The 12 months just past will be remembered as the year America inaugurated its first African-American president, a president whose oratory in January held the world transfixed with a message of hope.
In the world of business, however, 2009 will be remembered as a year of recession that ended with glimmers of hope. And in the business of travel, it was just a bummer.
It was the year of the flu, the fee, the alliance, the tax and the backlash. In 2009, travel people marveled at the arrival of the biggest ship and marked the first flight of the greenest aircraft, but mostly they struggled with slack demand, falling prices and declining yields.
The year capped "The Decade From Hell," in the words of Time magazine, and we're pretty sure that many travel professionals would second that notion.
But to be fair to the year, if not to the decade, not all the big news was bad, and even when it was bad, it kept the travel industry on its toes. Say what you will about 2009, it gave us all something to talk about -- and another list of Top 10 stories.
Merchant fee madness
The event that could prove to be most memorable and potentially game-changing for many travel agents was one that directly affected only 28 retailers. But it raised such a specter among agents that ASTA fought for, and got, enough attention on Capitol Hill to fire a warning shot at United.
In the end, United did precisely what it said it would do: It denied access to its credit card merchant accounts to a handful of retailers, who were instructed to put credit sales on their own merchant account and remit cash to United. Full stop.
If United explained to any person what it was up to, that person hasn't talked, and the carrier's silence has led many agents to fear the worst -- i.e., that United was experimenting with ways to transfer the cost of credit card fees to agents and passengers, something long thought to be on the wish list of every airline executive's evil twin.
To the relief of the agency community, United didn't repeat the exercise with a second group of agents, and no major airline matched, so there is as yet no race among airlines to slash and burn.
As for the 28 agents, they have found various workarounds, such as booking UA through other agents or just booking away, but as the year ends, many agents are still wondering where and when the next shoe will drop.
Airline fees
Airline pricing practices have always given passengers lots to talk about, but no single topic dominated the conversation in 2009 more than fees.
It has long been customary for airlines to charge for certain extra services, such as in-flight booze or, more recently, paper tickets, but the current fee frenzy is something else again.
Partly emulating Ryanair and partly to cope with fuel costs, major U.S. airlines in 2008 began charging a fee for the second checked bag, then for the first checked bag.
Now the a la carte trend is in full swing. Even Southwest, which boasts that "bags fly free," came up with a fee for passengers who want to reserve a spot in the boarding line.
To the applause of Wall Street, major airlines have been crowing all year that such fees have generated billions in ancillary revenue, and some analysts have said it's only the beginning of what could be a profitable new business model, despite carping from passengers that they dislike being nickeled-and-dimed.
But the biggest challenge for the airlines' love affair with fees could be the tax man. Fees that are not shown as part of the fare are excluded from the calculation of federal ticket taxes.
Uncle Sam might soon be asking whether he's getting his fair share for air traffic control and airport improvements.
This could end badly for the airlines.
The Alaska uproar
For Alaska cruising and Alaska tourism, 2009 seems destined to become a demarcation year, a bright line between "before" and "after."
Years of steady growth produced a passenger head count of 1 million in 2009, but several lines plan to sharply cut Alaska capacity in 2010 and beyond.
Based on current capacity projections, they will accommodate 860,000 cruise passengers next year -- a 14% cut that will wipe out five years of growth.
Cruise lines are virtually unanimous in claiming that it's not just the recession. They say that the 2006 cruise ship initiative, which imposed new taxes and regulations on the industry, has made it too difficult to make a profit in the Frontier State.
Alaskans, with their love-hate relationship with tourism, are predictably divided. Some call for repeal of the passenger head tax to entice the cruise lines to return, but others say the state should try to diversify its tourism product so it is less dependent on cruising.
Against this contentious background, cruise lines represented by the Alaska Cruise Association went to court in September to overthrow the tax on constitutional and other grounds, alleging among other things that some revenue from the tax is being diverted to local projects that have nothing to do with cruising. A lawsuit, with its accusations, claims and counterclaims, can sour any relationship, and in the case of Alaska and the cruise lines, sweetness seems a long way off.
Backlash!
Depending on how you count your whammies, the travel industry got a double or triple whammy in the aftermath of the financial meltdown.
First came the general drop in business and leisure travel, a predictable consequence of the recession.
Then came the so-called AIG effect, the perception among corporations (especially those getting government bailouts) that spending on meetings or convention travel should be curtailed, even if the expenditures are justified. Even incentive trips that employees had earned came to be denounced as junkets for fat cats.
This mindset persisted all year and took billions in business away from hotels and resorts around the world, stinging local economies and other industry sectors.
It didn't help that the government itself fanned the flames of public outrage over business travel spending. Although Uncle Sam stopped short of imposing travel rules on companies getting bailouts, the backlash against travel prompted some government agencies to cut back on routine trips to meetings and conferences at resorts or resort destinations.
Throughout the year, mayors, governors and hotel executives tried to get the message out that the anti-travel mood was hurting the recovery.
The U.S. Travel Association launched a "Meetings mean business" campaign, and other groups distributed best practices and spending guidelines, but it might be a while before the industry can erase the notion that business travel is politically incorrect.
Panicdemic!
The SARS outbreak in 2003 gave the travel industry a shock, a scare and a hard lesson about how vulnerable this business can be to a public in panic mode.
Travel and public health officials have been on pins and needles ever since, waiting for the pandemic that the oddsmakers say will inevitably come.
It appeared to arrive in the spring of 2009 in Mexico. Following reports of a mysterious disease with a high mortality rate, tourism ground to a halt, Mexico City went into a virtual lockdown mode, cruise ships went elsewhere and some destinations seemed on the verge of turning away anybody or anything remotely Mexican. There was talk of trying to quarantine an entire country.
The H1N1 swine flu outbreak was officially declared a pandemic by the World Health Organization on June 11, but by that time the word had lost some of its shock value, the disease had a familiar name ("flu") and it was becoming clear that most individuals could expect a full recovery.
It also helped that the WHO specifically advised against restrictions on travel, noting that if the disease is "everywhere," there is no reason not to travel anywhere.
If there's an upside to this story, it is this: Government tourism and public health officials around the world seem to have learned some things about contingency planning, communication and public education.
This might not be "the big one," but after the events of 2009, we are most certainly better prepared.
Online travel agency hotel taxes
Online travel agencies have been at odds with local tax authorities across the country for several years, as cities and counties have questioned how local hotel taxes are calculated on merchant-model hotel sales.
Many jurisdictions believe that such taxes should be calculated on the retail price that the customer pays, which includes the seller's markup.
The OTAs have been fighting a steady stream of court actions and tax assessments, asserting that they should only have to remit tax on the wholesale or net rate they get from the hotel.
The OTAs have lost some of these legal battles and won some, but in 2009 the tide might have begun to turn. For the first time, a state -- Florida -- brought an action in federal court to force the companies to pay tax on the retail price paid by the consumer rather than on the wholesale rate.
In addition, that most major of cities, New York, revised its hotel tax to stipulate how its expects taxes to be calculated -- an approach that, if adopted by other jurisdictions, eliminates the uncertainties of litigation.
Unfortunately, New York's ordinance was so broadly worded that it threatened to snare offline agents in its tax collecting net, until the city clarified its intent by issuing guidance for travel agents and other intermediaries.
More cities and states might adopt the New York approach and change their tax laws, or they might continue taking their cases to court, but as long as it seems that they are leaving tax revenue on the table, it's a fair bet that they'll be taking steps to collect, one way or another.
Tarmac nation
Tarmac delays proved to be the consumer protection story that just wouldn't go away in 2009. Consumer advocates had been using the issue as the spearhead of a new drive to get Congress to pass broad passenger rights legislation that would address not only tarmac delays but other consumer protection matters.
But just as the issue appeared to begin a slow fade from the headlines, an odd combination of circumstances created the perfect poster child story: Continental Express Flight 2816.
The Houston-Minneapolis flight, operated by ExpressJet, was diverted by bad weather on the night of Aug. 7 to Rochester, Minn. The terminal was closed, and the only people around were Mesaba employees, who erroneously believed they could not open the terminal without Transportation Security Administration personnel on hand.
So the passengers spent the night in the 50-passenger aircraft while the crew, their dispatchers and the Mesaba employees debated what to do.
In the short history of tarmac horror stories, there have been longer delays affecting larger groups of passengers than the ExpressJet flight. But this story resonated in the media like no other, even prompting Transportation Secretary Ray LaHood to order an investigation, calling the incident "troubling."
That led to a precedent-setting move by the DOT's enforcement office to charge all three carriers with unfair and deceptive practices, an action that put every other airline on notice that the DOT can act against tarmac incidents on its own initiative under existing law, when it wants to.
Travel Promotion Act
For travel industry lobbyists, 2009 will be remembered as a year of significant legislative victories that unfortunately happened in reverse order.
The first came in September, when the Senate broke a long logjam and passed the Travel Promotion Act. A month later, the House passed the same measure, pointedly acting in the wake of Chicago's failed bid for the 2016 Olympics, amid talk that the U.S. was not a welcoming destination.
The bill would set up a public-private Corporation for Travel Promotion that would promote the U.S. in foreign markets and erase what are felt to be negative perceptions about U.S. security and entry procedures.
Your old civics books taught you that when a bill passes both the House and the Senate, it goes to the president for his signature and then becomes law.
The Travel Promotion Act, however, is a bill that would, among other things, generate revenue, and the Constitution requires that such measures originate in the House. That has been taken to mean that the Senate, which passed it first, must pass it again.
Assuming the Senate hasn't lost its nerve, the expectation is that the bill will become law, but getting something scheduled for a vote, much less passed, is sometimes compared to pushing a rope.
If the rope doesn't bunch up, the U.S. could soon have something it has never had: a multimillion-dollar fund to promote the country as a tourism destination to the rest of the world.
Airline alliances
For the big airline alliances, 2009 was all about taking it to the next level. Star, the alliance with the most members, got a huge shot in the arm at the end of the summer when Continental finally disengaged from the rival SkyTeam group and joined Star.
The migration, which had been meticulously planned for more than a year, coincided with a DOT decision that gave antitrust immunity to Continental, United and other Star members, who plan to create an integrated joint venture with revenue sharing on U.S.-Europe routes.
In that department, Star is playing catch-up to SkyTeam, whose leading lights, Air France/KLM and Delta/Northwest, are much further along in developing a "metal-neutral" transatlantic system.
In this scenario, it doesn't matter to the joint venture participants whether Air France or Delta operates a particular Atlanta-Paris segment. All the carriers feed into the hubs, and all participate in the profits.
Members of the Oneworld alliance are much further behind in developing that kind of operation, and their request for antitrust immunity is stalled at the Transportation Department.
As that process dragged on, British Airways and Iberia finally agreed on the terms of a merger. But the Oneworld family faced a new challenge in Asia when Delta offered financial aid to the financially ailing Japan Airlines if it would agree to defect to SkyTeam.
American, seeking to keep Oneworld's main Asian partner in the fold, made a counteroffer, determined not to be the odd man out in Asia. Watch that continent.
Big!
It is the supreme irony of our latest business cycle that the travel industry's two biggest game-changers, the Oasis of the Seas and the Las Vegas CityCenter, arrived in a year when the travel business was hitting bottom on all cylinders.
But for true game-changers, a recession is only a backdrop. In fact, these two projects were designed to stand out and put everything around them in the background, and each seems to have the potential to do exactly that.
By now, the impressive numbers and list of features are sounding familiar.
Royal Caribbean International's Oasis is a true colossus at 220,000 gross registered tons and a passenger capacity of 5,400, but it also boasts a radical innovation in design, with its central axis offering open-air "neighborhoods," a zipline and trees.
CityCenter, a joint venture of MGM Mirage and Dubai World, also breaks the mold with its $8.5 billion worth of Las Vegas wow, spread over 67 acres and offering 6,000 hotel rooms and a dizzying variety of pools, spas, casinos, shops and restaurants.
They were designed to be game-changers, but the game changed since they were designed. The travel market today offers up fewer travelers and fewer discretionary dollars than it did in mid-decade.
But as the market rebuilds, these projects are going to be category leaders, and given what we know about the investment climate, it might be a good while before anything else comes along to out-wow them.