Preview 2009: The Industry Evolves, Gone Missing

The travel industry said goodbye this year -- or will be bidding farewell next year -- to a number of players, products, brands, accoutrements and services. Travel Weekly's editors were asked to assemble "gone missing" lists from each of their areas of expertise.

Here's where they forecasted changes that will leave behind a bit of a vacuum in 2009:

The Caribbean

• Hotel employees. Cuts in airlift and a drop in bookings have led to layoffs at several Caribbean properties, including 800 workers at the Atlantis resort and 40 staffers each at the Sheraton Nassau Beach Resort and the Wyndham Nassau Resort in the Bahamas.

In Puerto Rico, the Caribe Hilton in San Juan cut 50 workers and the Wyndham Rio Mar Beach Resort & Spa in Rio Grande let 200 workers go, representing 20% of its staff.

• Hotel armoires. Remember those dark, hulking pieces of furniture that dominated every hotel room front and center, usually directly across from the bed, five years ago? The nonflat-screen TV occupied the center section, sandwiched by useless shelves on each side. Drawers below usually remained vacant.

Did the advent of flat screens on narrow glass tables or counters in guestrooms relegate thousands of armoires to landfills or hotel employees' garages and basements?

And what happened to all the old TVs?

• Wall-to-wall carpeting. What would prompt a Caribbean beachfront hotel to ever even consider carpeting a room in which sand, sea and sun constantly threaten rug ruin? Fortunately, treated wood floors, tiled floors, even marble floors are gaining a toehold in the Caribbean these days.

• Terestella Gonzalez Denton. The exuberant executive director of the Puerto Rico Tourism Co. was gone with the failed re-election bid of Gov. Anibal Acevedo Vila, who faces bribery and corruption charges.

• American Airlines and American Eagle flights in San Juan. True, both carriers still fly to and connect through San Juan, but the cutbacks that took effect in September have taken their toll. American Eagle is down to one flight a day from three into St. Lucia's Vigie airport in the north, and San Juan-Grenada service dropped from daily to four a week.

• Carib Aviation. The Antigua-based regional carrier, established in 1972, went bust on Sept. 30, citing rising fuel costs and the resignations of seven pilots. That left tiny Montserrat without air service until Winair stepped up in late October.

• The fourth floor of the Riu Montego Bay. A Jamaican court order in May halted construction of the hotel's unapproved fourth floor, which violated the three-floor building permit in effect in the parish of St. James in Jamaica. Eventually, the top (illegal) floor of one of the three guestroom wings was removed, and the hotel opened on time on Aug. 29.

-- Gay Nagle Myers

Hospitality

• New hotel brands. An uncertain number of the 40-odd new brands that were announced in the building boom that preceded the economic crash are, if not necessarily gone, certainly on hold. Barry Sternlicht's luxury eco-brand, 1, is among the more high-profile brands in limbo for lack of money. Among other high-profile projects also in question, Boyd Gaming's four-hotel Echelon project in Las Vegas, the fifth and sixth phases of Las Vegas Sands' massive casino and retail development in Macao and Ritz-Carlton's first Reserve brand resort in West Turks and Caicos, which was being financed by Lehman Brothers.

• Big spenders. Although early in 2008 the luxury sector had still been widely considered recession proof, that changed quickly after October, which saw the collapse of Lehman Brothers and steep dives in financial markets. Exacerbating the drop in luxury was taxpayer-backlash to reports that AIG went ahead with a retreat at an Arizona resort after a multibillion-dollar government bailout. These and other pressures culminated in a double-digit plunge in luxury sector hotel occupancy in the fall. Luxury operators will spend 2009 trying to woo meetings and wealthy travelers with everything from bargains to environmental and other socially responsible give-backs.

• Condo-tels. Given the drop in real estate values and tightening credit, most hotel executives and analysts agree that the condo hotel trend that became popular during the housing and hotel building boom has not just slowed down but is dead.

-- Jeri Clausing

Cruise lines

• The Queen Elizabeth 2. The QE2 sailed its 41st and final year as a cruise ship for Cunard in 2008 before retiring to Dubai as a floating hotel.

The ship sailed a series of farewell voyages that ended in Dubai in November.

Cunard sold the QE2 to Istithmar, a company wholly owned by the Dubai government, which plans to convert the liner into a luxury hotel off of Palm Jumeirah, the world's largest man-made island.

The QE2's fate is similar to that of a predecessor, the Queen Mary, which is a floating hotel and tourist attraction in Long Beach, Calif.

• Colin Veitch. After ushering in Freestyle cruising and the U.S.-flagged interisland Hawaii fleet and overseeing the delivery of eight new cruise ships in an attempt to operate the industry's youngest fleet, Veitch stepped down from the helm at NCL Corp., which he had headed since 2000.

Veitch also helped to popularize the U.S. homeport movement, which NCL dubbed Homeland Cruising, and put the industry's first year-round cruise ship in New York, with a seven-day, New York-Bahamas itinerary.

• Hawaii-based ships. Veitch's Hawaii operation was dismantled in 2008. The Pride of Aloha and the Pride of Hawaii both lowered their American flags and were renamed and redeployed to NCL's foreign-flagged fleet, leaving only the Pride of America in Hawaii.

NCL's bold Hawaii initiative turned into a major drag on the line's profits as the U.S. flagging meant having to pay U.S. wages and benefits and to forgo an onboard casino. At the same time, the American crew earned itself a litany of complaints.

NCL said its one remaining ship in Hawaii is profitable.

• Traditional dining. This year saw the ushering out of legacy cruise dining in favor of flexible dining options. The old-school tradition of sitting at the same table at the same time every night has lost favor among many consumers, and with the lines offering so many alternative dining choices on ships, people want to move around and try the offerings, from tandoori chicken to sushi to celebrity chef steakhouses.

• Fuel surcharges. They were first instituted in late 2007, but 2008 was the year of the fuel supplement. Carnival Corp. brands first slapped passengers with the fees in November of last year, and other lines quickly followed. They were controversial from the start, with the Florida attorney general's office investigating the legality of assessing the fees retroactively and suspicions of possible collusion when the lines first set the extra charges.

As gas prices at the pump tumbled to less than $2 per gallon, both passengers and travel agents began questioning the cruise lines' continuing the fees, as well as their byzantine methods of refunding them.

Carnival Corp. dropped the supplements on all cruises from Dec. 17 on, and again the other lines quickly followed.

• Cruise Value Center. One of the country's top cruise retailers folded in November, one year after Jeff and Paula Kivet sold it to Travel Holding Entity of Bloomfield Hills, Mich., a company managed by brothers Richard and Ronald Smith.

After more than 14 years in business, the East Brunswick, N.J.-based company shut down suddenly on Nov. 10. Travel Holding Entity said that the company had simply run out of money, but it left many unanswered questions when it was revealed that several million dollars in final payments on cruises had been paid by consumers to CVC, but had not been forwarded to the cruise lines.

-- Johanna Jainchill

River cruising

• Majestic America Line (and, with it, U.S. river cruising). It didn't come as a surprise, and when it did come, it was so anticlimactic that it was almost easy to miss the passing of Majestic America Line and the seven storied vessels that plied America's inland waterways.

Whatever the management mistakes at Majestic's parent company, Ambassadors International, these seven vessels are now all in drydock and will remain there unless some entity purchases one, some or all of them.

Most noteworthy is the grande dame of the fleet, the Delta Queen paddlewheeler, built in 1926. The vessel is stuck in legislative limbo as Congress works out whether to grant it a statutory exemption from a 1966 law banning wooden vessels from carrying 50 or more people on overnight trips.

-- Michelle Baran

Travel agents

• Plastic Iatan/IATA ID cards. IATA plans to eliminate the plastic version of its travel agent ID cards by the middle of 2009 to cut costs and reduce fraud.

Travel agents would rely instead on personal ID codes -- and protect them like a Social Security number as part of fraud prevention. Suppliers would access each travel agent's professional information on a computer database, where each agent's file would include a photo.

• ARC's Payment Express. This service allowed airlines to collect fees from agents through the ARC settlement system without obtaining explicit authorization from each agency.

In early 2008, United began to use the system to collect per-segment fees from agencies that had failed to work schedule changes and cancel inactive trips. United said it was recovering GDS fees triggered by such failures. Continental, Delta and Lan Chile also used Payment Express to debit agents' accounts.

Responding to agent feedback (read: complaints), ARC said in October that it would scrap Payment Express and shift these settlement activities to ARC Memo Manager, a program that lets agents initiate payments.

• Travel agent-issued paper air tickets. Effective June 1, IATA ceased supporting paper tickets issued by IATA agencies worldwide. This did not affect U.S. agencies, which settle through ARC rather than IATA, and ARC does not seem inclined to take the paper option away from U.S. agencies, although paper represents a tiny and rapidly disappearing slice of total ticketing. There are still some carriers that don't support e-tickets.

-- Nadine Godwin

Airlines

• Free checked bags. With the notable exception of Southwest, most major airlines have hit passengers with fees for not only second, but first checked bags.

Just how far carriers will go with these extra fees is an open question, but airline CEOs have been assuring analysts that the new revenue streams are here to stay. Indeed, the carriers are counting on more unbundled service fees, with menus of fee-service packages offered on airline websites.

• Empty planes (for a while at least). All carriers executed major capacity cuts through the latter half of 2008, with plans for more should the need arise in 2009. With the double-digit capacity cuts and airlines looking to tweak schedules to reduce flights or take other measures on unprofitable routes, that spare middle seat buffer will likely be harder to find. So will overhead bin space.

• Chapter 11 filings. Instead of declaring reorganization bankruptcy, carriers will be forced to merge or go out of business.

There's not nearly the cash floating around that airlines saw earlier this decade, and what little there is will be guarded heavily. Airlines are just too risky these days.

• Oil shock. Prices might soar or sink, but airlines have become quite adept at handling extremes. More than that, they're preparing for both the highs and the lows, expecting the worst and hoping for the best.

The bottom line? As US Airways' Scott Kirby told analysts this fall: "We now make decisions ... with oil at $150 barrel."

-- Mike Fabey

Tours

• GrandLuxe Rail Journeys. The Evergreen, Colo.-based vintage train operation, formerly known as American Orient Express, went out of business in August after offering luxury rail service for less than a year. GrandLuxe, which offered 10 itineraries, ranging from four to 12 days, aboard a 21-car train, said in a letter to clients that it was "financially unable to continue operations."

-- Michelle Baran