Good morning from Skift. It’s Tuesday, May 3, in New York City. Here’s what you need to know about the business of travel today.
Today’s edition of Skift’s daily podcast looks at Spirit’s effort to manage its takeover, the labor challenges facing corporate travel managers, and how Standard hotels is ready for hospitality in the post-Covid era.
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Spirit Airlines said on Monday it will reject a $3.6 billion offer for the carrier submitted by JetBlue Airways last month, instead continuing to pursue a $2.9 billion merger with Frontier Airlines. Why? Airlines Reporter Edward Russell writes it’s largely because Spirit didn’t want to assume the risks of a deal with JetBlue.
Spirit CEO Ted Christie told its management team that the carrier didn’t envision the U.S. Department of Justice approving a move that would leave Frontier as the only large ulta low-cost carrier in the U.S. The rejection occurred even after JetBlue sweetened its offer last week, which included a commitment to divest all of Spirit’s assets in Boston and New York. However, JetBlue has refused to end its controversial Northeast Alliance with American Airlines despite Spirit’s concerns. The alliance is the subject of the lawsuit by the DOJ, which has argued the partnership would reduce competition on the East Coast. Aviation analysts believe the lawsuit would complicate any Spirit-JetBlue deal.
Savanthi Syth, an analyst at investment bank Raymond James, said on Monday that Spirit shareholders will now vote on its proposed merger with Frontier. A Frontier-Spirit merger would create an airline with a share of just under 8 percent of U.S. flyers based on 2021 numbers, according to U.S. Bureau of Transport Statistics data.
Next, corporate travel managers are grappling with a labor shortage that’s putting the sector’s recovery in jeopardy, writes Corporate Travel Editor Matthew Parsons.
A recent poll by the UK’s Institute of Travel Management revealed that the biggest point of frustration for corporate travel buyers as business travel returns is dealing with a reduced workforce. Scott Davies, the institute’s CEO, said staffing issues they’ve dealt with over the last two years have forced them to assume greater responsibilities. An industry insider said corporate travel agencies are struggling to recruit staff members because they let a lot of experienced employees go during the height of the pandemic.
Executives such as John Hobbs Hurrell — head of UK agency consortium Advantage Global Network — have attributed the staffing struggles to workers finding positions in other fields. Hurrell acknowledged that corporate travel agencies need to increase pay to attract qualified candidates.
Finally, more companies are investing in lifestyle hotels, but not Standard International. CEO Amber Asher maintains lifestyle hotels have been a part of its DNA for more than 20 years, reports Corporate Travel Editor Parsons in an exclusive interview ahead of next week’s Skift Future of Lodging Forum.
Asher, who will speak at the Forum in New York on May 12, said Standard International doesn’t need to follow in the footsteps of rivals seeking to add luxury and lifestyle hotels to their portfolios. She added the company is ready to jettison some of the Covid-era modifications that guests have come to expect in hotels, including QR codes and housekeeping upon request. Asher said the reason for the moves is because guests are eager for the return of full-service hospitality.
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