Welcome to the September 2009 Issue of Travology Today

Directravel is pleased to announce that it is participating in the Juvenile Diabetes Research Foundation’s (JDRF) Walk to Cure Diabetes. Held on Sunday, October 18, in Franklin Lakes, New Jersey, this will be the third year that Directravel has put together a team of walkers and a commitment to fundraising for this worthy cause.

Thanks in part to JDRF, researchers feel that a cure is in sight. JDRF has funded much of the groundbreaking research conducted thus far. In fact, JDRF is the largest private funder of diabetes research in the world. In a typical year, more than 85% of every dollar raised by JDRF reaches the cause, earning an A rating for efficiency from the American Institute of Philanthropy.

If you are local and would like to join us for the walk, please register under Team Directravel at www.jdrf.org. Otherwise, please feel free to check out the site for a walk location near you.

Businesses can realize more than $15 in revenue for every $1 spent on business travel, according to a study by IHS Global Insight, the world's leading company for economic and financial analysis and forecasting. The groundbreaking research shows that companies are potentially losing out on nearly $200 billion in 2009 in additional gross profits because they are not optimizing their investments in strategic business travel.

The IHS Global Insight study was conducted on behalf of the National Business Travel Association (NBTA), the premier organization representing professionals in the business travel industry. The report “Can We Afford Not to Invest in Business Travel?,” published this month expands upon findings previewed last month at the NBTA International Convention & Exposition and is part of a comprehensive business travel research initiative.

The analysis shows a clear link between travel spending and corporate profits, with the return on investment varying across the 15 industries examined. The study also illustrates that for each industry there is a point at which increasing business travel spending begins to cut into profits.

"Face-to-face client meetings and trade shows remain the primary tools for increasing sales, yet many companies view business travel as an expense to be cut rather than the rewarding investment it is," said John Larson, Managing Director of Decision Analytics and Economic Impact Analysis at IHS Global Insight.

NBTA Research Consultant Kenneth McGill added, "Executives know from experience that travel facilitates the types of exchanges that help keep clients, gain new business, and make employees more effective, but making the business case for travel has been challenging without supporting data. Now for the first time the discussions around travel budgets will be informed with research establishing the link between business travel and profits."

Among the study's key findings:

Business Travel Contributes to Sales: A significant and measurable relationship exists between business travel expenditures and sales volumes.

Sizeable Returns on Investment: An average return on business travel investment of 15-to-1.

Returns on Investment Vary by Industry: Returns on investment vary across each of the 15 industry segments in the study.

$193 billion in Profits at Stake: Companies within most industry segments are not operating at optimal travel expenditure levels and collectively could realize $193 billion in additional profits.

Massive Stimulative Effect on the U.S. Economy: Increasing travel expenditures to optimal levels could create 5.1 million new jobs, generating more than $101 billion in tax revenue.

The study examines 10 years of data for 15 industry sectors covering the U.S. economy, analyzing industry-level data on business travel, business expenses, revenues and profitability in order to establish a link between business travel and corporate profits.

In 2008, U.S. businesses spent $261 billion on travel expenses. Using a model that comprehensively examines both industry sales and cost determinants, including business travel expenditures, the analysis identifies optimal levels of business travel investment for the U.S. economy as a whole and by the 15 industry segments. The research found that nearly all industries are currently spending below their optimal threshold for business travel and, on average, some industries could increase travel expenditures by as much as 3.0%, while others would require a more modest increase of 0.5% in order to approach optimal levels.

An Executive Summary of the study can be found by clicking here.

PricewaterhouseCoopers’ updated US lodging forecast reflects improved economic conditions and a resumption of economic growth in the second half of 2009. While occupancy levels and average daily rates (ADR) in the second half of 2009 are expected to remain below year ago levels, resulting in a 16.1 percent decrease in room revenue per available room (RevPAR) in 2009, PricewaterhouseCoopers expects that average daily rates (ADR) will continue to decline in 2010. This rate weakness is expected to be off-set by a 1.1 percent increase in occupancy, resulting in stable RevPAR levels in 2010.

PricewaterhouseCoopers' quarterly lodging forecast is based on updated macro-economic forecasts from Macroeconomic Advisers, LLC. After a substantial 6.4 percent decline in the first quarter of 2009, following a 5.4 percent decline in the fourth quarter of last year, real gross domestic product ("GDP") declined at an annualized pace of 1.0 percent in the second quarter of 2009, consistent with an expected turning point in the US economy. Macroeconomic Advisers LLC estimates that the US economy troughed in June 2009 and forecasts slightly above long-term trend growth in GDP during the third and fourth quarters of 2009. As a result, GDP is expected to decline at an annualized pace of 2.6 percent in 2009, followed by a 3.1 percent increase in 2010.

According to PricewaterhouseCoopers' current lodging forecast, lodging demand in the third and fourth quarters is forecast to be 4.0 percent and 0.5 percent below last year's levels, respectively, resulting in an annual decline of 5.3 percent in 2009. The year-over-year comparison in the fourth quarter of 2009 reflects the one-year anniversary of the abrupt decline in lodging demand which occurred during the fourth quarter of 2008. A deceleration of lodging supply growth is expected to result in an annual lodging supply increase of 2.4 percent in 2009. Despite slowing supply growth, this supply-demand imbalance is expected to compress occupancy levels by 8.0 percent in 2009, resulting in an average annual occupancy level of 55.5 percent. Although the economy is expected to gradually improve in the second half of the year, ADR levels are expected to continue to be compressed, resulting in an 8.7 percent decline in ADR and a 16.1 percent decrease in RevPAR in 2009. Hotels in the Luxury and Upper Upscale Chain Scale segments are expected to experience greater declines in RevPAR, due to continued pricing pressure primarily from both larger corporate accounts and meetings.

In 2010, as the US economy grows at an above-trend rate, RevPAR is forecast to remain stable, driven primarily by a 1.1 percent increase in occupancy, as increasing demand and slowing supply growth are expected to increase the average annual occupancy level to 56.1 percent in 2010. Despite increasing demand, hotels, particularly in higher-priced chain scales, are expected to continue to face pricing pressures, resulting in a further 1.1 percent decrease in ADR.

PricewaterhouseCoopers continues to monitor the pricing strategies and yield management decisions adopted by lodging operators. While the beginning of the recovery for hotels is expected to be primarily demand driven, as the recovery gains momentum, rate strategies implemented by hotels will have an increasingly important role in the magnitude and speed of this recovery.

For more information, click here.

The Transportation Security Administration (TSA) announced this month it is further bolstering existing explosives detection capabilities by deploying additional tools to screen powdered substances at checkpoints.

"Every day, TSA officers work at over 450 airports nationwide screening approximately 2 million passengers to keep the traveling public safe," said TSA Acting Administrator Gale Rossides. "These enhancements are part of TSA's efforts to stay ahead of emerging threats while continually strengthening our layered approach to security."

Transportation Security Officers (TSOs) are experienced in identifying items that may pose a threat to transportation security utilizing explosives detection tools. TSA knows certain powders could be used in improvised explosive devices. While there is no specific threat at this time, TSA is deploying powder explosives detection kits to airports around the country to enhance our existing explosives detection capabilities and further strengthen our layers of security. TSA piloted these kits in late 2008.

Passengers should know that while common powders are not prohibited, a small percentage may require additional screening. Typical security checkpoint procedures will remain the same. The vast majority of commonly carried powders, like most medication, infant formula and makeup, are unlikely to need further screening.

Officers will use X-ray technology to determine which substances may require additional screening with a powder test kit. If the substance does require additional screening, officers will use a powder test kit to collect a small sample and apply a solution to it to test for traces of potential explosives. If a particular powder is determined to be a potential threat, it will not be permitted into the secure area or checked baggage.

Why is TSA testing powders?

TSA knows that chemical powders may be used to create improvised explosive devices. By further bolstering explosives detection capabilities, TSA is strengthening layers of security to help mitigate risk and keep the traveling public safe.

For more information about TSA, visit www.tsa.gov.

The International Air Transport Association (IATA) presented its proposals for December’s climate change talks to the UN Secretary General’s Summit on Climate Change in New York. The forum takes place in the run-up to the United Nations Framework Convention on Climate Change (UNFCCC) meeting in Copenhagen this December. The aviation sector is united in calling on world leaders to retain a global sectoral approach to reducing aviation emissions under the leadership of the International Civil Aviation Organization (ICAO), working in cooperation with the sector through IATA.

“Climate change is a global problem. Aviation is a global industry. And we need a global approach for this industrial sector if we are to deal with climate change effectively,” said Giovanni Bisignani, IATA’s Director General and CEO.

“Mechanisms designed for ground-based polluters will not work effectively for aviation which can emit CO2 across borders and over the high seas even on a single flight. And already uncoordinated national and regional schemes are creating a patchwork of punitive taxes that fill government coffers, but do little or nothing to effectively manage aviation’s emissions,” said Bisignani.

The aviation industry presented a paper outlining the industry’s commitment to three sequential targets.

1. Improving carbon efficiency with a 1.5% average annual improvement in fuel efficiency to 2020
2. Stabilizing emissions with carbon-neutral growth from 2020
3. Emissions reductions with a 50% absolute cut in emissions by 2050 compared to 2005

“Our targets are tough. Air transport is the first industry to commit to carbon-neutral growth at the global level. And we have done it with an aggressive timeline of 2020. Our four-pillar strategy of technology investment, efficient infrastructure, effective operations and positive economic measures will make our vision a reality and is already showing results. Aviation’s emissions are expected to fall 7% in 2009 - 5% as a result of the recession and 2% directly related to the strategy. IATA’s ‘Green Teams’ have saved 34 million tonnes of CO2 through operational efficiencies since 2005; our work on improving infrastructure, including shortening air routes, has saved a similar amount of CO2 since 2004. But our success depends on governments playing their part. They must implement more effective air traffic management: the introduction of NextGen air traffic management in the USA and the Single European Sky in Europe have the potential to save 41 million tonnes of CO2 annually. Governments must also create the legal and fiscal framework to support the development of sustainable biofuels for aviation,” said Bisignani.

The paper also outlined guiding principles to ensure that the global sectoral approach results in emissions reductions, retains funds for investment in environmental initiatives for aviation, preserves a level playing field, provides access to global carbon markets and ensures that airlines cover the environmental cost of their emissions.

For more information, click here.

American Airlines will roll out the Transportation Security Administration's (TSA) new Secure Flight program to customers who purchase tickets on or after Sept. 15, 2009. Secure Flight is a behind-the-scenes program that streamlines the TSA's watch-list matching process to enhance the security of domestic and international commercial air travel. … Continental Airlines announced changes to its OnePass( )frequent flyer program, adding new benefits for its customers. Some of the changes will occur in conjunction with the airline joining Star Alliance on Oct. 27, 2009…Continental's OnePass members will enjoy reciprocal mileage earning and redemption opportunities with Star Alliance's 24 member airlines and will be able to connect to more than 950 cities all over the world. … Budget Travel magazine has named Delta a winner of its 2009 Extra Mile Awards in recognition of its Red Coat program. The magazine’s Extra Mile Awards recognize and celebrate companies and destinations that take extra steps to make travel easier and more affordable… Starting in December, passengers traveling in Economy Class on all intercontinental flights operated by KLM Royal Dutch Airlines can choose seats offering greater comfort. The new Economy Comfort zone offers up to 3.9 inches more legroom and back supports that can recline twice as far. … US Airways offers business class travelers the ultimate in comfort, peace and privacy on trans-Atlantic flights with the new Envoy Suite. Starting this November, the airline will begin installing fully lie-flat business-class seats with an advanced on-demand in-flight entertainment system on its fleet of Airbus wide-body aircraft.

in July '09 decreased to 77.6%, down 1.5 points vs. the running 12 month average of 79.1% but up 1.5 points from June’s 76.1%. To view the USDOT's Bureau of Transportation Statistics' (BTS) Air Travel Consumer Report, click here.

The United States Government has posted recent travel advisories and warnings for Afghanistan, Algeria, Burundi, Central African Republic, Chad, Cote d’lvoire, Democratic Republic of the Congo, Eritrea, Georgia, Haiti, Iran, Iraq, Israel, the West Bank and Gaza, Kenya, Lebanon, Mali, Nepal, Nigeria, Pakistan, Philippines, Saudi Arabia, Sri Lanka, Sudan, Syria, Uzbekistan and Yemen.