The ‘Margaritaville’ Experience is a State of Mind

“Margaritaville, with its themed restaurants (erupting volcanoes, boat-shaped booths), started as a tropical cousin to T.G.I. Friday’s,” The New York Times reports. “Through trial and error, Jimmy Buffett and a partner, John Cohlan, have since expanded Margaritaville Holdings to include four booming divisions: lodging, alcohol, licensing and media. Now, as they pursue growth for the first time overseas … they are trying to recast Margaritaville as a broad, aspirational brand — the Ralph Lauren of leisurely escape, if you will.”

“The stroke of genius was making Margaritaville a feeling, not a place,” said Mindy Grossman, the chief executive of the home-shopping behemoths HSN and Frontgate, where 400-plus Margaritaville items include a $799 hammock and $159 penny loafers. “If you don’t take the name so literally, growth could be endless.”

Margaritaville is “building a unique corporate culture — employees all use the same valediction in emails: ‘Fins Up!’ — and drawing fanatic customers like Carol and Butch Wayland … ‘We’re not Parrot Heads,’ Mrs. Wayland said. ‘We’re just normal, everyday people who happen to be residents of the Margaritaville state of mind.’ Mrs. Wayland, who is in her 50s, added that she had ‘spent a fortune’ on Margaritaville products, including hats, flip-flops, dress shirts, shorts, clocks, coffee mugs, barware, a blender and underwear.”

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Nickels & Dimes Keep Airfares Low

“Air travelers love to gripe about fees: $25 to check a bag; $34 for early boarding; $129 for a few more inches of legroom,” writes Rafi Mohammed in The Wall Street Journal. “The challenge for this kind of model is managing perceptions … Customers may feel nickeled and dimed, but the a la carte model gives them the option to save money. Theoretically airlines could bake the cost of amenities into the base fare and then offer ‘discounts’ for giving them up. But that isn’t intuitive: Take $9.95 off if you don’t use in-flight Wi-Fi?”

“American Airlines recently charged $22 for ‘preferred’ seating in the front of the cabin—but with no added legroom. Internet access on some flights costs $40. Is this gouging? No, travelers who pay for these extras are subsidizing low fares for the rest.”

“In 2014 airlines generated $38 billion in ancillary revenue, according to a study by IdeaWorks. That money keeps base fares low. And airline profits are far from outrageous. The average net margin for all scheduled U.S. carriers was 4.4% in 2014. Even in the first three quarters of 2015, after oil prices had plummeted, the average net margin was only 14%.”

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Airlines & Flyers View Prices Differently

The Wall Street Journal: “American, Delta and United have new pricing rules that could easily raise the cost of many trips. Think of it as making a six-pack of soda twice as expensive as buying six cans individually.” For example: “For a May 4 trip from Chicago to Des Moines, Iowa, with a May 5 return flight from Kansas City, Mo., back to Chicago, American offers a fare of $522. But if you buy those flights individually, you’d spend $107 to get to Des Moines, then $65 to fly from Kansas City to Chicago, or a total of $172.”

“Airlines look at pricing through a different lens from their customers. Instead of adding up the fare from each flight on a trip, airlines look at each starting point-to-destination trip as its own market. Airlines want the ability to set pricing for a Kansas City-Honolulu trip as a unique product, not simply the sum of flights from Kansas City to Los Angeles and Los Angeles to Honolulu.”

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Virgin-Alaska: Passion vs. Performance

The New York Times: The Alaska Airlines takeover of Virgin America may test whether passion or performance is paramount when it comes to creating customer loyalty. “Although Alaska has been a perennial leader in best-airline rankings, its allure comes more from its reliability than mood lighting or funny safety videos. Like Virgin America, it inspires loyalty among customers, if not the same passion.”

However, travel industry analyst Henry Harteveldt thinks Virgin America “failed to capitalize on its San Francisco hub or to build on its early innovations … The airline compensated for its financial losses by cutting flights in recent years, even as it added routes to Hawaii and elsewhere. While passengers may love the ambience of a Virgin flight, they love the ability to get where they are going more.”

“The combination of hip and practical could give the new company a competitive advantage, Mr. Harteveldt said. The smartest thing Alaska could do … would be to combine the characteristics that have made each airline popular.”

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Connie: Hilton’s Concierge Robot

“Concierge is getting a robotic makeover at one Hilton Hotels location,” reports The Christian Science Monitor. “The McLean, Va., Hilton is the site of a pilot program featuring a robot concierge. The new hire stands in at two-and-a-half feet tall and has been placed on the desk beside human reception staff. More than just a shiny piece of equipment, the robot’s brain is packed with artificial intelligence.”

“Connie, named after Hilton founder Conrad Hilton, is a partnership between Hilton Worldwide and IBM. The brains behind the robot are IBM’s artificial intelligence program Watson and another partner program called WayBlazer, imbuing the new concierge with enough AI to carry on conversations with guests and answer questions about the local area.”

“Connie’s body, though small, is also designed to help it serve. The body is based on the Nao robot designed by Aldebaran, with fully functional arms and legs and eyes that change to express humanlike emotions … Is the future of Hilton concierge robotic? Definitely not, according to Jim Holthouser, Hilton vice president of global brands.”

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Ryanair & The Value of Being Nicer

The Wall Street Journal: Ryanair CEO Michael O’Leary “once defended Ryanair’s €70 (about $75) penalty fee for passengers who show up at the airport without a boarding pass, saying they were “being so stupid.” … He has in the past proposed a standing-room only cabin and a charge of one British pound (about $1.41) for using the in-flight toilet … The no-frills model, once novel but now widely mimicked, turned the 32-year-old Ryanair into Europe’s second-biggest airline by passengers flown.”

“In 2013, a price war with full-service carriers and upstart budget airlines alike threatened that success … To win back customers, Mr. O’Leary relaxed onerous hand-luggage restrictions and redesigned Ryanair’s cumbersome website. It cut fees and told staff to be less confrontational. The airline also made headlines by dropping its trademark bugle call, which it blasted through cabins each time a flight arrived on time. The practice, amusing at first, had started to annoy passengers.”

“’Standing room only and charging for toilets was a great PR wheeze when we were young, dumb and growing rapidly,’ Mr. O’Leary said in an interview. But after rivals started painting the moves as cheap and nasty, ‘the laddish noise was displacing the great fares, brilliant punctuality and new aircraft,’ he said. ‘If I had only known that being nicer to our customers was good for business I would have done it years ago,’ Mr. O’Leary says.”

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Unbound Collection: Hyatt & The ‘Anti-Hotel’

“The Unbound Collection is a curated list of what Hyatt calls ‘stays,’ which for now means boutique hotels that are co-branded with Hyatt,” Fast Company reports. The short list includes Austin’s haunted hobnobbing space, the Driskill, and a restoration of the Hawaiian resort made famous by Elvis Presley, Coco Palms. These hotels will both advertise and operate as themselves, but they’re presented in marketing as ‘by Hyatt.’ The hotels pay a percentage of their revenue to be involved, while Hyatt offers them a customer base, a booking back end, and the sort of purchasing power a business the size of Hyatt can get.”

Maryam Banikarim, CMO at Hyatt: “What you’re seeing is the idea of travel has changed, and people want to explore and develop and have new experiences. On the flipside, they are creatures of habit—human nature wants things that are familiar.”

“For now, the ‘stays’ Hyatt is offering will take the form of boutique hotels … But in the future, the Unbound Collection will be a place where Hyatt can experiment with its own identity in the travel experience. ‘We’re not limiting ourselves just to hotels,’ Banikarim says … So while Hyatt is bullish on expanding outside of conventional hotel stays, it’s not renting out single-family homes just yet. But ‘a river cruise down the Nile?’ Banikarim suggests. That’s a distinct possibility.”

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Hotels: Where The Bedbugs Bite

“The worst hotel experiences can be caused by an insect smaller than a fingernail clipping,” The New York Times reports. Bedbugs “are causing headaches for hotel owners who not only have to figure out how to get rid of them, but also now have to respond to online accusations of bedbug infestations … those complaints have high stakes for hotels. A University of Kentucky survey of nearly 2,100 travelers in the United States found that a single recent review that mentions bedbugs lowers hotel room values by $38 for business travelers and $23 for leisure travelers.”

“There is no national data on bedbug complaints at hotels, but exterminators around the country report a growing problem. In Houston, Phoenix and St. Louis, for example, exterminators have reported recent increases in bedbug infestations, many of them in hotels. And nearly two-thirds of exterminators in the United States polled by the University of Kentucky and the National Pest Management Association last year said bedbug complaints were increasing.”

“Experts suggest that travelers check hotel beds thoroughly before sleeping and that they keep luggage in the bathtub to prevent the bugs from coming home with them. And storing luggage in plastic bags between trips can prevent travelers with home infestations from bringing bedbugs with them to a hotel … In addition to complaining about bedbugs on Twitter and sites like TripAdvisor and Expedia, travelers use more specific sites like the Bedbug Registry.”

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Routehappy Scores Flights on the Experience

Routehappy has found a business in scoring air-travel options when you shop for tickets,” The Wall Street Journal reports. Routehappy’s website ranks flights by specific scores that compare not just prices but onboard amenities. It even compares different flights on the same route offered by the same airline.”

“Routehappy has eight attributes that it tracks for each flight offered for sale by 225 airlines: aircraft, seat, cabin layout, entertainment, Wi-Fi, fresh food, power outlets and duration. The criteria weigh basics like legroom and often overlooked but important factors like seat width … seat and duration are the biggest factors in a score.”

“More factors are coming—likely on-time performance will be the next to be included … though finding accurate information about flights is a challenge because airlines routinely change flight numbers. Routehappy also hopes to someday let users pick what’s most important to them and customize scores.”

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