Downgraded: 787s on Delta
For those who thought that Delta would soon by flying the Boeing 787, thanks to their takeover of Northwest, prepare for a decade of disappointment. Northwest was an early buyer (in May 2005) of the 787 and was originally scheduled to take delivery between 2008 and 2010. Thanks to delays, that delivery timetable is over two years out of whack. But now Delta has pushed the delivery back even further: Now, Delta will receive the planes between 2020 and 2022. That’s a long deferment.

Upgraded: Ideas for bad Hollywood movies
Downgraded: Congolese carry-on inspections
Headline: “Crocodile on plane kills 19 passengers“… I immediately had visions of a crocodile biting its way through the passenger list. But the truth is more unfortunate. A crocodile hidden in a carry-on bag gets loose, people panic, plane goes out of balance, aircraft crashes. Very sad. And preventable.

Downgraded: Cruise ship pricing
The cruise ship lines are taking a page from the airlines and going a la carte with their services, slowly but surely whittling away at the “all-inclusive” pricing plans that were the hallmark of cruising. Sure, there have been upcharges for shore excursions, but now you have to pay up for certain meals, services, and options. Looks like easyCruise‘s fully-a-la-carte model may not be so farfetched after all. (Thanks, Bill!)

Upgraded: Cross-selling of Hotwire inventory on Expedia
Expedia is now widely selling Hotwire’s hotel inventory as “unpublished rates.” Like on Hotwire, the hotels won’t be listed by name, just by star-level and city zone. Since Expedia and Hotwire are part of the same parent company, I’m surprised it’s taken this long.

Upgraded: The last frontier of domestic inflight wifi
Aircell’s Gogo service has launched inflight wifi within the state of Alaska, for those traveling on Alaska Airlines. For now, the service only exists between Anchorage and Fairbanks, and Alaska Airlines is giving it away for free. It’s slated to be complimentary until the entire state is blanketed with signal availability.

Upgraded: Traveler seat-selection stereotypes
The folks at Hunch have found significant personality and life-experience differences between those who prefer aisle seats vs. window seats. It’s based on poll data. ME, I prefer the window seat, not just because it makes napping easier, because I never tire of looking out the window and staring down from 35,000 feet. And yet, my vita reads much more like the aisle passenger’s. Call me an outlier.

Upgraded: Inflight wifi subscriptions
Gogo Inflight (aka Aircell) is making its monthly subscriptions for inflight wifi applicable across airlines — Air Canada, AirTran, American, Delta, US Airways, and Virgin America, to name a few. They’re also introducing discounts: For $19.95 in the first month and $34.95 each month thereafter, it’s all-you-can-surf pricing. I like. I like a lot.

Upgraded: Pilots on the edge
Upgraded: Headline writing
Great headline for a post: “United Pilot Loses Cool, Pants.” Poorly-played, trouser-dropping United pilot. Well-played, BlackBook!

Upgraded: Smaller airports near large cities
Downgraded: Methodology
CheapFlights has released their list of the “cheapest airports” in America, and some smaller airports near(ish) larger cities are on the list. Burbank, Long Beach, Bellingham… no huge surprises. But these lists are perpetually flawed… who edited this thing? Chicago-Midway, Chicago-O’Hare, and Chicago-All Airports on the same list?! The “CHI” code doesn’t really count, guys…

Downgraded: Travel insurance in the UK
If you’re planning to buy travel insurance in the UK, prepare to pay an “ash tax.” Yes, a surcharge to cover prospective volcano ash delays and cancellations.

Upgraded: The ubiquity of opaque bookings
Expedia, which owns Hotwire, will be integrating Hotwire’s opaque (i.e., unnamed until purchase completed) hotel supply into the regular Expedia sales channel. Travelocity added “top secret hotels” back in March. I guess it’s Orbitz’ turn next?…

Upgraded: Yada, yada, yada
Remember the “YADA,” the roving check-in unit being tested by American Airlines last year? It’s coming to LAX.

Municipalities across the country have been suing the online travel agencies, charging them with cheating the local governments out of lodging taxes. Agencies responded by keeping hotels in those cities out of searches. Until now, it’s been primarily smaller cities like Columbus, Georgia. But last week, the state of Florida got in the game, suing Expedia and Orbitz, claiming that the agencies failed to pay the full amount of taxes owed.

The state’s argument rests on the distribution model of the big agencies. When you book a $150 room with a hotel directly, the rate you reserve is the top-line number the hotel receives. Taxes are calculated on the basis of that $150 price, and submitted to governments accordingly. When you book with an Orbitz, Expedia, Travelocity, Priceline, or Hotwire, you may be paying one price, but the agency is paying another. So you may pay $150, but a Travelocity may be paying $100 to the hotel and keeping $50 in profit. For such reservations, the hotel submits taxes based on the $100 wholesale price. State and local governments argue that they should be receiving the taxes based on the retail rate, not the wholesale. So a thousand lawsuits bloom.

When I visited Orbitz headquarters in Chicago at the end of September, I asked Brian Hoyt, the company’s Vice President of Corporate Communications & Government Affairs, about this legal trend. Hoyt replied that the premise of these suits was fundamentally wrong: The lawsuits presumed that the agency was the hotelier, when in fact they were just the middleman, adding a convenience charge to the booking that they negotiated for their customers. “Orbitz is no more a hotelier than Ticketmaster is a baseball team.”

But the state of Florida has just upgraded Orbitz to the big leagues.

I’ve been sympathetic to the agencies on this front since I first posted about it in May. But the agencies aren’t doing themselves any favors: The problem for Orbitz and their peers is exacerbated by the fact that the agencies don’t break out their prices in a transparent manner. The $150 rate in the example above doesn’t show up as $100 plus $50 in fees. It shows up as $150.

Further, the agencies tack on extra “taxes & fees” (reduced recently, admittedly, but still there) without explaining the breakdown. Since the margins on hotel bookings are fat, and the taxes are based on the lower wholesale rate, there’s some room for profit in those fees, too. (It’s much like the “handling” in “shipping and handling” charges.)

The Florida case is a huge deal for the agencies, and the consumers who book there. Just the Orlando and Miami bookings alone would hurt the companies’ bottom line.

Let’s assume for the moment that the agencies lose this battle, regardless of the merits of the argument. One strategy would be to lobby for a federal solution, in which a national legal standard for tax collection is determined and applied federally. Another strategy would be to reform the ways in which agencies quote hotel rates.

Look at the these two current examples of hotel rate and tax quotation:

Expedia:

Orbitz:

Same hotel, same dates. First off, note the slight variation between the agencies. The difference may be due to variation in negotiated rates, or in fees. But you won’t ever know, because the agencies aren’t telling you what you’re actually buying.

I can understand the why the agencies want to keep their real rates quient. But since the prices aren’t broken out, it’s possible for states like Florida to launch lawsuits. If the agencies can’t get a federal solution, they may need to start quoting the wholesale rates plus the fees.

And if these lawsuits lead to greater price transparency, that’s going to be a huge change.

Upgraded: Continental Airlines BusinessFirst seats
Continental Airlines’ international business class seats are getting a facelift. Initially promised back in August 2008, the first of the new 180-degree lie-flat seats finally debuted last week. (They call them “BusinessFirst,” but let’s be real, it’s really business class.) The new seats are four inches wider than the old seats. The interactive tour of the seat is here.

Upgraded: Frontier Airlines, front half
Downgraded: Frontier Airlines, rear half
Frontier Airlines is reorganizing the seatmap to put in an extra-legroom section in economy, a la United’s Economy Plus. The section, dubbed “Stretch,” will have 36 inches of pitch between seats. Seats in the rear will have between 30 and 32 inches. 30? That is tight.

Upgraded: The Expedia-Choice Hotels War
You may recall the spat between the Choice Hotels chain and Expedia. Expedia demanded numerous draconian terms of Choice, and Choice said no. But now… As of this evening, Choice is back in. But no details yet on what the deal actual consists of. Stay tuned.

Upgraded: Ways to share your miles with veterans
It’s not new, but on this Veteran’s Day (or Armistice Day in the UK), you may be interested in the Fisher House Foundation’s program that accepts frequent flier miles to share with “military (or DoD civilian employees) hospitalized as a result of their service in Iraq, Afghanistan, or surrounding areas, and their families. These tickets can not be used for R&R travel, ordinary leave, emergency leave, or other travel not related to a medical condition.”

Upgraded: Your ability to earn lots of British Airways miles
Chase and British Airways have launched a pretty amazing airline mileage-earning credit card offer. 50,000 BA miles after one purchase, then 50,000 more after spending $2000 within three months. Gary Leff has thought this through and come up with a scheme for 420,000 miles between two people. That’s a lot of free tickets for a $75 annual fee.

Downgraded: Track suits
A Best Buy executive says that United refused him an upgrade because he was wearing a track suit. “United says there is no passenger dress code, but they cited two rules. Ticketed passengers can not be barefoot and must be clothed.” Standards!

Upgraded: Fees for Expedia phone bookings
Expedia announced that it was dropping the booking fees it charged for booking any flight, car rental, hotel or cruise on the phone. As online agencies compete to attract customers, this is the latest fee to drop. Yay, lower fees! Priceline immediately tweeted that they had never had phone booking fees. Nyahh.

Upgraded: Responsibility for rental car reservations
Avis Budget Group has worked with global booking systems to prepare their networks for an eventual introduction of no-show fees for car rental bookings. Frankly, I’m amazed that this is a fee that hasn’t been enforced more widely already.

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An article on the website of the trade journal Hotels sounds an alarm to hoteliers, and by extension, to consumers: Expedia and its sister site Hotels.com are blocking hotels under the Choice Hotels umbrella from searches on their sites.

The alleged reason? Here’s a quote from the piece, for the wonkish:

For some time now, we have been hearing from many industry sources that during renewal negotiations Expedia/Hotels.com has demanded new terms and conditions that are against everything the hospitality industry stands for: last room availability, guarantees that the best rates are only found on Expedia/Hotels.com sites, penalties to properties that do not use their sites 100% of the time, etc. These contract renewal “negotiations” have been described to us by some participants from various hotel companies as “here are our terms – take it or leave it”-type of meetings and “practically lack of any essence of a real negotiation,” etc.

In other words, these new terms and conditions demanded by Expedia will effectively take away hoteliers’ rights to manage inventory and rates at their own hotels, destroy channel management and rate parity, and will eventually lead to a long-term erosion of hotel brand and price integrity in the same manner it did after 9/11 in 2001.

Since Choice is apparently not playing along, they’re missing from search results on Expedia-owned sites. That means that customers looking for a hotel will have to look somewhere other than Expedia if they want a more complete picture of the lodging landscape. That’s nearly 5000 properties that are off of Expedia’s grid. And there may be others.

Granted, the Choice properties (Quality, Comfort, Econolodge, Clarion) aren’t ones that I long to be staying at. You may not miss them. But for the budget-minded or the roadside sleep-seeker, these brands are generally reliable, standard motel fare. And now, on Expedia, it’s as if the hotels didn’t exist.

Part of me doesn’t have a problem with this. The big online travel agencies aren’t search engines. They’re businesses, and they’re trying to make as much money as they can. They don’t claim to represent every hotel in the world, and it’s their prerogative to keep out a company that isn’t willing to ante up.

But for consumers, it makes apples-to-apples comparisons harder, and thus makes loyalty to a single agency hard to justify. It also makes metasearch more important. Using a search like Kayak, which once claimed to want to catalog every hotel on the planet, looks more attractive for first-cut hotel searches.

Expedia is risking losing customers’ trust. If the agency wants to hardball its suppliers, that’s its option. But consumers would be right to ask if Expedia is in their corner.