Today’s edition of Skift’s daily podcast talks about Hilton’s post-Covid plans for China, Alaska Air’s new subscription flying program, and AirAsia’s air taxi investment.
Here’s what you need to know about the business of travel today.
A surge in Covid cases drove China to enact further travel restrictions. One big result? The country’s hotel performance took a nosedive in recent months. But struggles in China aren’t deterring Hilton executives from doubling down on their growth plans in the country, writes Hospitality Reporter Cameron Sperance.
Hilton’s revenue per available room — the hotel industry’s key performance metric — was down in China 24 percent in the fourth quarter of 2021 compared to the same period two years prior. However, chief financial officer Kevin Jacobs said that approvals to build new hotels in the country were up 45 percent last year from 2020 while openings had increased 30 percent. Hilton accounted for the largest share of China’s hotel development pipeline at the end of last year, according to some industry estimates.
CEO Christoper Nassetta said he sees enormous growth potential in China, especially as he envisions the country easing travel restrictions due to economic and cultural pressure it will face to open up to foreign visitors.
Next, more companies in the travel industry are turning to subscription models to drive business, a growing trend Skift has highlighted in the past, and Alaska Airlines has become the latest carrier to adopt the practice, reports Senior Travel Tech Editor Sean O’Neill.
Alaska Airlines started selling pay-as-you-go passes on Wednesday as part of its subscription model, in which travelers who pay a monthly fee will receive credits to fly a fixed number of roundtrips among 16 U.S. West Coast airports. Subscribers can fly on routes within California or between the state and Phoenix or Reno, Nevada. An Alaska Airlines executive told Skift the company designed the product to suit its California guests as its data revealed that more people travel within California than within any other state.
The company joins a list of carriers including United Airlines that have launched subscription models. Researchers at UBS Bank project the subscription economy to hit $1.5 trillion in sales by 2025.
We end today with AirAsia beefing up its ridesharing platform. The carrier has placed an order for up to 100 electric air taxis for its new service, writes Madhu Unnikrishnan, editor of Airline Weekly, a Skift brand.
AirAsia has signed a memorandum of understanding with lessor Avolon for the aircraft, which the carrier will allow passengers to book flights on via AirAsia Ride, a platform that launched last year in Malaysia. Upon announcing the deal with Avolon, AirAsia CEO Tony Fernandes did not offer a firm timeline for electric air taxis to join his company’s fleet but said they are expected to be in service by 2025.
Electric air taxis have become increasingly appealing to airlines due to the aircraft’s ability to connect hub airports with smaller markets more sustainably and at a greater profit than with a regional jet.
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