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Growing competition for China’s car rental market

Tuesday, August 4th, 2009

Chinese car rental company, eHi Car Rental Co.Ltd has received financial backing from two investors in a bid to increase the car hire market for the country.  The company has already raised funds of about $20 million and is expecting to receive further financial backing in late 2010.

“Car rentals in the US are a sunset business, but in China, it’s a sunrise one. China has the potential to become the world’s biggest car rental market, where the world’s biggest car rental company could be born,” said Ray Zhang, chairman of eHi.

Zhang said that about two thirds of the US population owned cars but in China ownership is much less.  There are approximately 200 million Chinese who hold a drivers license and it is growing by 20% per year.  But with less space in the cities and with China’s effort to reduce carbon emissions, Zhang believes that the car rental will boom in the county.

eHi hopes to raise increase their fleet from 1,000 vehicles to over 10,000 over the next three years, adding further competition to multinational car hire companies such as Hertz and Avis.  Zhang hopes company profits will increase to more than $14 million, compared with $4.3 million last year.

Thanks to www.reuters.com for the above quote, for more details on this story please visit their website.

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British Airways Falls £148 In The Red

Monday, August 3rd, 2009

British Airways has lost £148million over the last three months which has led to may staff lay-offs and cut-backs across the board.

The airline has revealed that it plans to drop a further seven routes and will ground 22 of its biggest aircraft to help the airline survive the worst downturn in air travel in over 20 years.

The airline revealed the magnitude of the slump, as it reported its first peak travel season loss, plunging £148million into the red in the last quarter.

Compared with the same time last year, BA still made a profit of £7million in the quarter, as holidaymakers began to tighten their belts.

Conditions remain ‘very challenging’ and there are ‘no signs of improvement’, BA chief Willie Walsh said.

He said that 22 aircraft including Boeing 747s and 757s would be grounded through the winter season which will remove 8,000 seats out of service.

Capacity of the airline is being cut by 3.5 percent this summer and 5 percent in the winter and the airline will cut back seven routes from Gatwick to New York, Alicante, Barcelona, Madrid, Malta and Palma.

Thanks to the Daily Mail.  For more information on this article, visit www.dailymail.co.uk

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Soggy weather boosts holidays abroad

Friday, July 31st, 2009

Tour operators in the UK are reporting a surprising upturn in bookings to sunnier destinations thanks to the disappointing summer that has so far been experienced at home.

Weather forecasters were predicting an odds-on chance of a sunny summer back in April but Britons who were planning local holidays to beat recessionary travel budgets have experienced nothing but rain.

With the traditional long weekends that bookend August looming families are despairing on where to take the kids before the summer holidays are over,  and Peter Constati, CEO of mainstream travel at Thomas Cook, suggests going abroad.

“The summer holidays have only just started and today’s weather update will send many parents into despair as there are still five long weeks before school starts again. Rather than worry about how to fill these long wet days in the UK, our advice is to book a holiday with guaranteed sunshine.”

A weak pound and recession have hurt people’s travel wallet this year and the industry was predicting a bumper season for the local industry as many Britons opt to take their annual hols at home. But the typically fickle British weather has let the side down. As a result operators are noting an increase in last minute bookings on packages to the Canaries and Balearics among other sunny destinations.

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Southeast Asia travel affected by flu virus

Wednesday, July 29th, 2009

The Pacific Asia Travel Association (PATA), has published figures from its Strategic Intelligence Centre that suggest Southeast Asia will not avoid the inevitable drag on tourism resulting from the global H1N1 flu virus.

The body, which plays a leading role in the region’s tourism, predicts a drop of at least five percent among the ASEAN nations, which usually record robust year-on-year growth of arrivals. While some of this is related to the world recession, it is predicted that the virus will discourage arrivals over the critical winter season, when visitors from the Northern hemisphere prefer to visit.

“It is clear that we must now apply the knowledge, expertise and lessons learned from the SARS crisis of 2003 and recent outbreaks of the Avian Influenza A (H5N1)”, said Greg Duffell, the president and CEO of PATA, from a Skal meeting in Thailand.

Travel business confidence is already shaky, particularly in Thailand where political unrest has disrupted the country’s usually sunny reputation. PATA fears that more drastic cross-border travel restrictions, as the preventative measures are ratcheted up, will have negative affects.

PATA is planning to post advisory bulletins about H1N1, and present a set of FAQs after a forthcoming Tourism Emergency Response Network (TERN) meeting.

TERN was launched in 2006 by the World Tourism Organisation (WTO) and includes members of the world’s leading tourism associations.

News provided by www.travelmole.com, more available on their website.

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Rising airline stocks signal a brighter future

Monday, July 27th, 2009

Friday’s stock market close witnessed airlines stocks rising as investors signaled confidence in a brighter future for air carriers.  Friday marked the second consecutive day of rising airline stocks as investors anticipated a brighter future for the industry.

Tempe Arizona based US Airways helped led the rally when it announced that its second quarter loses were less than expected.  US Airways also posted more cash reserves on its balance sheets, helping drive up carrier stocks.

While this mixed news was a welcome relief to investors, airline industry officials have continued to call for increased efforts at consolidation within the airline industry.  Chairman and Chief Executive Doug Parker spoke to Thompson Reuters and stated that he believed the time for greater airline consolidation was coming.  Parker said “one day I believe the planets will align.”

In spite of recent upward trends, US Airways still faces difficulties.  J.P. Morgan analyst Jamie Baker acknowledged that in the past US Airways was at the top of the list of airlines most susceptible to bankruptcy.

While this news is hopeful, it does little to change other overall outlook for the airline industry.  Airlines continue to report weak second quarter earnings due to decreasing passenger numbers.  Despite this fact, the NYSE Acra Airline index has made gains of 12 percent as investors anticipate seat capacity cuts and a return to stable booking rates.

Thanks to www.marketwatch.com for information in this report.

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US car rental companies buying more foreign cars

Friday, July 24th, 2009

In further bad news for US automakers, it was revealed that American car rental companies are nixing American made cars and are buying more than half of their fleets from foreign car makers. The big three US automakers, General Motors, Chrysler, and Ford, have finally lost market share to the Far East manufacturers, Nissan, Toyota, and Honda.

This represents a huge shift in fleet buying trends over the past three years. In 2006 American made vehicles accounted for more than 80% of the rental fleet. Those numbers have been steadily decreasing ever since. Last year the number was down to around 66% of the fleet being comprised of American made cars.

“It’s amazing how things turn around. It used to be you’d never see foreign cars in fleets, but the companies re-examined their businesses and decided to embrace non-US brands,” commented Neil Abrams, a rental car expert.

It appears that Nissan is the big winner in the trend shift. In today’s rental car market the Nissan Altima is king, having dethroned the Chevy Impala as the most popular selling rental car in America. In addition, Hertz, who used to prefer the Ford brand, now has more Nissans in the fleet than Fords.

Thanks to www.chicagotribune.com for the above quote. For more information on this story please visit their website.

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UK may reconsider Air Passenger Duty

Thursday, July 23rd, 2009

Just about every airline, ferry line, travel agency, and every other travel related organization in the entire UK has come out against the proposed Air Passenger Duty. Even Sir Richard Branson personally weighed in on the matter. All of this opposition has had absolutely no success in moving the government off of its unpopular stance.

That changed today when reports surfaced that efforts by the Caribbean Tourism Organization, a group of Caribbean citizens, living in the UK and backed by the Prime Minister as well as the Tourism Minister, are finally meeting with some success. The UK government may finally be rethinking their much-maligned tax plan, at least in regards to the Caribbean.

The CTO is pleased with their new found political power since it represents the first time the opinion of the Caribbean people living in the UK has been given any weight whatsoever.

“If encouraged, and directed, this can bring benefit to the Caribbean on issues that matter to the region,” said Davis Jessop Chairman of CTO.

It has widely been reported that the tax increase is based upon the distance a passenger flies, but in fact the tax will be based upon the distance between London and the capital city of the destination country.

The astute members of the CTO are pointing out that the tax on a flight from London to Hawaii works out cheaper than the tax from London to the Caribbean because the tax to Hawaii is based the distance from London to Washington, DC even though the actual flight distance is much greater.

Thanks to www.jamaicaobserver.com for the above quote. For more information on this article visit their website.

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Celebrity Equinox cruise ship inaugurated

Wednesday, July 22nd, 2009

The Celebrity Equinox cruise ship sailed into Southampton this week in preparation for the ship’s inaugural celebrations.  The cruise ship is the first and only such vessel launching out of the UK this year amidst the worldwide economic downturn.  Royal Caribbean, the owners of the ship, spent more than £700 million constructing the ship.

“For the UK to be hosting the inaugural celebrations of Celebrity Equinox demonstrates the importance of the British and Irish markets. The reaction of UK consumers in terms of bookings is strong with sailings during all peak holiday periods sold out.” said Royal Caribbean spokesperson, Robin Shaw.

The ship has an opulent layout highlighted by an actual grass lawn on the upper deck, where passengers can enjoy bocce and croquet.  The lawn is immense and can also be used for viewing outdoor concerts.  The ship is the first of its kind to feature such a lawn.

In addition to the lawn, the ship has numerous restaurants and bars, swimming pools, and a fully staffed gambling casino, where passengers can enjoy blackjack, roulette, slot machines, and other forms of gaming.

The ship is also innovative in that it uses solar power to operate the onboard passenger elevators.

The maiden voyage is scheduled for July 31st when the ship heads to Norway for an eight-day cruise through the fjords.

Thanks to www.telegraph.co.uk for the above quote.  For more information about this article, visit their web site.

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Tourism in Wales increases

Tuesday, July 21st, 2009

Despite the economic downturn, Wales is experiencing an increase in the number of tourists visiting the region.  Wales defied the gloomy travel industry trend by seeing approximately 113,000 more visitors last year than it did in 2007.  In so doing, it became the only part of the UK to experience rising numbers.

A spokesman for Visit Wales commented, “Holidays are changing, and more people are waking up to the fact that holidays in Wales can offer a real alternative to the formulaic packaged holiday. People are now looking for real value and authentic quality. Wales can offer a truer, richer, deeper, experience where people can get involved in the local history and culture and landscape.”

The cultural center of Cardiff, the capital of Wales, is becoming one of the most popular destinations in the country and recently was added to the list of Britain’s top 10 tourism cities supplanting Brighton and Hove.

Visitors are also attracted to Wales by the 641 castles scattered throughout the countryside, the most famous being Harlech, Caerphilly, and Caernarfon, which receive thousands of holidaymakers every year. Other attractions include the national parks of Brecon Beacons, Pembrokeshire Coast, and Snowdonia.

While Wales was busy increasing tourism, Scotland on the other hand, saw a marked decrease in visitor numbers.  Scotland lost more than 300,000 visitors last year.

Thanks to www.telegraph.co.uk for the above quote. For more information on this story please visit their website.

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Car hire shortage reported in Spain

Monday, July 20th, 2009

Holidaymakers traveling to Spain are facing a severe shortage of hire cars, as well as inflated prices. In many cases, there is a complete lack of rental cars altogether.

Hard hit by the recession, car hire companies are cutting back on operating costs and reducing the size of their fleets.  Holidaymakers have reported difficulty in finding cars in Malaga, Murcia, and Alicante. During crowded holiday weekends such as Easter and May Day, it has been next to impossible to find a hire car.

The shortage is expected to continue through the summer. Travelers are advised to book car rental early and expect to pay higher prices.
The shortage is being blamed on the credit crunch. Car hire companies have been unable to obtain credit to buy new fleet cars. Some companies have had to sell off some of their fleet to pay back old loans.

Other companies began reducing their fleets at the start of the recession when visitor numbers began to drop.

“This has meant that there is less oversupply of cars in non-peak months such as June. However, in peak months such as July and August there is now a clear shortage of cars,” according to Bob Atkinson of Travelsupermarket.com.

Holidaymakers have reported that car rental prices have doubled in some locations.

Thanks to www.guardian.co.ukor the above quote.  For more information about this article visit their web site

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