For Royal Caribbean: Bigger is Better X2

     
       If you have any interest in the cruise industry, from the occasional cruiser to the most hard core fan of cruising; you have heard of Royal Caribbean Line's ships, the Oasis of the Seas and the Allure of the Seas.  These two mega ships, each capable of carrying more than 5400 passengers, are the largest cruise ship ever built.  Even though they are very popular with travelers and command a premium price, they also have many detractors because of their size and inward ship focus.  Well, love em or hate em, Royal Caribbean is doubling down.  It has ordered not one, but two new ships of the Oasis-class, each in fact will be larger than the existing vessels.

       According to a report from Reuters, Royal Caribbean has just ordered a 4th ship of the Oasis-class to be built for delivery in 2018.  The 3rd ship in the series was ordered last year and is scheduled to go into service in 2016.  The two vessels will be built in France, and at 225,300 tonnes, will be larger than the existing ships, capable of carrying over 6000 passengers.  Each ship is budgeted to cost $1.8 billion.  Overall Royal Caribbean has increased its ship building budget from $5 billion to $6.8 billion thru 2018.

       No matter what you think of the Oasis-class vessels, just based on their sheer size and capacity, they will have a huge impact on the cruise industry.  Very few ports can handle ships of that size.  But with a booming demand for cruises in Asia, the cruise industry is responding by adding more capacity in that region.  Royal Caribbean has just reported it will send its newest ship, Quantum of the Seas, to China year round starting in 2015, after it was reported the Chinese are building a brand new port terminal for her.  Other ports in Asia and the Caribbean are reported to be expanding their port capacities in order to handle the larger vessels.  In the US, Port Canaveral in Florida is planning to build a brand new terminal and 1000 space parking garage for Royal Caribbean; for the rumoured new home port for one of the Oasis-class ships.

Summer Travel 2014: The Travelers Are Back!

       Say the word summer, and for tens of millions of Americans the word is most associated with travel and vacation.  Unfortunately for the travel industry, all segments; from airlines, to resorts, to cruise lines saw huge losses in demand from the recession as the American consumer cut back on both the quantity and amount spent on leisure travel.  The good news is the travel industry has seen small steady growth over the last several years, as consumer confidence has slowly returned.  The reports from several travel industry groups show that trend is accelerating, as more Americans  not only want to travel more this summer, but are willing to spend more while they travel.

       According to a AAA survey, a post-recession record 36.1 million people are expected to travel during the  Memorial Day weekend.  This is a 1.5 percent increase, for the traditional start of the summer travel season.  The US airlines expect 210 million passengers to fly this summer, the highest in 6 years, including a record 29.9 million on international flights.  In addition the AAA report stated that not only are more people planning on traveling over Memorial Day, they are willing to spend more.  AAA also reports that hotels rates are going up 2% and airfares are up 6% from a year ago.  This increased spending trend is supported by a spokesman from the travel website Priceline, who recently told CNBC that summer travel spending is up over 1% from last year.

       Not only are Americans planning on travelling more this summer, they want to travel longer and are willing to upgrade.  According to a recent American Express Travel survey, the average summer trip in 2014 will last 10 days, a huge jump from last years 7 days.  Also people want more out of their trips, and want to upgrade their experiences.  In an interview with NBC News, Laura Fink, vice president of marketing at American Express Travel, stated; " across the board...people are paying a little more for the extras, cabin upgrades on cruise ships, better rooms at hotels".

       What this means, if you have procrastinated and haven't finished planning and booking that trip you want to do this summer, you may want to contact a travel professional. It will save you hours looking up airfare, researching resorts and your sanity.

Not All (Air)Miles are Created Equal

       For tens of millions of airline passengers, both the casual traveler and the professional road warrior, one of the major benefits of air travel is collecting those airline miles so we can get those upgrades or free seats.  But according to a recent annual survey, the ability to use your miles varies greatly by airline.  The survey, reported in the Wall Street Journal, was conducted by the the the firm Switchfly Inc., and has become the standard for the airline industry, measures frequent-flier award seat availability.  In the survey, an online check is done for two seats at the lowest possible mileage level on both the 10 busiest medium and long distance routes for each airline.  By using the busiest routes, the survey checks where airlines have the most available seats and where travelers fly most often.

The following chart shows the shows the results of the 2014 survey for the major U.S. airlines, and the point change from the 2013:

     AIRLINE / % OF SEAT SEAT AVAILABILITY / POINT CHANGE FROM 2013

Southwest / 100% / No change

JetBlue / 92.9% / +4.3

United Airlines / 71.4% / -8.6

Alaska Airlines / 58.6% / +2.2

American Airlines / 55.0% / +6.4

Delta Air Lines / 55.0% / +18.6

US Airways / 35.0% / -1.4

      The reasons and the response to the survey by each airline is very insightful.  Southwest has some structural advantages in its high-frequency, short-haul route system which ensures plenty of available seats.  In addition, its points-based rewards system is shown for every reservation with a cash price and a point-based price.  US Airways has always been at the bottom of the survey, and has a management rule of being very conservative with frequent-flyer rewards.  Interestingly, after the merger with American Airlines, the US Airways management team will run the combined company.  Does anyone think American Airlines performance in the survey will improve next year. Delta Air Lines saw a tremendous improvement last year in its survey performance.  The airline started increasing award seats available on domestic flights on January 1.  But Delta is making some major structural changes to its reward program that could effect its performance next year.  Starting in 2015, Delta is awarding miles based on fare paid, and not miles traveled, and is reducing the miles required for consumers to redeem their miles.

     In its 5 years of existence, the reward seat availability survey has had a major impact on the airline industry. It is is the tool that has allowed consumers a method to quantify seat availability and compare airlines head-to-head.  Hopefully the airlines will respond to increased consumer demand.  I say any information that allows to make better decisions is always welcome.

Our Special Destination

       I was just reading the latest issue of Conde Nast Traveler when they mentioned our favorite special destination.  Everyone who likes to travel has a favorite destination; someplace that is special to them, or maybe it just felt right.  It maybe a country,city, hotel, a resort, or a cabin on the lake: whatever it is we all enjoy and look forward to returning to our special destination.  For my family, that destination is a small four season resort in the heart of northern Michigan called Boyne Mountain.

       Boyne Mountain resort, located in the town of Boyne Falls Michigan, is not well known outside of the Midwest.  It was built as a ski resort, and we enjoy our ski weekends there as much as our "real" ski trip each year to Utah or Colorado.  During our spring breaks or summer vacations, each member of my family has an opinion of where  they would like to go: on a cruise, or to the beach, or on a trip to London.  But if you ask them if they want to go to Boyne, each of them will respond with a YES!!  For each of us the reason we love it is different.  For my boys, they love the variety of year round  activities; from snow boarding to zip lines, water sports on Deer Lake,  and an excellent indoor water park when the weather gets bad.  For my wife, the Foodie, its all the great and varied restaurants in Boyne City and around the region. As for me,  I love the vibe and scenery of an area that has  something for my entire family, and is within a few hours drive from our home.

       I think that a major benefit of traveling to different locations with your family is that it allows you the leisure to explore and discover your family's special destination.  Wherever it may be, I hope your family enjoys the journey to discover your special destination as much as my family has.  So get out; and EXPLORE!!