Canadian Wanderer

Travel plans, thoughts & lessons

Month: October 2017

Statistics out showing the Iceland tourism industry’s portion of GDP doubling since 2010

photo by author

Having many warm memories of my visit to Iceland I was interested to recently read just how big tourism to this Nordic nation has become.

According to figures from Statistics Iceland the share of tourism in Iceland’s  Gross Domestic Product (GDP) doubled from 3.3% in 2010 to 6.7% in 2015, the last year for which the government department has final figures. A leading Icelandic financial institution, Landsbankinn bank, has estimated the 2016 tourism percentage of GDP at 8.2%. Despite the dramatic growth of tourism it ranks as the fifth biggest industry behind others including fishing and fish processing, manufacturing and social work.

In terms of international arrivals in 2009 Iceland welcomed 464,000 tourists, a number dwarfed by the 2016 count of  nearly 1.8 million however there’s some evidence the numbers have started to plateau based on overnight hotel stays in July 2017 compared to the same month the year prior. To put those numbers into some perspective remember that Iceland’s population is only 330,000 and are easily outnumbered by the annual number of Canadian visitors alone.

The current tourism boom started in 2010 when the volcano nobody except Icelanders can pronounce Eyjafjallajökull erupted shutting down transatlantic travel and focusing the world’s attention on Iceland. Turning adversity into an advantage the country’s tourism bureau promoted the wildness of the country and rather than reacting negatively the waiting world responded with interest and has beat a mass tourism path to the country’s door every since.

The country’s tourist board has launched a brand new video campaign having some fun with Iceland’s notoriously difficult-to-learn language dubbing their song  “The Hardest Karaoke Song in the World”.

Any travellers contemplating a visit to Iceland should plan it well in advance, especially for the peak Summer season between June – September when hotel occupancy rates run 92% keeping nightly rates high.

 

What’s in a name? WestJet calls a new ultra low cost carrier Swoop

WestJet recently announced the name of its Ultra Low Cost Carrier, or ULCC for short, set to take off in early 2018 and the chosen name, Swoop, left me quite underwhelmed.

For a company with an excellent track record in its first two decades and hit a home run with the moniker of its regional airline, Encore, naming this new division something more befitting  a liquid laundry detergent brand seems a misstep for WestJet. While the name wasn’t to my or a number of my friends, family & co-worker’s liking the name was chosen for a reason according to Bob Cummings WestJet Executive Vice-President, Strategy and the executive member responsible for the launch of Swoop in this press release. “The name Swoop denotes exactly what we plan to do. It’s a powerful verb that demonstrates we plan to swoop in to the Canadian market with a new business model that will provide lower fares and greater opportunity for more Canadians to travel.”

ULCC’s typically flourish in markets with large populations aiming for a subset of leisure travellers wanting low costs above all and are willing to pay fees for additional services such as checked bags or advance seat assignment but given Canada’s large size and sparse population it remains to be seen whether there’s a large enough consumer base to draw upon to make Swoop a viable alternative. Other airlines have tried to go after this market including NewLeaf which in recent months morphed into Flair Airlines but none have had the big brand backing of such a major player in the Canadian aviation industry as WestJet and all the economies of scale that go with it.

Beyond the name, business model, and Calgary headquarters however little else is known about Swoop including possible routes. WestJet executives have said that they would target border airports in an attempt to  capture Canadians flyers who cross the border to fly on U.S. ULLC’s but that trend is on the decline according to WestJet CEO Greg Saretsky noted in this article. “There is less leakage, mostly a function of the bargains having gone away with the weakening of the Canadian dollar,” Saretsky said. “It’s great to see Canadians flying from home and WestJet is benefitting from that.” The appreciation of the Canadian Dollar relative to its American counterpart in recent months may alter that falling cross-border traffic but is it really enough to feed a start-up ULCC?

In addition there’s the matter of route network as should existing mainline WestJet routes such as Edmonton – Winnipeg for example be replaced with Swoop operated flights it’s possible WestJet could simply be moving current customers from its full service brand to its no frills division rather than  attracting new passengers.

There’s much that remains to be seen about this ULLC experiment but if there’s one thing I’ve learned in watching WestJet evolve over two decades it’s that it has a knack for defying the naysayers and charting its own course onward and upward so the gamble might just pay off despite the perceived pitfalls and clunky name.

 

The problem with airline mistake airfares

Photo by author

I like getting deals on airfares around the continent or around the world and have jumped on a number of airline mistake fares over the last fifteen years from a $120 roundtrip flight to  New York City to a $400 hop to Hong Kong over Chinese New Year but recently have seen novices make major errors in their rush to grab the deal so will share some tips to avoid possible problems.

Mistake fares are airfares that are incorrectly priced when made available for sale to the public  or “published” whether through online sales channels or travel agent global distribution system (GDS) . It could be a missed decimal point that makes a $5,000 fare into a $500 fare, one-way fares inadvertently loaded as round-trip fares or hefty fuel surcharges excluded dropping a fare by hundreds of dollars.  These mistake fares are different animals than airline special one-day sales or deeply discounted seat sales although at times it can be hard to tell the difference.

As the error fares are usually spotted quickly and promoted widely by a growing number of websites and blogs their lifespan can be as short as a few hours to as much as one day so there is a degree of urgency for those eager to grab a deal before it is withdrawn or corrected. That urgency however shouldn’t prevent consumers from doing a little due diligence to educate themselves on exactly what it is they are purchasing because by the Latin maxim ‘caveat emptor’ it’s a case of let the buyer beware. Here are a few tips to avoid possible pitfalls:

  • research the airline or airlines(s) to find out whether there are checked bag or advance seat assignment fees as these can easily add up to $100 per person
  • check the airline and type of economy seat. One recent deal from Edmonton to Osaka to Nagoya for $668 round-trip with taxes included the trans-Pacific flight from Vancouver on Air Canada Rouge which is a charter airline-like airline division of Air Canada with fewer in-flight comforts and tighter seat pitch than other airlines which could make the 11-hour flight uncomfortable for an unsuspecting flyer
  • ensure you book the ticket in the exactly the same way you name is shown on your passport. It may sound elementary to know your own name however once recently I heard from someone who hadn’t taken the time to check how their name was shown on their passport and confirmed the ticket as Mike instead of their given name of Michael which turned out to be an $400 lesson as the ticket became useless since the airline and security would not allow the passenger to board due the name error and no changes on the very restrictive ticket were possible
  • once you have a ticket-in-hand don’t go too far planning expensive add-ons such as hotels, tours, concerts or shows because while fare errors are the airline’s fault and are usually honoured there have been cases where they aren’t and the tickets cancelled and the amount paid refunded
  • don’t expect to be able to make changes to a ticket issued on an mistake fare as either changes aren’t permitted or if they are the airline will charge you both a change fee which can as much as  $200 plus the difference in fare between your new travel date and your original ticket which since it was stupendously low could also cost several hundreds of dollars or more. Where there are problems is when flyers buy error fares 10 months in advance, for example, and find down the road the date confirmed conflicts with other plans but I would suggest thinking of these as one-shot deals not easily or cheaply changed. Sometimes the prices are so low, like my $120 roundtrip to New York, that the not using the ticket as planned isn’t a huge financial penalty but when the amount is several times higher it makes throwing it away unused much harder
  • if you have a relationship with an experienced travel agent it can’t hurt to get their input and if possible have them issue the ticket to take the onus for entry errors off you. Even if there’s a small service fee applied to issue the ticket the travel agent may point out things you weren’t aware of or didn’t appreciate so isn’t that small cost worth the piece of mind knowing you’ve covered all your bases? There could even by a chance the agent may spot concerns and recommend against going ahead with the error fare ticket purchase saving you not only money but a possible horrible holiday
  • weigh time vs. money as cost and convenience rarely come together so ask yourself if an inconvenient set of flights is really worth the cost. For example, just because the scenic route on the air deal back from Glasgow via the U.S. is the lowest price is 6 hours longer and enduring U.S. Customs really worth $60 over a shorter and more direct routing that avoids a U.S. connection? Time literally is money and within reason I’ll trade the latter for the former.

These are some things to consider when browsing for air deals as you want to ensure you are getting a deal and not an ordeal. Do you have stories about flying or buying mistake airfares or outrageous airlines airfares? If so please post your comments as I’m always interested in hearing feedback from others.

 

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