The coronavirus pandemic and social distancing warnings are going to have long-lasting effects. We’re likely to want to continue basic hygiene long after requirements lift. Remember when a little soap and a rinse was washing your hands? That was just last month. Remember when videoconferencing was a clunky, annoying technology and you weren’t used to taking meetings that way? Getting everyone’s tech challenges sorted out here is a real threat to the travel industry.
The impressions and beliefs we’re forming through this crisis are going to carry forward, and that will have long-lasting effects on travel brands. We’re used to being abused on the road, and even when we swear we’ll never fly with one airline, or stay with another hotel chain, that rarely has much effect.
We’re in the process of a real shift in cultural belief formation, so the impressions of brands are likely to be far more lasting than before. And after all, our experiences with a travel brand now can’t easily be ‘written over’ by new experiences that follow quickly after.
So here’s an early stab at brands that rise in status based on how they’re handling the crisis, and those that fall in status as well.
Higher status
Outside of travel the biggest status gains are for health care workers, telemedicine, and videoconferencing and remote workers. In our world of travel, I think the biggest gainers are:
- Hotel chains generally: refunding money on prepaid bookings for hotels that remain open.
- Hilton: for being fast out of the gate to renew everyone’s elite status
- Hyatt: for being first to offer something (points) for non-refundable bookings, quickly improving their offer to free cancellations, and delaying points devaluations
- American Airlines: though they’ve certainly done a bunch of late cancellations of flights, after most passengers already bailed on their trips and accepted future travel credit, they’ve been willing to honor refunds (as they are legally required to do when flights are cancelled and also to waive fees to redeposit miles for cancelled trips
- Four Seasons New York: giving rooms free to health care workers so they don’t have to commute after working 14+ hour shifts.
Lower status
Outside of travel the biggest status declines are the FDA (which banned most COVID-19 tests until very late), the World Health Organization and the CDC (advising against wearing masks to prevent spreading the virus). In our travel world, the biggest status declines are:
- United Airlines: the first U.S. airline to (illegally) refuse to refund tickets for cancelled flights, and how does switching to only look at how much a customer spends to determine their loyalty look these days? They’ve already had to cut spending requirements in half and they say they’ll need to do more.
- Marriott: for being last to offer any kind of flexibility for prepaid reservations, and for laying off many of the customer service agents who take care of the chain’s best customers
- Delta: having led the charge against government money in aviation since 2015 and then lining up for a bailout.
- IATA: the international airline trade association which has been lobbying against consumer protection rules to allow carriers to keep a customer’s money even when they cancel flights.
- TSA liquid ban: all of a sudden 3 ounce rules weren’t so important and passengers could bring full-sized hand sanitizer through security checkpoints. If those are safe now, they were safe before too, and the liquid ban is further exposed for the security theater it’s always been. (The American people are downgraded in status too, for not demanding change, since TSA was already tossing so-called dangerous liquids in bins beside the checkpoint yet there were few demands for change.)
- Expedia: the last think anyone has wanted is to deal with trying to cancel travel plans while dealing with Expedia customer service. Online travel agency sites have been an additional barrier to getting refunds and avoiding fees.
- Partnership For Fair & Open Skies: the lobby group formed by Delta, United and American to argue for restricting consumer choice and higher prices by limiting U.S. flying by Emirates, Etihad and Qatar. The crux of their argument was: it’s unfair for U.S. airlines to compete against carriers receiving government support. The claims were always disingenuous but now there’s no way for the U.S. carriers to even pretend to oppose government bailouts.
The question here isn’t ‘who is the best’ but who has risen or fallen relative to previous estimation? A brand could still be really bad, just better than before. Or it might still be good, yet tarnished.
Which travel brand reputations are the biggest winners and losers coming out of this crisis?
At the top of the “higher status” list is the one group of people everyone has consistently forgotten while consistently doing a thankless task: the scores of IT staff who are scurrying around a dramatic change in setups – whether its new laptops, phones or home equipment suddenly, or the ones who have to make sure all the systems (whether its video conferencing, iMessage, Facebook or WhatsApp, this very website! etc) that everybody is suddenly relying upon to use more now that everything else has come to a standstill.
Gary, your status evaluation of the airlines seems a bit unbalanced in claiming that that American’s brand status rises and Delta’s falls.
Delta was the first airline to extend status, and they extended for a full year. Has American even extended status yet? Also, I don’t see American declining bailout money, either – and how much do individual fliers really care about that?
As far as I can tell, American’s waiver policy allows for only a one-time change, where Delta’s waiver has no restriction – and that seems much more relevant to the experience of doing business with them.
I don’t think it’s clear either that American rises, or that Delta falls, at this point.
There’s a difference between getting government assistance in time of emergency and being continually government backed and subsidized. It’s called fair competition. Almost all airlines are getting some form of government assistance right now due to the pandemic. I just wish our assistance would have been better structured. Encouraging airlines to keep on employees that they don’t have work for now, and probably won’t need in the intermediate term either, is just silly.
Long term, USA simply needs to end open skies agreements with ME3 countries. It benefits only them, allowing them to create megahubs for travel that does not even want to go to the ME. Deal with them like we deal with China. That will take care of ME3 competitive issues.
Aren’t all U.S. citizens who receive stimulus checks and unemployment low status? They won’t pay a cent back of this bailout but no one is criticizing them. It is ridiculous the narrative that is perpetuated against sound companies that were massively affected by government interference in the market place and government shutdown of the economy. This shutdown is necessary but it is unfair that people are being helped with no strings attached and no condemnation but not certain industries that are heavily affected long term. So many miles and points blogs ridicule AA, United and Delta but all around the world airlines like Lufthansa and Korean Air are asking for assistance but they are not derided. People constantly blame airline manage,won’t but don’t blame the unions that extort airlines and flight attendants (some are in their 60s) who provide poor service and treat passengers like dirt.
Until AA follows its network peers in extending status, I can’t see how its brand fares any better, coming out of the COVID-19 crisis. Delta, JetBlue and United have been more aggressive in promoting free travel offered to healthcare workers in hard-hit areas, where is AA here?
If anything, AA’s image took a harder hit early on in the bailout discussions as they were rightly criticized for buying back significant volumes of stock while generating negative operating cashflow, therefore borrowing to essentially goose AA share prices into bonus territory for management.
It baffles me how Doug Parker has managed to remain CEO for this long.
Jetblue also naughty
Jetblue also naughty
I think American loses as they are asking for a bailout while continuing to spend money retrofitting planes with Oasis (cramming more people into an already densely packed plane, plus the lavatory where it’s impossible not to touch your clothes and skin to the surfaces) and have 10 wide seating on long hauls versus Delta’s 9 wide. People are now acutely aware of the risks of too close a proximity to others, germs lurking around, etc. and I think it will backfire on them. It’s also expected that this pandemic will surface again. Continuing to invest money in Oasis (in this climate) and asking for a bailout just doesn’t sit well with me (as a longtime EXP).
Presuming that planes will not be full for a long time, someone ought to invest in a “More Room Throughout Coach” program for both safety and comfort.
Rises: Southwest, for already having the most flexible change and cancellation policies, and doing even more by allowing changes without having to pay the fare difference if rebooking to a date within 60 days. Hopefully they will extend this if things don’t open back up as soon as we all hope.
I would say that AA, the dAArk side, remains a mixed bag and could even belong in the lower status group because they remain the only airline among the Big Three that has not extended elite status. I do not give them credit for following the law and issuing refunds for cancelled flights, despite UA doing the opposite, for which they should be held accountable (but likely won’t be).
IHG allowed us to cancel our reward nights in London without question and give 100% back to us.
American is giving us a full refund for our UK trip May 21st
United BOOOO My brother has to wait until November to get $12,000 back for Business Class tickets to New Zealand because 14 of the 21 days he was to be there he would be quarantine.
Air New Zealand BOOOO Because the trip from Auckland to Christchurch was NOT canceled , even though they would be in quarantine during the flight and were refused a refund.
Car rental companies – No deposits so all Canceled.
2020 Holidays ….. Got nothing for you.