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July 17, 2001
Travelbyus.com Founder Buys ITEX Franchise
Peter Adam of British Columbia province reportedly has paid the ITEX Corporation, a retail trade exchange, $400,000 for a franchise in Vancouver. Adams, with roots in New Zealand, was a founder and vice president of travelbyus.com doing business in Canada.
The franchise agreement provides that ITEX will assign 1000 of the former Ubarter.com Vancouver clients to Adams. Collins Christensen, CEO of ITEX, says the sale of the franchise was made possible by the recent purchase of Ubarter.com of Canada. (Several months ago ITEX acquired all of Ubarter.com of Canada for less than the recent franchise sale.)
Hotels Suffer Operating Profit Decline This Year
The Atlanta-based Hospitality Research Group reports that travelers are taking a bite out of hotels' profit margins by choosing cheaper digs, ordering less food, and using cell-phones. They predict the average U.S. hotel will suffer a 5.6% decline in operating profits this year. (The anticipated drop this year compares with a 10.1% increase in 2000.)
Hotels are seeing a big dent in telephone usage, which accounts for 2% to 2.5% of their revenue, as travelers find it less expensive to use their cell-phones than to pay hefty hotel phone charges. Guests are also spending less on room service and in-hotel restaurants.
Price pressures are expected to continue into next year because they must begin negotiating prices with big customers in the latter half of this year. Hardest hit are the resorts and high-end hotels.
Airlines Recoil From Major Threat Of Business Traveler "Buydown"
As a result of declining demand from high-fare business travelers, the nine major airlines will post a combined second-quarter loss, the first since 1992. The group is expected to lose money for the full year as wellin what would be the first annual loss since 1994.
In short, airline revenue has fallen sharply this year as companies took exception to the airlines raising business fares six times last yearsending average business fares almost five times above leisure fares.
Companies have cut travel budgets by keeping employees at home or forcing them to buy lower-price, advance-purchase, non-refundable tickets, which can slash costs as much as 75% for some routes! These business passengers flying like leisure travelers--traveler "buydown"is the biggest threat to the airline industry.
Here And There. . .
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