Car Rental Crunch Sends Prices Skyward
It seems counter-intuitive: car manufacturers can’t seem to give away their vehicles, but car rental companies can’t get enough vehicles to meet demand. Bill McNeice, president of the Associated Canadian Car Rental Operators told the Globe and Mail this week that the past summer was particularly challenging. “A lot of markets in Canada (were) sold out; you couldn’t get a car. That’s a new phenomenon.” McNeice says something else that’s new is rental cars with 30-, 40- or even 50,000 kilometres on the clock. You just wouldn’t see that in the past, especially from the major rental companies. This sea change in the industry is a complex but fascinating story. When the market for both new and used vehicles was hot, car rental companies were the carmakers’ largest customers, purchasing over 100,000 vehicles per year in Canada alone. The rental companies kept the vehicles for six months or so and then sold them back at depreciated prices to the manufacturers, which sold them on again as low-mileage used cars. But when demand softened, carmakers started increasing depreciation rates, making big rental fleets too expensive. Today, most rental cars are purchased outright by rental companies and then rented for much longer than the previous norm. With rental car demand in Canada being highly seasonal, smaller fleets mean higher prices year-round, coupled with restricted availability at peak times. Looking into the future, McNeice sees little hope of a return to big fleets and low rental prices. His advice: “Book early and pay more.”
Don’t Swing The Cat
If you’re not familiar with cruising, inside cabins are usually the cheapest accommodations on the ship. Therefore, when you see a low advertised price for a cruise, nine times out of ten it’s for an inside cabin. The traditional definition is a cabin without a window, porthole or balcony, but that’s changing, with some inside cabins now featuring windows – they just look towards the inside of the ship rather than out. But as UPS reported this week, Norwegian Cruise Line is aiming to make a splash with a new concept in inside cabins with the 2010 launch of Epic, its largest-ever ship. Norwegian is calling a group of inside cabins ‘studios,’ and at 100 square feet, they’re small even by inside cabin standards. 128 of the tiny cabins, many of them connecting, will be grouped around a two-storey, 1,000 square foot ‘living room,’ featuring a bar, big-screen TV, room service and a concierge. Inside the cabins themselves, cruisers will find a king-size bed that doubles as lounging space, a 32-inch flat-screen TV, adjustable mood lighting and a big round window looking on to an interior corridor. There’s also a shower, toilet and a sink that slips behind a sliding door. NCL is aiming its studio cabins at first-time cruisers, especially young people and large family groups. It’s a bit like the ‘micro-hotel’ concept, just on the water. The cabins will be priced for budget travellers, who will also have access to the rest of Epic’s facilities and entertainment including daily shows by the Blue Man Group.
WestJet Website Woes
When you see a news story about a major company about to undergo a computer system upgrade, migration or cutover, it’s not hard to guess what will happen next: a news story about the series of glitches following the changes. It happened again this week with WestJet as the Calgary Herald reported. The airline’s website went down for a few hours after the cutover on Friday, October 16, and it crashed again the following Monday for about three hours. This time the culprit was the web component of the Sabre-Sonic Customer Sales and Service Solution, WestJet’s new online home. With the site down, prospective customers were forced to let their fingers do the walking. But that’s not easy these days, as call centres aren’t staffed the way they used to be, and lines were quickly jammed. There were struggles at airports on the weekend too, as gremlins invaded some baggage tag printers and some advance seat selection records disappeared. However, with problems fully expected in a move of this size — close to a million records were transferred from one system to another — it was a pretty successful transition. Now comes the good part: for WestJet and its guests, the much-anticipated new reservations system will open up major opportunities for cooperation with other airlines.
There Goes The Neighbourhood
There have been several well-publicized incidents of bad behaviour on cruise ships lately, or in the high-profile case of a group of Americans in Antigua, on shore excursions from cruise ships. With cruise prices at record lows, some pundits have speculated that ‘the wrong crowd’ can now afford to take to the water. To their credit, cruise executives are rejecting this classist assumption. Carnival Corp. CEO Micky Arison, for example, told the BBC: “Fighting isn’t just something that happens to people on low incomes. Whether you earn 10p or £100,000 a week, it often comes down to how much beer you’ve drunk or the circumstances you’re in.” Cruise passengers, however, aren’t convinced. A poll with over 500 responses on cruise website CruiseCritic saw nearly half of respondents agree that “low fares are definitely attracting different or untraditional types of travellers to cruising.” That said, nearly 45% agreed that “most outlandish conduct is the result of excessive drinking or carrying on.” Others simply put the blame on media hype or the growth of the industry. With more people choosing to spend their vacations cruising; the odds increase for more troublemakers aboard. In the comments posted on CruiseCritic, a recurring theme is that civility and manners are on the decline throughout society, so there’s no surprise that it’s happening on cruise ships too. With a seemingly endless media preoccupation with what happens on cruise ships, you can expect to hear a lot more on this issue, especially with more massive megaships launching over the next year
Make Way For Oasis
Nearly as long as the Empire State Building is tall — and 18 decks high to boot — the soon-to-be-launched 5,400-passenger cruise ship Oasis of the Seas brings with it a long list of superlatives and firsts. As Royal Caribbean International CEO Adam Goldstein told Forbes Magazine: “It’s in the DNA of our company, about every 10 years, to take more or less a fresh sheet of paper and create the greatest cruise ship in the world.” Not a humble statement perhaps, but it’s hard to be humble when you’ve just spent $1.4 billion on a marvel of modern marine engineering. Unfortunately, that $1.4 billion is just slightly more than the year-over-year decline in revenue experienced by RCI as the global recession took a huge bite out of cruise revenues. Of course, the economic downturn was not foreseen years ago, when plans for Oasis began to take shape. It’s not just Royal Caribbean that is gambling on the success of this floating behemoth. The ports that will welcome Oasis have invested millions too. Jamaica, for example, is spending $121 million on a new port at Falmouth, built specifically for Oasis and upcoming sister vessel Allure of the Seas. The Oasis homeport at Port Everglades, Florida has spent $75 million on a state-of-the-art terminal, while other ports in Mexico and the Eastern and Western Caribbean have also spent millions on pier lengthening or dredging projects to accommodate the ship. Each of the ports is hoping that the publicity around the ship and the economic impact of the weekly arrival of thousands of passengers and crew will justify the investment.
Photo Credits: ncl.com, westjet.com, ncl.com