Weekly Roundup Friday 31 May 2013

A warm smile and welcome from both children and adults is part of your Sri Lankan experience.  Yes, the natives are definitely friendly.
A warm smile and welcome from both children and adults will be part of your Sri Lankan experience. Yes, the natives are definitely friendly.

Good morning

A big newsletter this week (5050 words!).

I’ve been focusing on different aspects of Sri Lanka each week as part of explaining why it is our featured 2014 Travel Insider Tour, and hopefully encouraging you to join with twenty of your fellow Travel Insiders on this wonderful experience next February.

This week I wanted to talk about safety.  Several potential and now actual members of our group have asked about this.

It is true there was an extended conflict between the minority Tamils in the north of Sri Lanka and the majority (predominantly Sinhalese) people in rest of the country.  While the issues had been longstanding, things became more relevant after the country won its independence from Britain in 1948, with tensions slowly increasing until 1983 when the Tamils declared a breakaway region.  The next 25 years saw an on-again/off-again civil war of sorts, with the tiny Tamil minority hopelessly outnumbered at every turn.

After some failed cease-fires, a true peace finally was achieved in May 2009, with the Tamil rebels vanquished.  It was a long and bloody campaign, with over 100,000 people killed during the hostilities.  Needless to say, during that time, and for the several years subsequently until it was clear the peace was a true and lasting peace, prudent travelers would not visit the country.

Happily, the nation’s troubles seem to now be behind it, and the peace has held.  In the almost four years since the end of the civil war, the country seems to be stable and safe.  The UK Foreign Office green-rates the country with no restrictions, and the US State Department has no travel warning and deems the entire country safe for travel by US government employees and their families.

It was not only tourists that kept away from Sri Lanka during its troubles – it was business investors and trading partners too, and now that the country is both safe and stable, both groups of people are flocking back.  With peace is coming prosperity, and in 2011 (the most recent data available) Sri Lanka was rated as the world’s tenth fastest growing economy, with an 8.3% increase in GDP.

My sense is tourism is growing even faster, and the locals are friendly, warm, and welcoming to their foreign visitors.  This year, Sri Lanka was named the top travel destination in the world by Lonely Planet.

So not only can you feel relaxed and comfortable when traveling to Sri Lanka, you should do so soon before the country gets overwhelmed by growing tourist numbers, and before the great values we have negotiated for our February 2014 tour become a thing of the past.

Here’s our page of general information about the Sri Lanka tour next February.  We hope you’ll choose to join us.

What else this week?  Please read on for items about :

  • Air Taxes to Rise?
  • Lessons from the A380 Wing Problems
  • BA Says It’s Not to Blame When Its Engine Catches Fire on Its Jet
  • Air Canada Must Pay More To Compensate Bumped Passengers
  • Virgin America – The Little Airline that Could?
  • World’s Shortest and Most Expensive Flight
  • 747 – RIP?  Or Many More Decades of Profitable Production?
  • Singapore Airlines Bets on Both Horses in the Two Horse Race
  • Trip Advisor Traps
  • The US Doesn’t Wish the World’s Biggest Tourist Spenders to Visit
  • Heathrow to Give Limited Free Wi-Fi
  • Motorola to Make New Smartphone in US
  • This Week’s Hard-to-Believe Flight Attendant Excuse for Booting Passengers From a Flight
  • And Lastly This Week….

Air Taxes to Rise?

President Obama says he needs more of your money the next time you fly.

His budget proposal would increase a range of different taxes on air travel, potentially adding another $24 to the cost of a domestic roundtrip ticket, and even more if you were flying internationally.

The extra fees however are not just for things related to air travel.  They would also disappear into the bottomless pit of the general budget, ostensibly to ‘reduce the deficit’ – and if you believe that, I’ve some prime ocean property in Arizona you might like to buy.

How about reducing the deficit; not by taxing the already over-taxed traveler, who gets unfairly overtaxed on every part of his journey – airfares, rental cars, and hotel stays – but by simply reducing government spending?

And instead of seeking more money to provide good service for arriving international passengers, each one of which represents many thousands of dollars of boost to our economy, why not provide good service ‘for free’ and in recognition of all the extra taxes which their tourist dollars will generate?

Lessons from the A380 Wing Problems

In among all the clamor surrounding the 787 battery fires and grounding, the A380 has managed to avoid much attention regarding a problem that was uncovered in its wings – cracking in some of the 2,000 brackets that hold each wing’s components together.

It is true that this was a relatively trivial and non-safety-threatening issue, but it is also true that no cracking should have occurred at all, and replacing the brackets has been a time-consuming, costly, and inconvenient repair process for the A380 airline operators.

The good news is that cracking in aluminum components is understood and there are excellent procedures to test for and detect any cracking long before it gets to be potentially harmful.

But, and here’s the thing – the cracking, benign as it may be when detected at an early stage, should not have occurred at all.  The A380 went through extensive testing, and was certified as safe by the European equivalent of the DoT – the EASA (European Aviation Safety Agency).

Hmmm – that sounds familiar, doesn’t it.  Substitute wing for battery and EASA for DOT……

Here’s a thoughtful article that says many of the things I’ve been worrying about for some time.  Testing can only test the known unknowns, it can’t test for the unknown unknowns, and Airbus uncovered a number of unknown unknowns which impacted on what had been theoretically ‘proven’ to be a satisfactory wing bracket design.

So, here’s the big thing :  If there are still an unknown number of unknown unknowns (is that too complex a statement?) that can invalidate the results of largely theoretical testing of known materials (ie Aluminum) and the known factors impacting on them, how many more unknown unknowns are involved with a whole new material (composite) such as is now being used in the 787 and soon the A350 too?

That’s my big concern about the 787 (and, yes, about the A350 too).  Sure, the 787 battery problem unsettles me, but my real fear is there’s something else we can’t even guess about waiting to surprise us in a tragic form.  After all, who would have anticipated battery fires?  That was unexpected enough; what next might be waiting to surprise us further?

Of course, we are all for prudent innovation.  But when an airplane manufacturer and its airline clients change technologies for their benefit, not ours (ie to save money), surely it is appropriate to expect them to invest more than the barest minimum of time and money in testing the new technologies.  And surely also it is appropriate for both the DOT and EASA to act as our representatives and to hold the airplane manufacturers to a higher standard than they are.

Oh – that’s another thing in common.  EASA says there was nothing wrong with its certification of the now proven to be inadequate brackets.  The problem was not inappropriate certification, they say.  The problem was inadequate materials.

Maybe that reads more sensibly in the original French, but it sure sounds like dangerous nonsense in English.

BA Says It’s Not to Blame When Its Engine Catches Fire on Its Jet

Talking about airplane problems, and no-one being to blame, a British Airways A319 experienced problems with its left engine as it was taking off from Heathrow, bound for Oslo.  The pilot decided to make an emergency return to Heathrow, and while in the process of turning around, the right engine burst into flames, making for some great video from people on the ground in London and looking up at the time.

The two engine problems and the aborted flight (it landed safely back at Heathrow) is being termed a ‘technical mishap’ by BA – a nice way of avoiding the use of the ‘f’ word (fire).

Emergency preparations by Heathrow emergency services and then the subsequent clean up and clear away after the plane landed caused both of Heathrow’s two airports to be closed for several hours, resulting in hundreds of flights being cancelled at the start of a busy three-day holiday weekend in Britain.  Details here.

So a lot of passengers are now looking to BA for compensation under strict EU rules that oblige airlines to give compensation to passengers on delayed flights.

But BA says that the two engine problems are – hmmmm – not its fault.  If BA is to be believed, it is not obliged to compensate anyone for anything.

Air Canada Must Pay More To Compensate Bumped Passengers

Talking about airlines and avoiding compensation, it seems that one area where the US leads the world is paying passengers compensation if bumped off a flight (‘involuntarily denied boarding’ to use the technical term) – a situation due directly to an airline fearlessly bumping Ralph Nader off a flight some decades ago and ignoring his threats to do something about it.

Canada has its very own Ralph Nader type, a 31 yr old gentleman by the name of Gabor Lukacs.  A couple of years ago he single-handedly persuaded the Canadian Transportation Agency (CTA) to require Air Canada to adopt a fairer policy for compensating passengers for lost baggage, the year before that he won a case against WestJet.

Now, his latest success has been to get the CTA to force Air Canada to increase the compensation it pays to bumped passengers.  Strangely, the CTA seems to do things on an airline by airline basis, rather than establish rules for the industry as a whole, but it seems clear that when AC comes up with new improved compensation, the smaller airlines will have no choice but to copy them.

Virgin America – The Little Airline that Could?

It is an open secret that Virgin America has failed to achieve the great things hoped for it when it first started service, now almost exactly six years ago.

Because the company is privately held, little financial data is revealed, but some needs to be disclosed to the DoT, so we do know that profitability remains an elusive goal, and its growth seems to be tapering off, with no more planes expected to be received until 2015 (it currently has 53 Airbus planes in its fleet).  Not only are no more planes being received, but the utilization on present planes has been dropping, with the planes spending less time each day in the air.

Is there nowhere else Virgin believes it can fly to in the US?  Or is there nowhere else in the US it feels it can profitably fly to?  A ‘yes’ answer to either of these questions would be extraordinary, and one would have expected the airline to be in a scramble to continue growing to get more critical mass and marketplace economy of scale.

Here’s a rather empty article which among other things quotes Virgin CEO David Cush as making the surprising claim that his airline has now reached a safe size where it isn’t at risk of being squeezed out of the market by the majors.  We hope that is so, but with the majors 10 – 20 times larger than Virgin America – and with size no guarantee of success anyway (look at American for the most recent example of that) we’re not sure that the airline should now rest on its laurels and consider its future safe.

We wish the airline well, but are surprised to see it scaling back its airplane utilization.  The old saying ‘a plane should be either fueling, flying, or fixing’ remains as true today as it ever (always) was; you can’t make money on planes you don’t have in the air, only on ones you do.

World’s Shortest and Most Expensive Flight

One wonders what LoganAir’s plane utilization is for the plane it uses for the flight between the Orkney isles of Westray and Papa Westray – the world’s shortest flight, measuring just over one mile and on a good day, taking about three-quarters of a minute from take-off to touch-down.  If the plane is in the air 15 minutes a day it is probably working hard.

The roundtrip flight costs £21, making it not just the world’s shortest flight but also the most expensive – in terms of cents/mile.

This information comes courtesy of an article about one of the LoganAir pilots retiring.  He has flown the journey more than 12,000 times in his 24 years of service – sounds like a lot until you realize it is only 500 times a year, or one round trip a day, five days a week, 50 weeks a year.

747 – RIP?  Or Many More Decades of Profitable Production?

In 2011, Japan Airlines retired the last of its 747 fleet, and now ANA has decided to do the same.  Neither airline has plans for buying new 747-8 replacements, either.

The general reduction in 747 fleets among the major international carriers is nothing new, and has been ongoing for some time, while orders for the latest 747 model – the 747-8I stretched version, have languished.  Many commentators have accordingly joined the dots into the obvious pattern and predicted the end of the 747, at least in passenger configurations (there is still some modest demand for the 747-8F freighter version).

Indeed, in total, the 747-8I has picked up only 31 orders (19 of which are to Lufthansa), and none in almost 18 months.  This compares to 262 orders for A380s.  A great success, it surely ain’t, not that the A380 has been a runaway best-seller either, of course, but its results, when compared to the 747-8, do look truly stellar!

But there is one significant hold-out in this chorus of doomsayers, one company refusing to acknowledge that the 747’s era as the passenger plane super-star that it was for thirty years (ie up until about 2000) has now passed.  That hold-out is Boeing itself, with the head of their 747 program predicting this week that they will continue to build 747s for ‘many decades to come’.

While the number ‘many more decades’ is vague, it seems reasonable to infer that this means at least three more decades, and more likely four or more.  Which would mean Boeing expects, in 40+ years time, to still be selling a plane based on an almost 90 year design.  How likely is that?

If we look back 90 years (to 1923) – well, that’s not fair, because it was the dawn of the age of flight.  But if we look back say 60 years, to 1953, none of the planes being made then are being made now.  Indeed, in 1963, we were still some years away from the launch of the first 737 and 747, while the 727 was a year away from entering service.  None of the passenger jets being made fifty years ago, in 1963, are still being made now.

The 707 had a 21 year production life.  The 727 had a 20 year production life.  The DC9 had a 16 year life and the DC10 an 18 year production life.  The 757 had a 21 year production life.

But the 737 is still going strong after 46 years and the 747 is either on its last legs or struggling after 43 years.

Consider us cynics, but we don’t believe either plane was so brilliant as to survive through almost half of the entire commercial aviation age.  While of course both the 737 and the 747 have evolved over the years, this points to what we see as a problem rather than a benefit – Boeing’s timid evolutionary approach to airplane development, rather than a willingness to continue innovating and pioneering new paradigm-breaking planes such as the 707, 737 and 747.

Even the 787 wasn’t really all that enormous a leap forward.  It still shares the same commonality with almost all other planes of the last 50 years – a flying cylinder with typical wings, engine locations, and rudder/stabilizer.

We need a new revolution in air transport design, or else, yes indeed, we may truly still see 747s in forty years time.  While that might delight Boeing’s current 747 program manager, it exposes Boeing as a whole to the threat of technological obsolescence when a new competitor appears (almost surely in China) with an innovative new technology that displaces Boeing from its leadership position.

As an aside, it is interesting to remember that prior to the 707’s release in 1957, Boeing had spent the previous couple of decades almost entirely out of the passenger plane business.  It was the 707 which caused Boeing to gain (regain?) prominence and leadership in the passenger plane field, and the 737 and 747 that reinforced and extended its leadership role.

But Boeing could lose that leadership position – one it is currently uneasily sharing with Airbus anyway – as quickly as it gained it 55 years ago.

For airplane trivia and history lovers, there’s a fascinating discussion of how Boeing had to choose between two different sets of design criteria in setting the 747-8I performance parameters here, and a bit of pondering about ‘what if’ it had chosen to go the other route.

Singapore Airlines Bets on Both Horses in the Two Horse Race

We’ve recently seen several airlines refuse to show a clear preference as between the latest Airbus and matching latest Boeing planes.

This is slightly surprising – with the mantra for fleet simplification being popular over the last decade or so, and some of the most successful airlines having the smallest range of airplane types in their fleets, and it also marks a weakening of the situation where sometimes an airline would be a 100% (loyal?) customer of either Boeing or Airbus, and not buy any planes from the other company.

The most recent example is Singapore Airlines, which this week announced an order for 30 A350 planes and also for 30 787 planes (details here).

We wonder if this reflects a concern by airlines that they might be reduced to only one major airline manufacturer and so they have made a deliberate decision to keep both companies relatively strong and actively competing against each other?  Or is it foolish to expect such long-term thinking by an airline?

Trip Advisor Traps

The latest embarrassment to Trip Advisor should also be an embarrassment to Peter Hook, Accor’s General Manager of Communications.  This gentleman apparently misunderstood exactly what his job was all about, and in an abundance of zeal posted over 100 hotel reviews, and modestly under a false name.

Amazingly, when reviewing hotels owned/managed by one of the Accor brands (Sofitel, Novotel, Ibis, Mercure, and assorted other names) he gave them excellent reviews, but when reviewing competing hotels, he gave them less positive reviews.

Actually, Hook was very clever.  Rather than giving competing hotels unbelievably harsh reviews, he ‘damned with faint praise’ and would typically give them three (out of five) stars.  Of course, for a luxury up-market hotel, three stars is very disappointing, but by making his reviews ostensibly even-handed, he made his criticisms more credible and more damaging than if he’d slammed the hotel from top to bottom.

Now that he has been outed, he promises not to do it any more.  I’m sure we can trust him to honor his promise….

The US Doesn’t Wish the World’s Biggest Tourist Spenders to Visit

One of the most competitive industries or businesses in the entire world is international tourism.

Tourism is one of the wonder industries.  It is labor intensive, so creates lots of jobs, few of which can be outsourced to other countries.  It uses a renewable resource (ie sights and attractions), and helps a country’s balance of payments – tourism is best thought of as an export business, even though it involves activities within the actual ‘exporting’ country.

Small wonder then that even some of the most closed nations in the world eagerly open their doors for tourists and their cash.  For example, our trip to North Korea last year was brilliantly easy to organize, and the visas were given to us automatically without question, indeed, our handling agency said they’ve never seen a visa be refused.  We just had to email in a basic application and a jpg picture, and a moderate fee (from memory $30 – $50) and the visas were granted.

The most desirable tourists in the world today are the Chinese.  This is because they are exploding in numbers, and when we talk about numbers, we don’t just mean the number of tourists, but also the much more important number – the amount of money they spend.  The Chinese now spend more money on foreign tourism than any other country, and 20% more than the number two country (the US).

I’d also add that my sense is the level of expenditures attributed to Chinese tourists is almost certainly massively under-reported.  My guess is that many Chinese exchange unreported cash in China for foreign currency, take the foreign currency with them internationally, and then spend that ‘under the radar’ while traveling abroad.

This article has some interesting facts and figures on the subject.

Now, for our problem in the US.  Our Visa issuing officials still condescendingly sneer at Chinese people as if they were still a minor third world country, and treat them with disdain and make it difficult for them to visit here.  While we welcome Mexicans as illegal aliens and instant charges on our welfare, for some strange reason we seek to limit the number of wealthy Chinese tourists who would briefly visit, drop thousands of dollars into our economy, and then hurry back home again to a job that pays them better than most of us are paid here.

For a Chinese person to get a visa to come to the US, they have to fill out detailed forms, provide an intrusive amount of detail into their personal, professional and financial lives, and then travel to one of the few US consulate locations in China, stand in line and be treated worse than the TSA ever treats us while waiting much of the day before being granted a cursory one or two minute interview, after which they may or may not be granted a visa.  None of this is cheap – not the cost of the US visa (from memory, about $125!), nor the unavoidable travel costs – probably a roundtrip airfare and a night or two of accommodation, and there’s no guarantee that this investment of several days and many hundreds of dollars will result in a visa being granted.

While most other western countries also require visas from Chinese nationals, it is rare for a country to require an in-person interview, and there’s a general trend for countries to be relaxing visa requirements, often replacing formal visas with electronic instant-issue e-visas – the most recent example of that being the far from progressive nation of Turkey, where the most complicated part of their easy-in-all-respects application being nothing more than making the payment.

Why do we make it harder for Chinese people to come here than it is for them to visit almost any other country in the world?  Surely we want their tourist dollars, because for sure, we desperately need the money they could inject into our economy.

Heathrow to Give Limited Free Wi-Fi

Good news.  Starting on Sunday, you can get 45 minutes of free Wi-Fi each day at Heathrow, with the service being broadly available in all its terminals.

Better still, by reading this, you’ll learn how to make the barely useful 45 minutes into a more valuable 90 minutes of free Wi-Fi each day.  Join the free Heathrow Rewards program – you’ll not only get small discounts on shopping, but become eligible for 90 minutes of free Wi-Fi each day.

Motorola to Make New Smartphone in US

I was strolling through an antique store over the Memorial Day weekend, and looking at a collection of lovely old radios, made in the 1950s, 1940s, 1930s and even 1920s.  Every part of them was American made.  The vacuum tubes, the other electronics, the cabinets, and of course the brand names – all 100% American.

Nowadays, I can go to a Consumer Electronics Show in Las Vegas and walk long aisles, one after the other, without finding a single American product at all.  And the few products with American brand names are no longer made in the US.

That raises an interesting question.  We have sort of given American manufacturing a ‘get out of jail free’ card – ‘that’s okay guys, we understand you can’t compete because off-shore companies have lower labor costs’; although one could have an interesting and extended discussion as to how deserved that concession is.

But what about the marketing?  Even the few remaining shell US companies that sell foreign-made goods but with a US brand on them seem unable to beat foreign companies when it comes to establishing marketing and distribution throughout the US market.  Surely the best person to market to American consumers is an American – someone who shares the same customs and culture?  Surely the person who can best negotiate with an American company/customer is another American company/customer – someone who talks the same ‘language’ of business and understands what is needed to ‘do a deal’?

I’m not offering answers to these questions, but I am raising the questions as ones which have been insufficiently asked and seldom answered.

Now to turn to the good, Motorola – albeit now a Google subsidiary, and of uncertain future viability as a standalone company – has announced it will build its new smartphone, to be called the Moto X, at a former Nokia factory in Fort Worth, TX.  This will make it the first and only US assembled smartphone.  But, don’t get too excited.  Many of the higher value components in the phone will still be sourced from other countries (ie screen and CPU).

As the linked article points out, the labor costs in a smartphone are trivially small.  A Samsung Galaxy S4 has $229 of componentry within it, but only $8 of assembly costs.  If we assume US labor costs are twice what they are in S Korea, that’s still only adding another 3% or so to the total cost of the unit, and maybe there are some countervailing benefits such as shorter supply lines for finished goods, lower freight costs, etc.

This makes me even more keen to know more about this rumored wonder-phone, probably due to be released late in the summer.

In a related article, there’s a list of the world’s 12 largest phone handset makers.  The top spot went to Samsung (S Korea) with a 27% market share, followed by Nokia (a Finnish company, but not sure where their phones are made) with a 15% share, then Apple (US company with phones made in China) with a 9% share.  ZTE (China) and LG (S Korea) both had 4% market shares, then came Huawei (China) with 3%.

Motorola barely made the list, tying for last place with a 1% market share.

Looking back five years to the first quarter of 2008, Nokia had a 41% share (now down to 15%), Samsung had a 15% share (now up to 27%), LG had a 9% share (now 4%), Motorola had 10% (now 1%) and Sony Ericsson had 8% (now 2%).

Here’s an interesting thought – which is worse?  To lose 26% of the market, dropping from 41% down to 15% (ie Nokia), or to lose 9% of the market, dropping from 10% to 1% (ie Motorola)?  Of course, neither is particularly good, but viewed from the corporate perspective, seeing your sales share drop ten fold is perhaps worse than seeing it drop by almost two-thirds.

Let’s hope Google breathes new life into Motorola.  But I’d not bet on it.

This Week’s Hard-to-Believe Flight Attendant Excuse for Booting Passengers From a Flight

A group of six passengers were happily chatting among themselves while waiting for their Spirit flight to push back from the gate and fly them from San Diego to Las Vegas, where they were to attend a friend’s anniversary party.  The six were all Russian, and so were talking in Russian.

The next thing they know, a flight attendant suddenly appears and orders them off the flight, with no reason given.

They claim that another airline staffer subsequently told them that the flight attendant felt intimidated by hearing them conversing in a foreign language.

Spirit’s first response was to allege that the group was being loud and disruptive (details here).  The group says they were never warned, and claimed to be speaking no louder, and perhaps more quietly, than other passengers on board.

Subsequently, as reported here, it seems that Spirit may be saying that the warning was made over the plane’s PA system, which truly would be the most bizarre way of warning a group of foreigners to quieten down.

Happily though, all of this could be substantiated.  So, Spirit, how many of the passengers around these six Russians complained and subsequently made formal statements confirming they considered the Russians to be loud and disruptive?

Of course, we know the answer to that question, don’t we.  None.  If Spirit had even the whiff of a corroborating story from any passenger, they’d be trotting it out in triumphant self-justification.  But they are silent about this, making it seem that their cover-up is nothing more than that – a transparently thin tissue of lies to try to excuse the inexcusable – six passengers suddenly booted off a plane, without warning, having been guilty of the ‘crime’ of speaking among themselves in a foreign language.

The fact that no police were involved seems to bear out the fact that this was a totally without-foundation act by a xenophobic flight attendant and a pussy-pilot unable to stand up for the passengers he was paid to fly, not to deplane.

The good news?  The brother of one of the six passengers is an attorney, and, yes, he is threatening to sue.

And Lastly This Week…..

How’s traffic in your city?  No matter how bad it might be, the chances are it isn’t nearly as chaotic as in Ho Chi Minh City (fka Saigon).  Here is a fascinating video of an intersection – how amazing that it actually seems to work.

Truly lastly this week, if you’re still casting about for a reason to come join us in Sri Lanka next February, or indeed to travel anywhere at any time, surely this will have you calling your travel agent in double-quick time!

Until next week, please enjoy safe travels (and the benefits that inure)






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