This week’s musings, reflections and observations about travel affiliate marketing…

1. I think travel affiliates should pounce on JetBlue’s ‘All You Can Jet’ travel pass promotion, as it provides a great opportunity to increase their sales on this travel affiliate-friendly carrier.

The core elements of the program are rather simple: For $599, travelers can fly to any of the airline’s 56 domestic and international destinations as often as they like between September 8th and October 8th.   The ‘All You Can Jet’ fare, which includes all applicable taxes, must be purchased by August 21st, and, all flight reservations must be booked at least 3 days in advance of departure.  Additionally, if not already a member, travelers must also enroll in JetBlue’s frequent flyer program.

Since its launch, JetBlue has been one of the most innovative airlines, both in terms of product development as well as product marketing, and their latest initiative is a great example of the latter point.   Although the unlimited air travel pass concept is not new to the airline industry, the wrinkles in JetBlue’s program will, in my opinion, incent more people to fly the airline both during this during the promotional period and beyond.

The amount of press that ‘All You Can Jet’ pass has generated is truly impressive, and in my opinion, is really smart approach to stimulating consumer demand in the face of a still weak economy and during the post-Labor day period which historically is a slow period for airlines.

In light of the strong PR ‘tailwind’, those travel affiliates that sell JetBlue should see their business increase (and I think, provide the impetus for many others to join the airline’s travel affiliate program).  As TravelDividends has mentioned in past posts and articles, JetBlue one of the few U.S. airlines that offers a travel affiliate program; to read all the details of their program, or to enroll, click here.

2. I think that proposed makeover of the London’s Trocadero Centre into a ‘micro hotel’ is another smart idea.

Despite its past draw with tourists and locals, and its central location in Leicester Square, Piccadilly Circus, Trocadero Centre has struggled in recent years keeping its commercial tenants.  Once a hot bed for restaurants, video gaming and retail shops, that’s no longer the case; major tenant Planet Hollywood moved out this past January after a 16 year run, and the floors above level 3 have been vacant since Segaworld left in 2005.

The current owners will renovate Trocadero Centre and transform it into The Piccadilly Hotel (as the hotel is provisionally named), a 500-room plus micro-hotel modeled after the highly successful Pod Hotel in New York City.  It’s expected that the hotel will occupy the second through seventh floors of the building, and be managed by Accor Hotels, the France-based hospitality giant which currently owns or manages more than 3,00 hotels worldwide.

If Accor prices The Piccadilly along the lines of the Pod Hotel in New York City (current room rate averaging about $116 per night), this new hotel will provide affordable hotel rooms in the heart of one of the most expensive travel destinations in the world.  Prices like that will surely draw the budget travel crowd to The Piccadilly.

Accor Hotels offers a strong travel affiliate program, with commissions ranging from 1.0% – 8%, based on the hotel chain category/sector.  As The Piccadilly will be an ultra-budget property, I suspect that the commission paid on bookings will gravitate towards the lower end of the commission scale.  Nonetheless, it should be a top seller. Click here to assess Accor’s current travel affiliate program.

3. The reason I think The Piccadilly will be a winner isn’t based solely on a hunch; not only are budget hotels in demand today in Europe, chances are they will be so next year as well.  And that bit of news has dire implications for the UK (and European) hospitality industry, according to a just released benchmark by UK chartered accountants and business advisers Baker Tilly Restructuring and Recovery LLP.

In their June UK Chain Hotels Market Review, Baker Tilly warn that 2010 has all the makings for an even more difficult trading climate for hotels, particularly those at the luxury end of the market.

One particular quote that caught our attention: “It is predicted by forty percent of European hotel executives that more than five hotel chains will go into insolvency in the coming year – and it is easy to see why”, says Bob Bailey, a Partner at Baker Tilly, adding that “The Office of National Statistics shows the number of visitors to the UK has fallen from 33 million to 31 million during the 12 months ending in April 2009, and many companies are reducing employee travel to cut costs which is having an adverse effect on hotels that rely on corporate business.”

The well respected accountants also note that in general, the high-end hotel market is suffering the most, largely as a result of companies reducing employee travel to cut costs while many leisure travelers looking for ‘value for money’.  These dynamics also help to explain why hotels in the budget sector are not feeling the pinch as acutely as the luxury chains.

In addition to the gloomy sentiments expressed by the European hotel executives, Baker Tilly’s analysis also shows rising insolvency statistics, which further points to more hotel failures down the line.  For example, they note that in “…Q3 2007, no hotels went into administration, yet by Q1 this year, that had risen rapidly to 31 from just two in Q3 2008. While the Q2 2009 figures show the number of administrations fell back to 12, this is to be expected due to the industry’s seasonal nature.”  The report goes on to mention that  ”…all eyes will be on Q4 and Q1 2010 figures after a poor summer and as traditional holiday income tails off.”

TravelDividends agrees with Baker Tilly’s time window; the 4th quarter is likely to be the European hospitality industry’s ‘make or break time’.  We’ll definitely be keeping a close watch on Baker Tilly’s forthcoming analysis and commentary and will keep you posted.  In the meantime, let’s keep our fingers crossed that the pessimistic trends that are identified throughout this report don’t materialize.

If you have any thoughts, comments or questions about this week’s ‘TITIT’ column, please drop us an email…as always we appreciate hearing from our readers.

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