Islands in the Stream

It's not a good time to be an island. The tourism industries of both Hawaii and the Caribbean are quaking in their boots given recent developments in the airline industry. With fuel prices skyrocketing, and with carriers cutting back on service to vacation destinations, islands, which can't depend on a drive market to pick up the tourism slack, are left treading water.

American Airlines recently announced plans to cut flights to the Caribbean by about one-third. The cuts go into effect in early September. Given that American is the chief source of air traffic to the Caribbean, this development has the potential to create a swath of economic destruction across the tourism-dependent region. The biggest cutbacks are taking place in Puerto Rico, American's Caribbean hub. Daily flights to San Juan from the mainland are being cut from 38 to 18. Among the routes being cut entirely--San Juan-Washington Dulles, San Juan-BWI, and San Juan-Newark. Meanwhile, American Eagle flights out of Puerto Rico to other islands are being shaved to 33 from 55.

Some of the Caribbean islands are trying to fight back. Creating a regional strategy will be on the agenda at the inaugural Annual Caribbean Tourism Summit in Washington, DC from June 21-24. Additionally, individual countries are getting proactive. Tourism concerns in the U.S. Virgin Islands are banding together to intensify marketing in the effort to increase demand for flights. By doing so, they hope to negotiate with low-cost carriers such as Jet Blue and Southwest to bring service to the area.

There is one shot of good news, if you want to call it that, for the U.S. Virgin Islands. It looks like American Airlines will agree to exempt boxes of duty-free liquor from the new checked baggage charge. Woo-hoo.

State of the Union

Hawaii has its own challenges. Even though it's a state, Hawaii often is considered foreign territory in the airline world. You need to redeem more frequent flyer points to get there than to any other U.S. destination. US Airways is lumping Hawaii in with international destinations when it comes to charging fees for frequent flyer point redemption (see 6/16 post). There's been some cutback in service from mainland carriers and the state has suffered heavily from the bankruptcies of Aloha and ATA. Furthermore, Hawaii, which already has the most expensive gasoline prices in the nation, has the highest airline fuel surcharges as well. Hawaiian Airlines just increased its round-trip surcharge to $120 on flights from the West Coast (the surcharge charged by most carriers on mainland routes is $20).

The Hawai'i Visitors and Convention Bureau has launched a $3 million marketing campaign to entice North Americans to take their summer vacations in the state. Airfare-inclusive packages, with savings from $200 to $1000, have been created. Visit www.gohawaii.com for details. Still, whether that will be enough to convince cash-pinched travelers to say Aloha to Hawaii is a big question mark.

Fee-Fi-Fo-Fum

So you've figured out how to get all of your stuff in a carry-on bag to avoid the new checked luggage fees. You've brought your own nibbles to prevent the need to buy on board. You've even booked your flight months in advance to avoid fuel surcharges. Guess what, dude? You're still going to have to reach into your wallet as airlines come up with increasingly annoying ways to nickel and dime you.

To wit, US Airways is going to charge two bucks a pop for soda and other non-alcoholic beverages starting August 1. As to not offend the teetotalers, alcoholic drinks will go up from $5 to $7. US Airways is coming up with other creative ways to make money (sure to be followed by the other carriers). Starting August 6, the airline will charge a new "award redemption processing fee" for all frequent-flyer tickets. Mileage tickets in the continental United States and Canada will cost $25. Flights to Mexico and the Caribbean will cost $35, and flights to Hawaii or to international destinations outside of North America will cost $50. But at least there's some egalitarianism in US Airways' policy. The carrier will no longer award bonus miles on paid flights flown by its elite frequent-flier members.

Complain about fees now, but be warned. There will be more of them, and ticket prices are likely to go sky-high after Labor Day. That's when high-demand, non-discretionary business travel makes a comeback, and when the airlines start paring their fleets. As any student of Economics knows, when supply and demand are going in opposite directions, something's got to give. And that something is low airline ticket prices.

The Exchange Game

To follow up on a previous post regarding exchanging money overseas...

I just received my latest bank and credit card statements from my monthlong trip to Europe. My credit card company charged a three percent "exchange transaction" fee on every charge. Meantime, Bank of America charged $5.00 for every ATM withdrawal. The banks whose ATMs I used in Scandinavia and Hungary charged about $1 per withdrawal, while the Albanian bank charged nothing.

So, depending on the amount I withdrew from the ATM, my overall transaction fee ranged from three to eight percent. However, given BOA's new policy, starting June 1, that an additional three percent fee (based on the dollar amount withdrawn) will be charged makes ATM withdrawals exponentially more expensive. My advice: Stick to credit card transactions whenever possible, and look for both credit card companies and banks that offer low international transaction fees.

Europe on a Budget?

Europe is expensive. No doubt about it. I recently returned from a monthlong stay on the Continent and have some thoughts about how you can actually make your puny dollar stretch a bit further.

First off, ponder the place you will visit. I went to four countries. Alphabetically, they were Albania, Denmark, Hungary and Sweden. Expense-wise, from cheapest to most expensive, the order changes to Albania, Hungary, Sweden, Denmark.

Yep, if you want to do Europe cheap, visit Albania. No, it's not inexpensive to get to, but once you're there, accommodations (such as they are) and food, are cheap. Of course, it's not easy to get around the country, and getting to the places that are of major interest (Butrint, Saranda, Gjirokastra) is nearly impossible. But accommodations and food are cheap. For a country that's a bit more accessible, albeit a bit more expensive, there's Hungary. A stay at the charming Hotel Gerlozcy in the heart of the city, just footsteps from Vorosmarty Square, runs about $125 a night. The Mercure Metropol, located on one of the city's main boulevards, is only $108 per night, with a full breakfast included. With a Budapest Card ($41 for two days; $50 for three days), most major sights and public transportation are free. And food can be had for reasonable prices.

Not so in Scandinavia. Everything is out of sight in Denmark and Sweden. A few years ago, one dollar bought 13 Swedish kroner. Now, it buys six. In Denmark, the exchange is five Danish kroner to the dollar. What does five kroner buy you? Maybe a stale Danish at the low-cost Netto grocery store.

But don't give up on the Continent. Aside from lower-cost destinations like Albania, Hungary, Romania or Bulgaria, there are other ways to save, no matter what country you are visiting.

1. Friend-hop. If you have friends living in Europe, now is the time to visit them. Don't have friends on the Continent? Get some. There are several homestay organizations that arrange for overnight visits (of course, you have to be willing to reciprocate). Two of the biggies are The Hospitality Club (www.hospitalityclub.org) and SERVAS (www.servas.org).

2. Find lodging that includes breakfast. Eat a lot. Then, have lunch later in the afternoon and make it your main meal of the day. Restaurants often charge much less for lunch than for dinner.

3. Stay at a place that has a kitchen, or, at the very least, an in-room fridge. Then, go grocery shopping. Stock up on snacks and items like bread, cheese, and yogurt that can serve as mini-meals.

4. Buy a multi-day or multi-ride pass for public transportation. In Denmark, a single ride on the Metro cost $5.00. Buying a card for 10 passes brought the per ride cost down to $2.50. Almost every city that has a subway system offers special passes.

5. Similarly, if you plan to do a lot of sightseeing, check to see if the local tourism bureau offers a special pass. In Denmark, the Copenhagen Card provides free entrance to scores of attractions, plus free rides on all public transportation, and restaurant discounts. It's $42 for one day and $88 for three days. In Sweden, the Stockholm Card offers free entry to 75 attractions, free travel by public transport, free sightseeing by boat, and other goodies. A one-day pass costs approximately $55. Two days cost $77 and three $97. Both cards offer discounted rates for children.

6. Looking for the best exchange rate? Use plastic. Your credit card will give you the most for your money. I used to recommend use of the ATM as the best way to get cash. Certainly, the commission rates changed at Bureaux de Change are a rip-off. And changing money at banks can be inconvenient and laborious. But I've got to tell you, while convenient, the money-saving appeal of the ATM is diminishing. Banks just keep adding on fees on ATM transactions. There's the fee you are charged by your bank to use an out-of-network ATM. That can be $5 a pop. There's the fee charged by the local bank. That's wrapped up in the exchange rate, so you never quite know what that is. Just this month, Bank of America has decided to charge an extra three percent of all foreign transactions. So, in addition to the ATM usage fee, you will pay another $3 for a $100 withdrawal; $15 for a $500 withdrawal. Nice, huh?

7. Check into Europe's low-cost carriers. There are some good ones. Of course, Ryanair nickel and dimes you for everything from beverages to bag, but the base fee is worth it. Scandinavia's Sterling is a real gem. If you book far enough out, it's really cheap. A one-way trip from Copenhagen to Stockholm booked 30 days out costs $52. And that includes the extra two percent charge Danish companies and websites charge for using non-Denmark issued credit cards. I'll admit, the first time I booked on Sterling, I was confused by the extra charge to book a seat. After all, one would expect that when you buy a ticket, you buy a seat. My confusion was cleared up the second time I booked on Sterling. You can buy a seat with extra legroom or you can buy a regular seat or, for free, you can leave seat selection to chance. I did the latter on the return flight from Stockholm to Copenhagen and was quite happy with my free window seat near the front of the plane.

8. Wait. What goes up must come down. And at some point, the dollar will regain its strength. In the meantime, if you are hankering to go elsewhere overseas for cheap, consider destinations in South America and Asia

Model Behavior

Were it not for the fact that a certain lovely, leggy supermodel is known for her regular outbursts at underlings and others, some might be sympathetic to the recent case of one Ms. Naomi Campbell. The tempestuous beauty, you see, was arrested last week when her luggage, checked in for a flight out of the now equally-infamous Heathrow Terminal 5, went AWOL. Apparently, she threw a fit with airline staff upon learning one of her fashion-filled bags failed to make it onto an L.A.-bound plane. Who among us wouldn't have loved to throw a similar fit? Anyway, the long and short of it--police officers had to board the plane to quell the disturbance. At that point, Ms. Campbell allegedly spit on the officers and had a nasty word or two to share. Okay, most among us wouldn't do that. Soon thereafter, she was led away sporting that popular fashion accessory--a set of silvery handcuffs.

Given that thousands of passengers have now experienced the same fate (missed baggage, not the ability to strut down the catwalk to the tune of millions of dollars), one might say Ms. Campbell's rant gave a public face to the feelings of many. However, given Ms. Campbell's ego and her police record (she recently spent five days mopping floors in New York as part of a community service sentence after throwing a cell phone at her housekeeper during an argument over a pair of jeans), it is more likely that she thought she could get away with such behavior....unlike the thousands of other peons who would liked to have yelled or thrown a cell phone at someone...but somehow managed, in a very British way....to restrain themselves.

Speaking of models behaving badly, let's talk Kate Moss for a minute. No, she hasn't caused any ruckuses that I know of, nor has she snorted any cocaine lately....well, at least not on tape. Not that the latter has turned out to be a bad career move. Even though a couple of advertisers dropped her after said tape became public, she appears to be doing better than ever. Ms. Moss is featured on at least 20 of the first 50 pages of every fashion magazine I pick up these days. And men, just so you know, the first 50 pages are usually devoted to ads. The table of contents doesn't even show up in a September issue of Vogue, for example, until page 100 or so. What, are there no other models available to peddle fashion wares? Granted, Naomi Campbell might be in jail when an advertiser is planning a shoot, but surely, there are other choices. How about some of the castoffs from America's Next Top Model? Good thing supermodels are not role models. Oops, except that they are to many young girls--witness anorexia and the behavior of the girls on ANTM. Anyway, my point is, what is it about Kate Moss that advertisers and photographers find so appealing? Perhaps it is the fact that, since she is so frail, she doesn't have the strength to cause any harm should she decide to hurl a cell phone their way.

Headaches at Heathrow

The much touted Terminal 5 at London's Heathrow Airport is off to a shaky start. During its first four days of operation, British Airways (the sole tenant of the new facility) has cancelled 245 flights. More cancellations would have been necessary had BA not continued to operate most of its long haul flights from an older terminal.

Part of the appeal of the new terminal was its state of the art baggage handling system. But during the last few days, more than 15,000 bags have gone AWOL. BA has had to call in volunteers to help reunite bags with owners.

In addition to luggage problems, there have been complaints among passengers about the check-in process, confusing road signs, problems when paying at the parking garage, and a broken down escalator. BA admits to problems in the staff security screening process and in getting its staff familiar with the new facility.

Trouble in Tibet

As violent protests against Chinese rule continue, tourists are being urged to avoid Tibet. With many companies now postponing tours through the end of April, the question is, how long will this last? High season in Tibet starts in May. Given tourism's economic impact on the country--$390 million flowed in during 2006--the continued protests may have significant short-term economic effects. The longer-term question may be how the escalating protests will impact tourism to the Beijing Olympics in August. The violence in Tibet erupted just two weeks before Olympic celebrations kick off with the start of the torch relay.

On the government front, the granting of travel permits required for visitors to Tibet has been temporarily discontinued by China. The U.S. State Department has issued a travel alert, advising Americans to defer travel to Tibet at this time. For those already in the country, the alert advises the avoidance of "areas where demonstrations are taking place. U.S. citizens in Lhasa should seek safe havens in hotels and other buildings and remain indoors to the extent possible." It is interesting that the State Department has not gone the more definitive route of issuing a travel warning, which the Canadian government has done. Those who say that State's travel alert/travel warning system can be rather political in nature may have more fodder here.

Even before the travel alert came out, many U.S.-based tour operators started canceling upcoming trips to the region. High-end tour operator Travcoa canceled its Tibet-focused trip departing on April 21. Pacific Delight Tours has notified customers going to Tibet this month that trips are being postponed. SITA World Tours says its Beijing office has advised against sending tours into Tibet until the end of April.

This brings up a very important matter to travelers. If a tour operator cancels a trip, the consumer may not necessarily get his or her money back. Refunds may depend on the specific situation or the specific tour operator. I was surprised to learn that some high-end operators do not refund money for trips they cancel due to political events. Instead, some companies will only apply monies paid to other trips. Travcoa, however, has a policy that is more generous. According to Louise Shumbris, vice president of product development, "we try to be as liberal as we can regarding our refund policy." In the case of the April Tibet cancellation, Travcoa has offered full refunds to consumers. It did the same after canceling trips to Kenya last month.



--The number of visitors to Tibet reached four million in 2007, compared with about 2.5 million the previous year. Most of the visitors are Chinese. In recent years, fewer than 200,000 foreigners have visited annually.