Weekly Roundup Friday 19 October 2012

Good morning

It is not just good but great – really great – to be writing this newsletter to you.  Why such enthusiasm, you might ask?

Well, for several days in a row, I was incapable of writing a thing.  Not just one but two kidney stones, and – debatably even worse – the total loss of sense and concentration as a consequence of the narcotic painkillers I was taking – saw my attention span and productivity both zero out.

Also curious was one of the medications which simultaneously said it may cause drowsiness, but also interfere with one’s ability to go to sleep.  Although you’d not think a single medication could do both, it truly did.  Sleepy during the day, but wide awake and pseudo-alert all night long!

Touch wood, the matter is now behind me, and I have absolutely no desire to continue taking Percocet on a recreational basis whatsoever!  My idea of fun is writing this newsletter, not suffering massive constraints on my mental focus and reasoning.

2012 Annual Fundraising Drive – Week 1 Report

While I was zoned out, many of you were very generously responding to the opening of this year’s annual reader fundraising drive.  Thank you so very much to all 85 of you who have helped out so far, including particular thanks to our 19 special super supporters :

Rick K, Ram S, Michael L, Laszlo K, Karen P, Lane M, Max L, Mike M, Bari H, Tom R, Neville W, Dave H, Lila D, Greg B, Joe I, Frank S, Bill W, Richard W and Linda M.

This compares however with 103 supporters in the first week last year (including 21 super supporters).  Last year we ended up with 545 supporters in total by the end of the fundraising drive, which while an improvement over the dismal 2010 result, was still down on the record-breaking 2009 result which saw us reach almost all the way to 1000 supporters.

Can we at least equal last year’s result?  With your support, of course we surely can.

I know we’re all getting bombarded at present with requests from politicians locally, state-wide, and nationally, all of who are suggesting that if we could just send them another $25 or $50 or whatever, their essential election victory will be almost assured, and wondrous things will result.  In reality, however, even a $100 or $500 contribution to any of these million and now reaching for billion dollar campaigns goes almost un-noticed and gets you nothing except a doubling of further automated requests for more money way into the future.  But a contribution to The Travel Insider really does make a difference to me and to the survival of your weekly newsletter.

Of course, continue to support the parties and politicians you favor, but please spare a thought for The Travel Insider too!  Alas, I’ve no lobbying groups, PACs, corporate supporters, special interest groups, or anything else like that rushing to press money into my outstretched hand.

I only have you.

The freedom from the constraints unavoidably associated with massive financial support is very liberating when I’m writing without fear or favor, but a bit terrifying at this time when I have to seek your help.

Please can I ask for your support to keep both The Travel Insider (and me personally) alive and well, for another year.  Please honor the PBS voluntary contribution model we use for fundraising – don’t force me to go out and get a job like this instead!

Oh – one related comment.  Each year I have some of the most loyal of supporters – those who choose to become ‘voluntary subscribers’ and who arrange for monthly or quarterly subscriptions on an open-ended ‘until cancelled’ basis – forget they are already subscribing and sign up for a second subscription.  Of course, also each year, Paypal’s rather awkward interface means that some people have their subscriptions automatically canceled due to credit card expiries, sometimes without even realizing what is happening.  So if you’re not sure if you are already subscribing, please simply ask me.

And now, read on for articles about :

• Christmas Markets Cruise – Going, Going….
• Revealed :  How Delta Can Profit from a Loss-Making Oil Refinery
• Revolving Door Appointment?  Or Well Deserved Position?
• Pre-ordering Your Airline Meal – Good Idea or Bad?
• Worst Airline Blunders of 2011
• Trip Advisor Under Legal Attack Again
• Regional Tourism and Branding Part 1
• Regional Tourism and Branding Part 2
• An Example of Good Branding
• Travel Stress
• Another Problem with Digital ‘Downloads’
• Am I a Luddite?  Or is This a Really Bad Idea?
• Proof of the Nonsense of the DMZ?
• $5.8 Million Anti-Terror Program a Total Waste
• And Lastly This Week….

Christmas Markets Cruise – Going, Going….

We only have until Wednesday 31 October to get payments in to secure the $1000+ per person saving on this year’s lovely Christmas Markets cruise from Budapest to Nuremberg.

If you’d like to join with your fellow Travel Insiders on a truly wonderful pre-Christmas experience and at a similarly wonderful bargain price, visiting some of Europe’s most beautiful cities and towns (my favorite stops are probably Salzburg, Regensburg and Vienna) please go to our main page all about the cruise and register your interest on the form near the bottom of the page.

Revealed :  How Delta Can Profit from a Loss-Making Oil Refinery

I’ve written regularly on the mysterious decision by Delta to buy a loss making oil refinery.  A number of people have tried to justify it, ranging from sadly ad hominem attacks on me, suggesting that of course Delta wouldn’t do such a thing without a good reason which I’m simply too stupid to perceive; to explanations that overlook the unavoidable accounting reality of it.

For example, recently a person said that Delta would save money by cutting out the middle men who were otherwise adding to the cost of buying jet fuel.  Well, that may indeed be so, but by purchasing the loss making refinery outright, the savings on middle men cuts are more than compensated by the loss of the ‘subsidy’ which is what the refinery’s former actions represented to Delta – the refinery was selling its jet fuel for below its cost to produce, and when Delta becomes the refinery, then it no longer has a helpful third-party absorbing that cost.

I’ve now received an explanation which has the ring of truth associated with it, as it should, because it is from a source who justifiably wishes to remain anonymous, but let’s just consider him as a current or former C*O executive of a major oil company and familiar with the situation.

This person says that by using their own fuel, as the refinery owner, Delta is exempted from the need to pay federal excise tax on the fuel (currently 4.4 cents per gallon).  He estimates this to be worth about $300 million a year to Delta – I think this may be a mistake, based perhaps on not realizing that commercial airlines only pay 4.4 c/gallon rather than 21.9c/gallon.

But if his underlying assertion is correct – that by being simultaneously both the refiner and the consumer of the jet fuel, Delta misses out on the ‘trigger transaction’ that would require it to pay the federal excise tax, then this saving (a minimum of $35 million a year and potentially much more, depending on how the exchanges between the Delta refinery’s non-jetfuel products and other refineries and their jetfuel products are configured) certainly goes a long way to explaining why Delta (and now UA too) has been so interested in buying a loss making refinery.

In other words, the former ‘subsidy’ provided by the refinery selling the jet fuel at a loss might now be more than compensated for by an even greater ‘subsidy’ in the form of a tax code loophole.  That’s in effect a subsidy from the rest of us taxpayers, by the way – we all pay more tax so Delta can pay less.

Interestingly, there was a move five years ago to zero out all taxes on jet fuel used by commercial airlines, but that seems to have gone nowhere.  For now, the appropriate legislative response might be to make federal excise tax payable not on the amount of fuel purchased ‘at the pump’ from third parties, but by the total amount of fuel consumed, no matter how or where it is acquired.

So if Delta is deriving a tax benefit, it is vulnerable to a change in the tax code which could zero that benefit out overnight by creating a level playing field between it and the other airlines.  And you have to believe that while DL will be lobbying to keep things the way they are, the other airlines – now that they’ve read about this in The Travel Insider – will be assertively hinting to their legislators that they’d prefer to see an even playing field – either all airlines pay the tax, or none of them do.

Revolving Door Appointment?  Or Well Deserved Position?

Ex FAA head Randy Babbitt has joined Southwest Airlines as their senior VP in charge of labor relations.

Babbitt was appointed head of the FAA in early 2009, a position he resigned in December 2011 after being arrested for drunk driving – an arrest which seemed filled with police procedural flaws and which resulted in charges being dismissed in court in May this year.  It was honorable for Babbitt to almost immediately resign his position rather than belabor his innocence and hang on as FAA Administrator; although if he’d succeeded at doing that for the five months until the court case, he’d clearly still be FAA Administrator today.

Prior to his time at the FAA, he was for eight years the President of the Air Line Pilots Association, the largest pilot union in the country, and was formerly an Eastern Airlines pilot for 25 years.  The ALPA does not represent Southwest’s pilots.

So we wish Mr Babbitt well in what seems to be a very well deserved new position, and reasonably free of immediate conflicts of interest.

Pre-ordering Your Airline Meal – Good Idea or Bad?

American Airlines, although still in Chapter 11 bankruptcy, has been coming up with some interesting new ideas.  I liked its new baggage idea, where your bags will be taken from your arrival airport to your chosen ultimate destination for you, freeing you from needing to wait for them and/or needing to be encumbered with bulky suitcases during a day of business meetings prior to getting to your hotel.

AA have now announced another mildly innovative concept, allowing business and first class passengers to pre-order their entrée choice up to 30 days prior to the flight’s departure.

This sounds like a great idea and a convenience, right?  And you can not only choose your entrée, you can change it too if you wish, up to 24 hours prior to flight departure.

Well, I’m not so sure this is indeed truly a good idea and designed for our benefit.  First, I find the small ‘distraction’ of reading a menu and choosing from the limited options available a pleasant part of the otherwise tedious travel experience.

Second, I seldom know what I want to eat, eg for dinner on Tuesday in two weeks time, prior to, well, pretty close to dinner time that day.  It may depend on all sorts of things – what I had for lunch, what snacks the airline provided prior to dinner, what I’m expecting the next day, my general mood and random whims, what looks/smells good/bad when I actually see the meals being served, and so on.

The benefit to the airline is obvious.  Instead of needing to load spare portions of each meal choice so as to ensure that most of the people in the premium cabins get their first choice of entrée, now they only need load exactly the meals that have been pre-ordered.  And therein can be found the not-so-subtle downside to the program.

This doesn’t give us more choices and more control over our dining experience.  It will inevitably end up as not being an option, but a mandatory requirement that we order our food in advance, and our ability to change our mind will become increasingly constrained (how much do you think they’ll end up charging us as a change fee each time we change our entrée option online?).  Once we get on the plane, we’ll no longer have any remaining ability to choose or change our mind at all.

So I don’t think this a good idea, and while you certainly can sneak a peek online to see what the menu will offer for your next flight, I recommend you resist the temptation to actually commit yourself to any food choices, and continue to avail yourself of the opportunity to choose whatever you want, when on board and the meal is about to be served.

Worst Airline Blunders of 2011

Here’s a mildly amusing listing of one person’s opinion of the 11 worst airline blunders of 2011.

Most (if not all) of them are trivial rather than strategic in nature, but the chances are that one or two of mistakes will be new to you.

Trip Advisor Under Legal Attack Again

Here’s an interesting write-up of a case that is working its way through the Scottish legal system between a B&B owner and Trip Advisor.  As is often the case in similar disputes, the B&B owner is claiming to have lost business as a result of unfairly negative reviews on Trip Advisor’s site.

The interesting and unexplained thing is that Trip Advisor appears to have voluntarily given up its earlier claim to not be subject to UK or Scottish law, and is now willing to argue the case in Scotland.

On the other hand, the B&B owner may have won a Pyrrhic victory.  As part of agreeing to argue the case, Trip Advisor also succeeded in getting the venue changed from a small claims court in Stornoway (a small town, almost as far away from mainland Scotland as you can get, and which, if at all like small claims courts in the US, would be liable to make a decision based on its own capricious concept of fairness rather than a strict interpretation of the underlying law) and will now have the case heard in a formal court on the mainland.

The legal fees alone will now dwarf the £2000 claim being brought by the B&B owner.  It is likely other hoteliers will rush to help fund the case, however.  It is a case that hoteliers desperately want to win – making Trip Advisor liable for bad/unfair/dishonest reviews, while it is also a case that Trip Advisor must not lose if it is to maintain its claim of unbiased publishing of all reviews, good and bad, just so long as they pass a ‘smell test’ for being valid.

The most amusing thing about the case is that it is one of the pot calling the kettle black.  Where do all the dishonest reviews on Trip Advisor come from?  I’ll wager at least as many come from the hotels themselves as from guests – hotel owners either praising their own property, or lambasting that of their competitors!

Regional Tourism and Branding Part 1

Tourism marketers love to talk about ‘branding’ their destination, although it is far from obvious they consistently know what they mean by the terms they so enthusiastically employ.  A related problem is the ‘change for change’s sake’ destination, where someone, doubtless keen to add a new ‘accomplished’ bullet point to their resume, wishes to ‘rebrand’ their destination.  Sadly, this is almost always a change for the worse.

An example of this is Suffolk County in England.  Suffolk is a typically lovely but unremarkable county, north-east of London and reaching to the coast.  Moves are now afoot to describe it as ‘The Curious County’.  That’s an impressively empty turn of phrase that only a still-wet-behind-the-ears marketing graduate would love.  Part of the motivation seems to be ‘tag line envy’ with a Suffolk marketing agency pointing out that all US states and many other British counties have tag lines, but that Suffolk doesn’t.

Well, yes, maybe so.  But just because other places have tag lines doesn’t mean that Suffolk must have one too, and even if it should have one, wouldn’t it be better to have a sensible one which means something, rather than an empty-headed piece of nonsense that means nothing to no-one.

More details here.

Regional Tourism and Branding Part 2

I commented wryly after my last visit back to my home country of New Zealand that its marketing slogan ‘100% Pure’ was looking increasingly fraught and at odds with the ugly environmental facts that actually existed there.

That is another key part of a branding strategy.  A brand statement not only needs to be clear and meaningful, it also needs to be more or less supported by the reality of the product being so branded.  No-one would ever brand Cadillac as ‘The Most Affordable Car’ or United Airlines as ‘The World’s Best Airline’.

A recent study has shown that 52% of New Zealand’s river recreational spots are unsafe for swimming due to water quality concerns.  Only 20% were graded as ‘good’ or ‘very good’.  Even the scorecard for oceanside beaches was disappointing, with only 60% of those having ‘good’ or ‘very good’ quality water.

But while NZ’s water quality might be of uncertain purity, it is clear that its morals are much purer, with this attempt by the country to set a new aquatic type world record (click the link to see what for) being slammed as, oooops, indecent.

The country’s new slogan – New Zealand – 20% – 60% Pure Water, and More Pure Morals?

An Example of Good Branding

Congratulations to Felix Baumgartner and his supersonic free-fall jump from the edge of outer space.

Perhaps the real winner of this event was not Mr Baumgartner, but Red Bull, the company that sponsored the event.  It is unknown exactly how much it cost Red Bull to stage this event, but experts are now estimating the resulting publicity is worth the equivalent of $160 million in advertising, and one marketing guru says he is ‘completely in awe of Red Bull as a brand’.

Which is clearly a lot more than what the value of a Lance Armstrong endorsement now is to Nike, ending a relationship that Nike has spent an estimated $40 million on over the years.

Travel Stress

One reader commented to me that he felt frequent travelers were more prone to kidney stones.  Maybe, maybe not; but it is definitely true that not only do we get exposed to more potential infections in our travels, and not only do we get more physically run down from jet lag and other inconveniences, we also suffer a great deal more stress when we’re on the road than when we’re at home.

Here’s an interesting listing of travel stress factors, suggesting that the number one stress factor for women is lost luggage, and the number one stress factor for men is getting stuck in a coach class seat on a long flight.

Also right near the top, for both genders, is suffering from a poor or no internet connection (that would be top of my personal list, for sure).

An earlier article, based on a Columbia University study, found that frequent fliers were more likely to have high cholesterol, high blood pressure, and high weight.

The irony of all of this is when people say to us ‘You’re so lucky to get to travel such a lot for your job, for free’.

Another Problem with Digital ‘Downloads’

I wrote last week about a couple of cases working their way through the legal system that are seeking to better define our rights to the digital products (ie movies, music, and books) we buy and ‘own’, and indeed, our rights to the tangible things we own as well.

There’s an interesting story this week about a person who bought a digital copy of a movie from Amazon for $14.99 – about what you’d pay for many DVDs if buying a physical copy of a movie.

So this person bought a digital copy, which allowed her to keep the movie ‘in the cloud’ and to download/watch it whenever she liked, as often as she liked, for ever.  Exactly the same as owning the DVD, but without the hassle of storing it, and without the risk of losing it or scratching/breaking it, right?

On that basis, surely it makes sense to buy the digital copy rather than the old-fashioned hard copy DVD?  Besides which, you have the greater convenience of being able to watch the movie from anywhere, at any time, and not being restricted to only being able to watch the movie when you are physically united with your DVD.  Right?

Well, actually, not right.  Let’s talk about two obvious and one subtle compromise you are making when you choose the digital cloud-stored copy in preference to the DVD or Blu-ray hard copy.

The first obvious sacrifice is picture quality.  Streamed videos are never as good a quality as are those played direct from a disk.

The second obvious sacrifice – at least at present – is that if you want to, you can loan or even resell your DVD or Blu-ray.  You can’t with a digital copy.

And let’s also think about the claim ‘you can watch your movie anywhere’.  How successful are your attempts at watching true HD quality movies in a hotel room?  The streaming bandwidth usually knocks the quality down a couple of notches, and sometimes involves lots of pauses to re-buffer, or just completely fails.  An easier solution is to rip a higher quality digital copy of your DVD onto a portable hard drive and take that with you.

Don’t forget the elephant in the corner of the room, either – a slow but inexorable trend by ISPs seeking to meter and limit our data usage each month, and to charge us overages if we exceed whatever monthly allowance they wish to impose on us.  Sooner or later, there will almost certainly be a tangible cost associated with the gigabyte or so of data it takes to download/stream an HD movie from the internet to one of our devices.

Now for the more subtle compromise.  As the article reveals, the movie that you think you now ‘own’ in perpetuity (well, until you die anyway, even if you can’t will it on to your estate) might suddenly completely vanish off Amazon’s servers, due to Amazon itself not having rights in perpetuity to the movie in the first place.

If Amazon’s deal with the studio expires, your movie access expires, too.  And it seems there’s no chance of getting a refund for the cost of the suddenly vanished movie you bought, either.

Imagine if Warner Bros said to Walmart ‘Okay, you can’t sell our DVDs anymore, and you’ve got to give us back all the ones you’ve already sold’ and then Walmart somehow contacted you and said ‘Two years ago, you bought a WB DVD from us.  You have to send that DVD back to us right now, and we’re not going to give you a credit for its return, either’.  How well would that go down?

But that’s what you may suffer with digital copies.

Don’t confuse this with Netflix.  I love my Netflix video streaming service.  It costs only $8/month and allows me to watch as many movies as I like.  I can watch movies on my home television, on my computers, and on my tablets and even phones, too.

It doesn’t pretend to sell me movies, it merely allows me month to month access to view their library of 20,000+ online movies and television shows.  If you’ve not tried it yourself, Netflix offer a one month free trial for you to try it out.  You should do so – chances are you’ll love it as much as me.  It only needs to save you the cost of buying one DVD a month to more than pay for itself, and the ability to have instant access to this huge library of entertainment is truly liberating.

But I’d never, ever, buy a digital movie copy of any movie and indulge in the fantasy game of pretending that I then owned the movie I’d just paid full price for.  For every reason listed above, if there’s a movie you actually want to own and keep, you are much better advised to buy a hard copy of it, and then rip your own digital copy to your laptop or tablet or to an external hard drive or whatever.

You can buy tiny little 1TB hard drives that don’t even require an external power supply (they take their power from the device they are connected to) and which automatically configure to the computer you plug them into via a regular USB port.  They are small (typically about 4″ x 3″ x 0.7″), weigh next to nothing (8 ounces or less), and cost next to nothing too (easily under $100), while holding potentially 500 movies on a 1TB drive.  If that’s not enough for you, a 2TB drive is about the same size and weight, and costs under $200, giving you 1000 movies you can store in your shirt pocket.

We don’t need the ‘convenience’ of cloud storage of movies any more than we need the ‘convenience’ of internet stored music; and certainly there’s no need to accept all the massive quality and convenience and cost compromises associated with this ‘convenience’.  The amazing lightweight portable high-capacity hard drives give us our own personal ‘cloud’ for the movies we want to own, and Netflix (or Amazon Prime) gives us access to tens of thousands of movies as long as we pay minimal monthly fees to access them.

Am I a Luddite?  Or is This a Really Bad Idea?

Slowly but surely, our cars are becoming more and more electronic, and rather than their functions being directly controlled by us via mechanical connections, they are being controlled indirectly by computers that selectively respond to electronic inputs from us.

We’ve already accepted that ‘the computer knows best’ and have been happy to do so with such critical safety features as braking – think of ABS and traction control as two examples where we now happily trust the computer to do a better job of managing the car than we can do ourselves.  Usually, these things do work as well as or better than what we can do ourselves, and the few times that the braking or traction control goes a bit wonky usually involve very brief episodes of mildly unexpected behavior in non-life threatening cases.

The replacement of a mechanically operated throttle by a computer controlled throttle has also been a reasonably positive experience, with only a few rare cases of possible computer glitches resulting in maybe vehicles suddenly having their gas pedal electronically stuck at maximum.  Although, with these days the ignition switch increasingly also being merely a computer signal to tell the vehicle’s computer to shut things down and switch the engine off, rather than a physical switch that opens or closes, we have lost the emergency capacity to at least 100% kill the engine if we need to – and, come to think of it, many cars these days have an electronic emergency brake switch rather than lever or pedal, so we’re relying on the computer for our emergency brake too.

However, one function has remained almost 100% in our hands.  Steering.  Sure, things like ‘parking assist’ are nice when moving at 3 mph into a tight parking spot, and power steering is lovely at any speed anywhere, but at least we know there’s a good old-fashioned mechanical connection between the steering wheel in our hands and the wheels on the road.  We turn, they turn.  No ifs, ands, or buts.  No chance of any screw ups there, other than those we induce ourselves.

Which brings us to Nissan’s proudly announced plans to now replace that direct control system with an electronic control system too.  While the system has the ability to be over-ridden if necessary, one wonders exactly how the override system could be activated while driving down the freeway at 70 mph and with the wheels suddenly locked hard over.

However, what really brings the latent Luddite out in me is the next level of the system, whereby the steering system will be given the ‘intelligence’ to automatically take over and steer to avoid obstacles that it might see but which we as nominally driver in charge have failed to observe.

Nissan expects to have electronic steering on some model cars next year, and automatic ‘the car computer knows better than you’ steering available in 3 – 5 years.

Of course, it allows for a whole new level of excuses, doesn’t it.  ‘Sorry dear, I don’t know what got into the car, but somehow it cut the corner and put a nasty scratch from the guard rail all down the side’.  ‘Sorry, officer, but something happened to the steering computer and it just wouldn’t respond when I tried to avoid the pedestrian’.  And ‘So what if I’m drunk.  I’m not driving the car, the car is driving me.’

Proof of the Nonsense of the DMZ?

I speculated a few weeks ago that the security charade we were all subjected to when visiting the South Korean side of the DMZ suggested that maybe it was being operated by the TSA.

Just how big the charade is has now been dramatically revealed in this article, which reports on a North Korean soldier who defected across the DMZ to South Korea, but who had to bang on the barracks doors (of two different army barracks) before he could get any South Korean soldiers to respond to his escape.  The article also refers to a second North Korean who evaded detection and was only discovered some days later, drunk, and repeatedly proclaiming for all who would care to hear him ‘I am from the North’ by a local South Korean citizen.

Maybe if the guards on the South side of the border focused a bit more on people crossing over from the North and a bit less on tourists visiting from their side, these embarrassing lapses might not occur.

$5.8 Million Anti-Terror Program a Total Waste

Okay, so you might think, having been conditioned to government programs routinely wasting tens or even hundreds of millions (and billions) of dollars, that ‘only’ wasting $5.8 million is getting off lightly.

That may be true, but the true cost of the ‘Text Against Terror’ program was actually a great deal more than $5.8 million.  In addition to the above-the-line costs, there were many other costs of the program, and then there were the costs of responding to the 307 text messages the program generated.

Plus also there’s the opportunity cost.  The $5.8 million, and the manhours and other resources that were misdirected to this program could have gone to more effective anti-terror measures.

More details here.

And Lastly This Week….

One of the frustrations of life these days is having a problem that is made worse by brain-dead ‘customer service’ personnel who lack the slightest amount of intelligence to sensibly deal with situations that don’t appear on their cheat sheet lists of responses to specific situations.

We can sometimes understand how and why we get inappropriate answers and outcomes from such people, but how to explain away this person’s problem and, more to the point, the refusal of Bouygues Telecom to even acknowledge that her €11,721,000,000,000,000 invoice was, ahem, slightly excessive?

What name do you give to your at-home (or in-office) Wi-fi network?  Here’s an article to help you the next time you set up a Wi-fi network.

Truly lastly, may I remind you again of our annual fundraising drive.  If you’ve read all the way down to here, you’ve received 5333 words of commentary and information this week alone, and probably spent half an hour or more reading through it.  How much is that worth to you each week?  Please do choose to respond and reciprocate fairly.

Until next week, please enjoy safe travels

David.