/11, still more premium fliers went away and airlines switched to smaller planes, reducing the size of premium-class cabins internationally and eliminating first-class seating on routes switched to regional jets. (These smaller planes now account for 20 to 85 percent of the traffic at the nation's 40 largest airports.)

Each recession has also led to tougher corporate rules for so-called "entitled travelers." Firms that once permitted domestic first-class travel for routes longer than three hours forbade it on all but transcontinental routes, then eliminated the perk completely. Companies that once permitted international business-class travel on routes of six hours or longer widened the window to eight, 10, or 12 hours. More than a few now require coach travel even on the longest transpacific flights.

So what happens if another sizable proportion of business travel disappears forever? Not all of the airline executives I've talked to in recent weeks agree—and none would even talk for the record—but they made some predictions based on previous experience and the current warning signs.

Fewer frequencies on the most popular routes. The cheapest, easiest, and least painful (at least for the airlines) way to cope with a long-term decline of premium-class revenue is to ground aircraft and offer less frequency on routes that offer multiple flights each day. That's already happened to some degree as domestic carriers cut about 10 percent of their flights after last Labor Day. An international cutback seems inevitable. Last week, Delta Air Lines, which aggressively expanded its overseas network in the last four years, announced it would slash about 10 percent of its international service in the fall.

Fewer nonstops on less popular routes. Many cities still connected by nonstop flights today will lose their service. As premium-priced business travel falls, the airlines have less incentive to fly those routes directly. They'll force travelers to connect via hubs, where the carriers can "collect" passengers from several cities and then reroute them in bulk to their final destinations.

Fewer premium-class seats. Airlines are loath to reconfigure their planes because it is costly, but a permanent decline in premium-class travel will require a change in aircraft "geography." Airlines will rip out unsold premium seats and replace them with more coach chairs. US Airways recently reconfigured its domestic fleet with fewer first-class seats, and United Airlines' long-overdue upgrade of its international aircraft will result in 20 percent fewer premium-class seats.

Fewer carriers and more alliances. Each recession has taken its toll on the roster of traditional carriers. The first Gulf War claimed Pan Am, Eastern Airlines, and the original Midway Airlines. After 9/11, a slew of smaller domestic carriers and several well-known international airlines (notably Swissair and Sabena) tanked. Several large carriers will surely disappear after this recession. The surviving airlines will seek alliances to share the remaining revenue. In fact, the skies are already full of carriers who put their computer code on flights actually operated by putative competitors.

Fewer multi-class airlines. The only truly healthy domestic carrier is Southwest Airlines, which offers a one-class-fits-all approach to travel. Internationally, the totally à la carte Ryanair is growing fastest. Logic dictates that more airlines will try to make money with a single class or duplicate the efforts of JetBlue Airways (decent legroom and amenities for all fliers and extra legroom in the same cabin for travelers willing to pay a little more) or AirTran Airways, which sells an inexpensive and stripped-down business class.

Higher fares for vacationers. A reduction in the number of premium-class fliers will mean fewer flights overall. Fewer flights means fewer seats in coach and, ironically, higher prices for leisure travelers, who have reaped lower fares because airlines kept adding flights to give premium-class fliers the frequency they were paying for.

A fundamental restructuring of premium-class service. With fewer premium-class fliers around, airlines will respond by lowering premium-class fares, either because they choose to change their fare structure or are forced to discount frequently. Both options mean less revenue per passenger, and that means less service. Although in-flight amenities like lavish food-and-beverage services are marginal costs, expect less pricey presentations and offerings. And one executive at a trend-setting international airline said his carrier was already considering renaming its business class and reclassifying it as "Y," the airline industry's computer code for full-fare coach.

"A lot of companies simply won't accept 'J' [industry code for business class] on the ticket anymore and they don't want to hear the words premium or business class," he told me. "So I might as well strip the service down to a comfortable seat and a simple meal, code it Y and come up with a less fancy name. Because I have a feeling I won't be getting the revenue I used to be getting."

The Fine Print…
Although the recession is hurting premium-class revenue across the board, airline executives say certain routes are suffering more than others. New York-London flights have been devastated by the decline in the banking sector. Flights to China and India are weak, too, as the demand for manufactured goods falls. And premium-class revenue to the Middle East is in free fall as those countries slash their development in the face of declining oil prices and revenue.

The Great Getaways

Tue, 10 Mar 2009 04:00:00 GMT

What this financial and economic crisis needs is a good aphorism, so let me try my hand at crafting one: When the going gets tough, the tough look at the amazing travel bargains out there and plan a vacation.

Okay, okay, I admit that one won't make Bartlett's Familiar Quotations, but the sentiment holds true. Thanks to an amazing confluence of factors, almost all of them related to our current parlous business climate, now is the time to take a vacation. Prices are approaching almost inconceivable lows, especially for premium-class air travel and deluxe hotels.

So let's put aside business travel for a week and focus on 10 great places to take a vacation right now. Would it kill you to take a holiday? After all, the crisis will still be here when you get back. And you'll be tanned and rested and ready to tackle the bad news with renewed vigor.

Hawaii
Seven consecutive months of double-digit declines in visitor arrivals has sent the islands into a panic. So has the AIG Effect, which apparently includes any resort with the word Hawaii in the name. One example: Wells Fargo cancelled a total of 11,000 room nights in May at the Hilton Hawaiian Village, an upmarket, but hardly deluxe, resort. The result? Deep discounts for travelers willing to pay cash and sizable reductions in the number of frequent-guest points that major hotel chains require for free nights. Airlines are slashing fares too. United Airlines, the largest carrier to Hawaii, is offering roundtrips for about $400 from the West Coast and about $600 from the East Coast.

London
The collapse of the financial markets has hit London hard. Hotel occupancy rates have dipped to the 70 percent range, and business-class cabins, once filled with bankers shuttling back and forth across the Atlantic, have emptied out. Then there are the vagaries of exchange rates: The British pound was commanding around $2.05 last summer, but it plunged to $1.40 over the weekend. Bottom line: London, the most popular overseas destination for American travelers even in pricey times, is now a huge bargain. British Airways' current London for Free promotion throws in two free nights in tourist-class hotels along with fares that start as low as $298 roundtrip before taxes. Summer business-class fares with an advance purchase have dropped below $2,000 roundtrip.

New York
London's twin in the financial-markets meltdown, New York, is suffering from the reverse of London's currency woes. As the dollar strengthens against the pound and the euro (which has fallen to about $1.28 from last summer's $1.60), Brits and Europeans find New York more expensive than it has been for years. That means Americans can afford to visit again as New York hotels discount lustily to offset the weak economy, the Wall Street crisis, and the disappearance of overseas visitors. Last year, travelers were paying $300 a night for a hotel and $500 for anything in the four-star category. Last month, I scored a suite with free breakfast at a big chain hotel for just $149 a night. Airfares? Over the weekend, JetBlue Airways launched a $99 one-way promotion on flights to New York from Southern California. Fares are higher from other places—but near or at post-9/11 lows.

China
Since consumption has tanked in the global recession, very few business travelers need to fly to China to buy goods from Chinese factories. The result? Empty planes and even emptier hotels, especially in Shanghai and Beijing, which overbuilt for the Summer Olympics. Alone among U.S. carriers, Continental Airlines launches a new nonstop service to Shanghai (from its Newark hub) later this month, and its introductory pricing set off a fare war. Flights to China can now be scored for as little as $800 roundtrip with a modest advance purchase. With overall hotel occupancy rates hovering around 50 percent in Beijing and Shanghai, bargains are everywhere. Room rates as low as $100 a night in newly built, four- and five-star properties with familiar Western brand names are common.

Phoenix/Scottsdale
The six-month-old W Hotel Scottsdale is the poster child for the excesses of building booms in places such as Arizona and Florida. The 225-room hotel came in over budget, a year late, and with unsellable condos in a market that already had too many resorts and vacation homes. Both the property's lender and its general contractor are trying to foreclose, and guestrooms with a published high-season rate of about $750 are selling for around $250 a night. And as was reported here over the weekend, resorts elsewhere are already renting rooms at summer low-season rates.

Florida
The travel equivalent of the neutron bomb has hit the tourist-dependant Sunshine State. Hotels and resorts are still standing, but visitors have disappeared. During the last week of February, the heart of Florida's winter high season, Smith Travel Research reported that year-over-year average daily room rates were down almost 15 percent in Miami, 13 percent in Orlando, and 11 percent in Tampa-St. Petersburg. It's anybody's guess what the rate structure will look like next month, when the "shoulder season" begins. Except for the Easter/Passover period, it'll probably be name-your-own-price.

Las Vegas
Sin City has become Pubic Enemy No. 1 among crusaders who rail against excessive corporate travel spending. Even President Obama recently called out Vegas. Everything I mentioned about Las Vegas in January is true now, except that the discounts have gotten better. And if you want to stay off the Strip, the sumptuous (but bankrupt) Ritz-Carlton Lake Las Vegas is selling rooms for as little as $219 a night, including breakfast for two and free parking.

Australia and New Zealand
Global bad times, a falling Australian dollar, and an untimely (for the airlines, at least) increase in flights make the land Down Under a standout vacation choice. Over the weekend, Qantas sent an email to travelers offering roundtrip coach flights to Sydney, Brisbane, or Melbourne for as little as $675 from Los Angeles or $875 from New York. United Airlines recently sold business-class seats for less than $5,000 roundtrip, which is about 75 percent lower than the previous going rate. And with the Australian dollar worth only about 65 cents against the greenback, lodging, dining, and other ground costs are a bargain. The same can be said for New Zealand, except that business-class airfares have always been lower than those to Australia and the New Zealand dollar is now worth less than 51 U.S. cents.

Lisbon
The 20 percent upswing in the U.S. dollar's value against the euro makes anywhere in the Eurozone a better bargain today than last year, but the cognoscenti have focused on Lisbon lately. Compared with other European capitals, Lisbon's marvelous dining scene is inexpensive, its lodging rates are lower, and its human-scaled, frozen-in-time city center isn't overrun with global retail chains. Coach fares to Lisbon are higher than to London, Paris, Madrid, or Munich, of course, but the summer business-class fare sales knock roundtrip prices down to about $2,200 from the East Coast.

The Fine Print…
A follow-up to my column about Lufthansa's unique First Class Terminal building at Frankfurt Airport: The German carrier has duplicated the building's services and amenities in a sybaritic new 13,000-square-foot lounge located inside Frankfurt's main terminal complex. It's part of a $190 million investment in clubs that Lufthansa is making at airports around the world. The airline recently opened lavish new lounges at New York's John F. Kennedy Airport, Washington's Dulles Airport, and Detroit/Metro Airport.Related Links
Bargain Bin
The Commuter Conundrum
The Business-Travel Blues

The Net(book) Effect

Tue, 03 Mar 2009 05:00:00 GMT

When I cracked the box on my $350 "netbook" computer, my inner geek cheered. I thought I could finally ditch the six-pound laptop behemoth weighing down my carry-on bag.

My frequent-flying wife looked at the little blue Acer Aspire One and dismissed it as nothing more than a larger BlackBerry. But when she realized that it weighed just two pounds and would fit easily in her pocketbook, she borrowed it for a two-night business trip. Her verdict: It was "pretty good" and "better than carrying a big laptop."

Several days later I took the netbook on a weekend trip. My fat fingers had trouble with the keyboard. The touchpad was atrocious. The built-in webcam and microphone helped me ace a few video conferences. The 8.9-inch display was sharp and clear, but the screen was too small to view documents without repeated scrolling. "It's a big BlackBerry," I grumbled.

And so it goes in the world of mobile computing. As the line between traditional laptop computers and smartphones blurs and new ideas like netbooks arrive, business travelers face a new series of choices about what to carry on the road.

Is a new generation of super-powered BlackBerry devices the future of on-the-road computing? Or is the iPhone our destiny? How big will portable computers be? How many of these things will we tote along with us every time we hit the road? Is the mythical "convergence" machine—one device that effortlessly and stylishly handles phone calls and computing tasks—on the horizon?

Questions, I got a million of them. Machines, almost as many. Answers, not so much.

"If you had the answers, you'd be the next Bill Gates," one long-time computer executive told me last week. "We're all struggling with devices, concepts, pricing, computing platforms. There are lots of cross-currents and no consensus."

In case you haven't shopped for a smartphone or mobile computer lately, let me give you the bullet points of how the market has changed:

Almost 15 million netbooks were sold last year, according to the research firm DataBank. If the concept of "netbook" is unfamiliar to you, consider DataBank's definition: They are machines that have "similar functions" to a laptop computer, but cost much less (below $650), weigh much less (under three pounds), and have smaller screens (seven to 10 inches) and smaller footprints.

An estimated 18 million iPhones have been sold since it went on sale in mid-2007 and Apple has redefined the feel and functionality of smartphones. BlackBerry has responded with an array of new phones, all with iPhone-like Web browsers and media players. The iPhone and Blackberry have spawned a dizzying collection of third-party "apps," many productive (budgeting and expense tracking), many fun (even PacMan lives on smartphones) and some just silly or tasteless (competing "fart joke" widgets for iPhone).

Google, the search behemoth, has built its own operating system, called Android, and released its first smartphone, the T-Mobile G1. A burst of new phones and laptops based on Android is expected to reach the market this year. "The platform of the future is Android. It's the pathway to doing more computing online," says Phil Baker, the columnist, author, and inventor of the folding travel keyboard.

Traditional laptops, losing sales to the cheaper, smaller netbooks, have nevertheless displaced desktop PCs as the computer of choice. Only one of Amazon.com's top 25 computing devices is a desktop; all the others are laptops or netbooks. And while the least-expensive laptops are specifically targeted as desktop replacements, a new generation of ultra-light, fully powered notebook systems like the HP EliteBook are vying for the top end of the market.

I admit that a lot of this jockeying has confused me. I traveled with an ultra-slim, three-pound notebook computer more than a decade ago and watched with horror as laptop manufacturers made their machines bigger and heavier in recent years. I didn't want to watch movies on a widescreen display, which added a few inches to the size of a laptop. I didn't want an onboard optical drive, which added weight. I wanted small, light, and mobile, and it seemed that laptop makers had forgotten that a portable computer was supposed to be portable.

I bought my first BlackBerry because I couldn't find a laptop small enough to carry everywhere. Last month I bought the Acer Aspire One on impulse because I was seduced by the small footprint (this one is 7-by-10-by-1 inches) and the light weight. And if it isn't the portable device of my dreams (I've added a mini-mouse and slowed my touch typing), it sure is a break for my aching, aging back as I schlep my carry-on bag through airports and hotels.

Of course, I'm never satisfied. I look at the iPhone and the BlackBerry and wonder why they can't do just a little more so I can ditch my laptop forever. I look at my six-pound laptop, now banished from my carry-on, and can't imagine that I ever accepted it as a "portable."

I look at my new netbook and I already think about buying one of the new models with a 10-inch screen. And while it flawlessly runs simple programs like word processing, email, and Web browsing, its low-powered processor and limited memory (mine has a fairly standard 1 gig) makes it infuriatingly slow for more complex tasks.

And where, I wonder, is my convergence machine, the one that makes calls flawlessly around the world, doubles as my music play, triples as a fully functioning portable computer and fits in my pocket?

Forget it, says Baker.

"One device will not be sufficient," he says. "We will continue to carry both a pocketable smartphone and a lightweight notebook for serious computing. Trying to combine both in a single device is like combining a toaster and microwave."

Don't get me started on toasters. I've been through three in the last two years and I still can't get my bagel toasted properly.

The Fine Print…
Here's some good news: A consortium of 17 cellphone manufacturers and cellular phone companies say they have agreed on a standard for a universal charger for mobile devices. A one-size-fits-all charger may be ready by 2012. The bad news? Neither Apple nor Research in Motion have signed on.

Related Links
What's Good for Apple is Better for Everyone Else
Big, Bold Moves
Bold Strike in the Smart Phone Wars

The Commuter Conundrum

Tue, 24 Feb 2009 05:00:00 GMT

Within minutes of Continental Connection Flight 3407's fatal crash on the night of February 12, frequent fliers were emailing each other, cursing commuter airlines, and vowing never to board smaller commercial aircraft again.

"I HATE THOSE TINY OLD RJS," one otherwise rational business traveler I know shouted in his email. "NOBODY SHOULD FLY THEM. THEY'RE NOT SAFE."

No matter that the aircraft involved in Flight 3407's fiery end six miles from Buffalo Niagara International Airport was not an "RJ," industry shorthand for regional jet. (It was a Q400, a twin-engine turboprop plane manufactured by Bombardier of Canada.) No matter that the 74-seat Q400 isn't particularly tiny. (At 107 feet long with a 93-foot wingspan, it is about the size of several early versions of Boeing's workhorse B737 jet and 20 feet longer than Bombardier's 50-seat regional jet.) And no matter that the Q400 isn't old. (The Q400 series didn't enter service until 2000 and the plane that crashed in Buffalo was less than a year old.)

Safe? That is most definitely in the eye of the beholder—and most business travelers eye commuter airlines with extreme trepidation. They don't like flying them. They don't like that the commuter lines wrap themselves in the colors and livery of the major airlines. And they are convinced, rightly or wrongly, that commuter carriers simply aren't as safe as the major airlines they mimic.

From a statistical point of view, flying in the United States is astonishingly safe. Between 2002 and November, 2008, the last month for which government numbers are available, about 4.4 billion people have flown 50 billion domestic miles. In that time, there have been just three fatal crashes. Unfortunately, all three involved commuter airliners: 19 died in Charlotte, North Carolina, in 2003; 49 passengers died in Lexington, Kentucky, in 2006; and 50 people (including one on the ground) perished in Buffalo early this month. The circumstances and the aircraft were different in each case, but the fact that all three involved commuter airlines has spooked business travelers and even pilots.

Smaller Isn't Better
In fact, it is the aircraft that are at the heart of most travelers' antipathy toward commuter airlines. Many commuter lines still fly what frequent travelers despise the most—small prop planes like the 19-seat Beechcraft 1900 that crashed in Charlotte. They are cramped and noisy, more susceptible to turbulence and fly at lower altitudes than jets, which means they are more often buffeted by inclement weather. Even the Q400, one of the most sophisticated aircraft in the skies, cruises at 25,000 feet, far below the 35,000- to 40,000-foot range used by traditional jets.

The workhorse of the commuter airlines—37- and 50-seat regional jets manufactured by Bombardier and Embraer of Brazil—are no match for Boeing and Airbus planes, either. Their smaller fuselages—the maximum cabin height of a 50-seat Bombardier CRJ is just 73 inches—make travelers feel crowded and uncomfortable. Because they are smaller, regional jets have some of the same "weight and balance" issues as earlier generations of commuter aircraft. And nothing makes a business traveler queasier—and feel less than "safe"—than being asked to change seats to help the pilot balance the aircraft.

Familiarity Breeds Contempt
All these essentially minor issues wouldn't bother business travelers as much if they weren't forced to fly commuter aircraft so frequently. Planes like the Q400 and the regional jets have a 1,300-mile range, so they pop up on many medium- and longer-haul routes that were once served by mainline carriers flying Boeing and Airbus jets. Although the numbers are in flux since the massive industry cutbacks after last Labor Day, about half of the flights operating from Chicago O'Hare and Washington/Dulles Airport lately have been regional jets or turboprops. More than a third of the flights at Atlanta Hartsfield are operated by commuter lines. And an astonishing 80 percent of the service in Cincinnati, a hub for Delta Air Lines, is flown by its commuter partners.

What's in a Name?
Commuter airlines and their smaller aircraft wouldn't be so omnipresent if it wasn't for the parlous financial state of the major airlines, which have farmed out huge chunks of their domestic flying because the commuters pay crews less and operate flights at a much lower cost per mile. Some of that cost savings comes from the hidebound nature of airline-labor relations. Pilot pay scales are based on aircraft size—the bigger the plane, the higher the pay. A top-line pilot flying a widebody jet for a major carrier can earn around $150,000 a year. By contrast, commuter airlines pay new co-pilots as little as $25,000 a year.

The relationship between major jet airlines and their commuter carriers is much more complicated then it appears. Although most are independent airlines with separate licenses issued by the Federal Aviation Administration, the commuter airlines sign code-share and "capacity purchase" agreements with the big airlines. They paint their planes to look like the major carriers' fleets, adopt variations on the big airlines' names and logos, and operate with flight numbers and schedules assigned by the larger carrier. The commuters rely on the big airlines to sell the tickets and market the flights too.

Continental Connection Flight 3407, for example, was not operated by Continental Airlines at all. It was flown by an airline called Colgan, which itself is owned by Pinnacle Airlines. Colgan and Pinnacle also fly under the colors of US Airways Express (the commuter operation of US Airways) and United Express (the commuter carrier for United Airlines). It also runs commuter flights under the Northwest Airlink and Delta Connection names for Delta Air Lines, which recently merged with Northwest Airlines.

Cockpit Concerns
Financial relations between the independent commuter airlines and the major airline partners don't always go smoothly, of course. (A large, financially troubled commuter called Mesa is currently embroiled in a convoluted lawsuit with Delta and a negative court decision could drive Mesa into bankruptcy.) From a business traveler's standpoint, however, it is the commuter's relationships with its own crews that leads to the safety fears.

As big airlines shifted routes to commuters, the commuter carriers were desperate for cockpit crews. Pilots with as little as 500 hours of flight experience were being recruited. ("When I got out of the Navy, I had 1,800 hours of experience before I even got into commercial aviation," one recently retired pilot for a major carrier told me last weekend.) Although all commercial pilots are trained to the same federal standards regardless of the airline that employs them, experience does matter on the flight deck—a reality celebrated last month when 58-year-old Chesley Sullenberger, an Air Force vet with 29 years of commercial flying experience, guided US Airways Flight 1549 to a safe landing on the Hudson River. By contrast, the first officer of Continental Connection Flight 3407 was just 24 years old. The 47-year-old captain had more than 3,400 hours of flying experience, but he'd only been in command of a Q400 since last December.

"It's the combination of things that worry me," a business traveler based in Santa Barbara, California, told me last week. "I see children going into the cockpit of small planes run by airlines I've never heard of and I say to myself, 'Do I really want to be on this flight?'"

Her answer, at least for the moment, is no. She's stopped booking the regional jets operated by Skywest Airlines under the United Express banner for the 262-mile flight to San Francisco. Now she pilots her 2007 Honda SUV up the freeway to meet with her Bay Area clients.

The Fine Print…
US Airways last year became the first large U.S. airline to charge for soft drinks, juice, coffee, and water in coach on domestic flights. But since no other carrier matched its move, the airline has abandoned the unpopular charge. Effective March 1, non-alcoholic beverages will once again be free on all US Airways flights.

Where to Dine Outside the Airport

Tue, 17 Feb 2009 05:00:00 GMT

Seat 2B columnist Joe Brancatelli hates eating at airports. Whenever he can, he slips out and grabs a bite at one of these restaurants. Read his descriptions here, and get addresses and phone numbers below.

Atlanta
The Brake Pad
http://www.brakepadatlanta.com
3403 Main St., College Park 30337
(404) 766-1515

Boston
Legal Sea Foords
http://www.legalseafoods.com/
Logan Aiport Terminals B & C
(617) 530-9000

Chicago/O'Hare
Giordano's
http://www.giordanos.com
9415 W. Higgins Rd., Rosemont 60018
(847) 292-2600

Lou Malnati's
650 N. Northwest Hwy, Park Ridge 60068
(847) 292-2277

Chicago/Midway
Giordano's
6314 S. Cicero, 60638
(773) 585-6100
Lou Malnati's
3859 W. Ogden Ave, 60623
(773) 762-0800

Charlotte
Villa Antonio
http://www.villaantonio.com
4707 S. Boulevard, 28217
(704) 523-1594

Dallas/Fort Worth
Via Real
http://www.viareal.com
Los Colinas Plaza
4020 N. McArthur Blvd., Irving 75038
(972) 650-9001

Denver
Blue Bay Asian Café
http://www.bluebayasiancafe.com
18607 E. 48th Ave, #106, 80249
(303) 307-0222

Detroit
Dema
Westin Detroit Metropolitan Airport
2501 Worldgateway Place, 48242
(734) 942-6500

Honolulu
Mitch's Fish Market & Sushi Bar
http://www.mitchsushi.com/
524 Ohohia St., 96819
(808) 837-7774

Houston
Chez Nous
http://cheznousfrenchrestaurant.com
217 S. Avenue G, Humble, 77338
(281) 446-6717

Los Angeles
In-n-Out Burger
http://www.in-n-out.com
9149 S. Sepulveda Blvd., Westchester 90045
(800) 786-1000

Mariposas
http://www.haciendahotel.com
Hacienda Hotel
525 N. Sepulveda Blvd., El Segundo 90245
(310) 615-0015

Minneapolis
Café Levain
http://www.cafelevain.com/
4762 Chicago Ave S., 55407
(612) 823-7111

New York/La Guardia
Trattoria L'incontro
http://www.trattorialincontro.com
21-76 31st St., Astoria 11105
(718) 721-3532

New York/Kennedy
Tandoori Hut
119-04 94th Ave., Richmond Hill 11419
(718) 850-8919

Newark
Casa Vasca
141 Elm St., 07105
(973) 465-1350

Oakland
Dewey Bargiacchi's Francesco's
http://www.francescosrestaurant.com/
8520 Pardee Dr., 94621
(510) 569-0653

Philadelphia
Bomb Bomb BBQ Grill and Italian Restaurant
http://www.bombbomb-restaurant.com/Home.html
1026 Wolf St., 19148
(215) 463-1311

Oregon Diner
http://www.oregondinerphilly.com/
302 Oregon Ave., 19148
(215) 462-5566

Phoenix
Pizzeria Bianco
http://www.pizzeriabianco.com
623 E Adams St., 85004
(602) 258 8300

Salt Lake City
The Red Iguana
http://www.rediguana.com
736 West North Temple, 84116
(801) 322-1489

San Francisco
Sinbad Grill
http://www.sinbadgrill.com
150 E. 4th St., San Mateo, 94401
(650) 347-6060

Seattle
Bai Tong
http://www.baitongrestaurant.com
16876 Southcenter Pkwy., Tukwila, 98118
(206) 575-3366
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