Airline Shakeup: New DOT Rules & Surprising Rankings

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Today we look at the ever-changing world of travel and discover valuable insights to elevate your adventures. Explore game-changing Department of Transportation rulings that will impact airline compensation policies and enhance consumer protection. Learn about the latest trends in transparent pricing and the growing influence of online travel agencies. Plus, get expert tips on travel insurance, baggage coverage, and leveraging credit card benefits to make the most of your journeys.

Discussed in this Episode:

  • The exciting opportunity to win a luxurious mystery destination getaway
  • Game-changing Department of Transportation rulings that will impact airline compensation policies and enhance consumer protection
  • The importance of transparent pricing in the travel industry and recent legislative efforts to ensure fairness
  • Expert tips on travel insurance, baggage coverage, and leveraging credit card benefits
  • The latest American Customer Satisfaction Index results, revealing surprising airline rankings and shifts in customer perception
  • The evolution of the airline industry and the need for renewed competition to improve service quality and pricing
  • The staggering $475 billion in U.S. travel bookings for 2023 and the growing influence of online travel agencies
  • The value of working with travel advisors or joining private travel clubs for personalized, hassle-free experiences

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Transcript

Mike Putman:
Hey, travel enthusiasts, welcome back to another exciting episode of No Tourist Allowed. I’m Mike Putman.

James Ferrara:
And I’m James Ferrara. Before we dive into today’s topics, we have some thrilling news to share with you all.

Mike Putman:
We’re hosting an incredible travel destination raffle giveaway, and you won’t want to miss out on this opportunity.

James Ferrara:
One lucky listener is going to be the winner of a luxurious three-night, four-day, all-inclusive trip for two to a mystery destination. We’re keeping the location a secret for now, but trust us, it’s going to be an unforgettable experience.

Mike Putman:
Now, here’s how you can increase your chances of winning if you haven’t already. Head over to notouristallowed.com, find the button that says giveaway, and join our newsletter. By doing so, you’ll automatically receive five raffle entries.

James Ferrara:
But we’re adding a fun twist to the giveaway. If you think you can guess the mystery destination, go ahead and send us your best guess. Whether you’re right or wrong, you’ll earn an additional five points just for participating.

Mike Putman:
That’s right. You have nothing to lose and everything to gain. So sign up for our newsletter, take a shot at guessing the destination, and you could be jetting off on the trip of a lifetime.

James Ferrara:
Stay tuned for more details on how to enter. And when we’ll be announcing the lucky winner, trust us, you don’t want to miss out on this incredible travel opportunity.

Mike Putman:
Now, let’s get back to today’s episode and keep your ears open because we might just drop a few hints about the mystery destination throughout the show. Hello, everyone. I’m Mike Putman.

James Ferrara:
And I’m James Starr. Welcome to No Tourists Allowed. As opposed to some other, in an alternate universe, is there a podcast called Tourists Allowed? There might be.

Mike Putman:
Possibly, yeah. I had to keep myself, yesterday I was writing something up and I put no tourist without the S allowed, which it’s notouristallowed.com too, for those of you who’d like to go visit our website. Yeah.

James Ferrara:
And what we’re about is we’re about helping you travel better. Now, Mike and I both have a combined, I don’t know, it’s getting close to 100 years now in the travel industry, seriously, and deep in the travel industry at a very executive level, deep into technology, deep into relationships with all the major brands that you know. So we really do try to have a lot to bring to you, a lot of value to bring to you about understanding travel, how it works, what your options are, and how to get the most out of it, how to travel in a way that is truly memorable and not just touristic, right? That’s what we’re about.

Mike Putman:
Yeah, authentic is the word. How to be there and not look like a tourist and not wear the flowery lace shirt, but to have a good time and immerse yourself in the local culture.

James Ferrara:
Yeah, but we did have an interesting episode not too long ago where we talked about whether or not there is too authentic, right? So there are things that could be very, very authentic, but not necessarily very pleasant for travelers. So it’s an interesting fine point, an interesting debate about what it really means to travel authentically. But we want to get you out of the big box hotels, and we want to get you out of the crowded landmarks, and to see something and feel something more authentic about the places you’re visiting. Part of what we do here, Mike, and I should say up front, we do some giveaways here. And a little bit later, we’ll talk about what that giveaway is this time around. But we’ve given away cruises and vacations. So just another reason for you to come and visit with us once a week and listen in. Yeah. But what we also do here is keep an eye on the headlines, right, and on the news, because like anything else, and maybe more than anything else, travel is changing all the time. New stuff all the time. And Mike, you’ve had your reading glasses on lately, and you’ve caught a couple of interesting things.

Mike Putman:
Yeah, yeah. You know, being in the space, times are changing. And one thing I want to share out is the Department of Transportation ruled just within the last week, They passed some very significant rulings that are going to change how consumers are compensated when airlines make a boo-boo or something happens. And as many of you, I’m sure, have experienced in the past where you’ve maybe you’ve flown and your flight got canceled or it got significantly delayed.

Mike Putman:
And, you know, the way the industry has changed, you know, years ago, if your flight was delayed overnight, they would hand out, you know, certificate. Here’s a hotel. Here’s a food voucher. You know, they’d kind of take care of you. And today that happens sometimes, but not all the time. And also when they cancel, the airlines have canceled flights, they often will try to give you a voucher back rather than give your money back. And so the Department of Transportation has just came in with some pretty significant changes that are going to require the airlines to refund your your form of payment automatically if they cancel a flight for any reason. So even if the flight is, if it’s a weather delay, they are required to refund you back in cash or refund your credit card, most likely, if you so desire. And that will be the default setting.

Mike Putman:
Also, if your flight is significantly delayed, which I think they have that the word significantly means three hours on a domestic flight and six hours on an international flight, if I remember correctly, then again, it could be mechanical, could be, you know, their captain can’t fly anymore because the flight was delayed and that would put him over on his hours. Whatever the reason is, they’re going to be required to give you back a full refund or and you used to be rebooked as well. So you still have that that that option. But at least, you know, for people like if you’re going to a wedding, as an example, right, and the wedding’s on Saturday and you’re flying out on Friday night and the last flight of the day is canceled. You don’t want a voucher. I mean, it’s going to be too late to get to the wedding. You just want your money back. Right. which seems… Seems really fair.

James Ferrara:
And the voucher processes and the refund processes were a little difficult to navigate through. And this just clarifies things for everyone. Also, part of this new ruling and this new legislation is around upfront, like transparent pricing, too. There was just too much going on where, you know, you bought the ticket for $500 only to find out that there’s another $200 worth of fees and things you have to pay for, like luggage and so on. So it’s not really $500. It’s really $700, right? Right. So this drip pricing where they keep adding just a little bit more and not just airlines. But, you know, as we’ve talked about here before, this was happening a lot at hotels where you were quoted an amount per night or an amount for the stay. But then in addition to that, and particularly when you checked in at the hotel.

James Ferrara:
Being hit with another $30 or $40 or $50 in resort fee per day to stay at that hotel. And it wasn’t properly, clearly disclosed up front. So we have some legislation that has passed in California. Now legislation that is passing at the federal level that says you can’t do that anymore. The price you show me at the beginning has to include everything that’s mandatory in order for me to purchase that flight or stay at that hotel. And that’s a really good change. We’ve had sort of truth in advertising laws in travel for a long time, and it’s applied to other things like car rentals. I’m not sure you guys know this, but you might go into a particular market, and I know Las Vegas is a bad one, where the car rental might be $35 a day. But then the airport fee, tourist fee, local tax, everything that gets applied to that could be.

James Ferrara:
Double that amount. In other words, $35 a day might only be 50% of what you’re actually paying. The fees are just as much as the car rental. And for years, it wasn’t priced like that. All you saw was $35. And then when you go to pick up the car or you finish a rental, you see all the rest. We got to upfront pricing in car rentals, I don’t know, it must be 10 years ago. But for some reason, air and hotel were not subject to the same rules. So these are really good improvements for travelers, makes it fair, and makes it more competitive. Competition now will help drive some of these costs down. That’s what we’ve seen decade after decade. If you level the playing field and everyone has to disclose the same things, competition will now come into play, and we might see some better pricing for consumers.

Mike Putman:
Yeah, exactly. So Southwest Airline, great example. You don’t have to pay for two bags. You don’t have to pay for seat assignments. And with other carriers, you do. Southwest might be $30 more on the upfront ticket price as it stands today, but it would be a lot better value because you’re not paying for your bags and you’re not paying for a seat assignment. on it. Also, I would like to add that… If your flight is canceled with these new rules, you are going to be, the airlines will be required to refund any additional fees you paid for things like seat assignments or prepaid Wi-Fi or bags. So you would think that’s just like obvious, right, that the airline should do. Evidently, they don’t. So they’re going to be required to today. Well, as soon as this goes into effect. So let me let me throw out a disclaimer. They’re saying that the rules from the DOT will be implemented over the next six to 12 months. So these are not going to be immediate. But hopefully, hopefully the airlines will adopt these prior to the DOT mandate. And hopefully we’ll see some change by the time the mandate does roll around.

James Ferrara:
I do want to say, Mike, and we’ve said this many times here before, keep in mind that things that are outside the airline’s control are not covered by this.

Mike Putman:
No, it is.

James Ferrara:
It is? Even a weather delay?

Mike Putman:
A weather, they have to refund you, yes.

James Ferrara:
Wow, guys, I was not aware of that. So thank you, Mike, for that. That’s a big deal. Because in the past, airlines were able to point to weather as the cause for the delay and then say, you know, essentially, it’s an act of God. They’re not responsible. If this is covering that, then it really is a huge change. Another part of this has to do with baggage, which, as we said, is one of those extra fees you can pay. And if they lose your baggage or delay your baggage, they have to pay you the fee back. Not really. I mean, that’s great. Not really a big deal, because the big deal is they may have lost your bag. And you do have some coverage on your bag if they lose it. but they will only give you up to a certain amount for the contents of your bag. And if you’re a, A business traveler like Mike or like me, well, actually, I won’t say Mike because he doesn’t check a bag, but like me, I’m checking a bag. It has three suits, four pairs of shoes, alligator belt, all kinds of stuff. I mean, literally, there’s thousands of dollars worth of clothing in my bag. And the limitation from the airlines, I think, is generally $500 for a bag.

Mike Putman:
It may be a little bit more, but it’s certainly less than $1,000. And, you know, like if you have a nice toonie bag, your bag costs more than $1,000.

James Ferrara:
So you can get supplemental insurance for your baggage. And we always recommend that you buy travel insurance, that you buy one of these great annual plans, which is what I use because I travel so much. So I don’t buy insurance for every trip. I buy an annual plan from my travel advisor who mine happens to be with Allianz and it covers me for the whole year. But there’s supplemental baggage coverage. So if I get $500 or $600 from the airline, I’m getting another $500 or $600 from Allianz or $1,000, whatever it is. So at least I have a chance of recouping some of my real loss.

Mike Putman:
Yeah, and if you have a premium credit card, a lot of those will have that supplemental baggage coverage as well, too. So check that before you buy additional insurance. So, James, do you want to talk about our giveaway and what we’re doing for this giveaway?

James Ferrara:
Sure. So we’ve been talking about it for just a couple of weeks now into our third season of No Tourists Allowed. The last giveaway we did was at the end of last year, 2023, we gave away a luxury Virgin Voyages cruise for two, a seven-day cruise for two on the premium cruise brand Virgin Voyages. And that was really exciting. So this time we thought we’d go land side, and we have a four-day, three-night, all-inclusive resort vacation.

James Ferrara:
And we have not given you any more details until today. And we’re going to start with a little bit of fun with you. Um we want you to guess where that destination is where we’re going where you’re going on this four-day three-night all-inclusive vacation for two people and we’re going to have some instructions uh a little bit later on what to do to get your name put in the hat to get your entries in for the drawing. The drawing will be made later in the season towards the beginning of the summer. And there are different things you can do every week to get multiple entries into the drawing. So in terms of destination, though, we don’t want to flat out tell you where it is. First of all, we’re telling you it’s an all-inclusive resort. So that’s your first firsthand, because this may come as a surprise to you, but there are no all-inclusive resorts in the United States.

Mike Putman:
I don’t think that’s correct.

James Ferrara:
Well, that’s the way we look at it. There are resorts that have meal plans. There are resorts that have something, but not all-inclusives like in the sense that we mean it.

Mike Putman:
There’s a club in Florida.

James Ferrara:
No, it’s gone. they they sold that a while ago a couple of years ago yeah that was the only one in the united states there’s.

Mike Putman:
A ryu in miami beach too.

James Ferrara:
Okay that may qualify now i like ryu very much but let’s get say um, Hint number one is it’s all-inclusive. Hint number two is it’s not in the United States.

Mike Putman:
Yeah, you just told everybody. That’s a given. You can’t count what is. You already told them that.

James Ferrara:
So that’s hint number two. And, you know, I don’t know, Mike. Are we going to give any more hints? We know it’s someplace exotic, someplace outside the borders.

Mike Putman:
Hint number three is, this was a second home to the writer of the James Bond series.

James Ferrara:
I was going to sing the theme song from James Bond, but I’ll spare you that. I think your clue is better. Okay, that’s all we’re giving you right now. Stay tuned a little bit later for some instructions on how to get your drawings in. And, you know, next week, we’ll give you a little more. Next week, maybe we’ll talk about which property it’s at, or which resort brand that we’re talking about. And then later from that, what’s actually included beyond the basics, some special inclusions. So a lot to get excited about. And you could win it, guys. This is not like the lottery, not like the Powerball. Your chances are not one in a million moons. Your chances are much better here just with our intimate audience at No Tourists Allowed. So please enter to win.

Mike Putman:
Take advantage. Yeah, take advantage.

James Ferrara:
Mike, there’s been some other interesting news. Particularly, it’s always interesting to hear what customer feedback is about particular airlines, because we all make that choice. Many of us make that choice constantly, almost every week. We’ve got to choose what airline to fly on. But even if you’re only taking a vacation once a year, shame on you, but even if that’s all you’re doing, you want to make sure that you get what you’re paying for. You want to get good service. You want to get reliable service. And so it’s good to know what the feedback is about airlines. And there was a recent survey.

Mike Putman:
The American Customer Satisfaction Index has just been released just this week. And this survey rates different components or different verticals in the travel industry. And what we’re going to focus on today is talk about airlines. So the good news is that, you know, the travel industry is back, you know, we’re kind of, I think fully over COVID, business travel has come back to the pre-pandemic levels. And it sounds like the airlines have really raised their gains. So in this survey, which is done every year, has been done for quite some time, most of the airlines have actually increased. And the rating is basically done on customer satisfaction. Satisfaction right so how satisfied it’s like a nps score how satisfied were you with flight that you just took right so um of the um of the 10 airlines and these this is focused on u.s carriers too by the way guys of the 10 airlines i think all but two have gone up um and and there’s some surprising results here james i gotta tell you i’m i’m i’m surprised i.

James Ferrara:
Was not surprised when When we were talking about it, I guessed who the number one airline is because they’ve been in that position. They’ve had that feedback for a while now and because that airline has grown quite a bit. But should we back into it, maybe start a little further down the list and talk about the top three or something?

Mike Putman:
Let’s start at the bottom. I think it’s at the bottom.

James Ferrara:
At the bottom.

Mike Putman:
And I don’t think anybody would have a problem guessing who is at the bottom of the 10 largest airlines in America. In terms of customer satisfaction, it would be Spirit Airlines. There’s lots of memes and things on social media about, you know, what you get when you fly Spirit. But service, I flew them one time, and there certainly was not known for its service when I flew.

James Ferrara:
I know many people who fly Spirit because the price difference is sometimes, you know, pretty extreme. Although here’s a really great example where you have to watch that drip pricing, right? And to be able to have a bag, to be able to even select a seat requires an additional fee. And so when you add it all up, I’ve seen examples where that Spirit fare actually is as much as or more than a more legacy type airline, a bigger brand. But people do love it, and I’ve seen a lot of people use it, but certainly nobody I know talks about how great the service is or how reliable it is. Very commonly, people say that flights are canceled when they’re not well-booked or when equipment is not in the right place and they need to move planes around, so that’s common.

Mike Putman:
Also at the bottom is Frontier. And I have flown Frontier several times. I used to fly to Greenville and had some really nice nonstop service. And I got to tell you, I had I had good service on Frontier, but it’s it’s number nine out of 10. But then as we look at kind of the not necessarily low-cost carriers, the lowest rated, what I would call legacy carrier, is James’ favorite carrier, United.

James Ferrara:
United.

Mike Putman:
So they’re number seven. JetBlue, six. Delta is five. Now, I was really surprised. This is the one that was really surprising to me. I mean, Delta and other customer satisfaction scores tends to do better.

James Ferrara:
Well, for years, Delta was the top rated service airline. I mean, that for decades, it feels like. Yeah.

Mike Putman:
But the frequency between number five and number two, by the way, is two points out of us out of 100 scale. So it’s pretty, pretty small. But it’s Delta five, Southwest four. And the other surprise, the other two surprising things for me was Allegiant, which is known for low cost is number three. Um that’s really interesting i mean their seats don’t recline they sell you everything under the sun when you’re on the plane um and oftentimes when i go to florida there’s a lot of non-stops on the legion out of this part of the uh part of the country so i take a legion um but um, I don’t think I would call it top three or better than Delta or Southwest. It is. And then number two is American, which I tend to fly. And I may be ending that. I’m their top tier frequent flyer, but they’ve made some really radical changes in how they distribute their product and who gets frequent flyer points and who doesn’t. And I think this will be my last year as an American Airlines flyer. I qualified for Executive Platinum, and I’ll probably ride it out this year because of the benefits and perks I get, but I don’t think I will be loyal after I’ve been an Executive Platinum probably for 14 years, and I think I’m done with American after this year.

James Ferrara:
And then that brings us to the number one position.

Mike Putman:
Which is Alaska.

James Ferrara:
Alaska’s been a growing airline now, one of the largest. uh they uh purchase uh northwest was it no.

Mike Putman:
Delta purchased northwest um but they just they just recently got approved to purchase hawaiian.

James Ferrara:
Yeah before that there was another big merger too that helped them grow they have been in the news uh recently with the um missing panel in the side of the plane, but that’s not really representative of the experience on Alaska. And I’ve been hearing for a couple of years now this kind of very positive feedback about Alaska.

Mike Putman:
Yeah, I’ve had the chance to fly Alaska a time or two, and it was very good service.

James Ferrara:
I did too. I’m a United guy, but look, that’s because of where I live. It’s a big hub for United. I have, you know, top tier status with them and so on. I think these are all, you know, you’re choosing between a rock and a hard place, right? None of these experiences are terrific. Air travel is the portion of travel that we all tolerate rather than celebrate. You know, I would much rather arrive at a hotel or a resort or a cruise ship than I would step on an airplane. And that’s a shame because it hasn’t always been like that. And in fact, the early history of commercial airline flights is something very different. It was a great experience and a high-end experience. So the industry has changed a lot, lost its way a lot of the time, in my opinion. And hopefully, renewed competition will bring back some level of customer service. You know, Pete Buttigieg and the…

James Ferrara:
Department of Transportation put up a website where airline customer service policies are listed, one right next to the other in a big chart. So you as a consumer, as a traveler, you can check that chart and it’s on the Department of Transportation’s website. Site, you can check that chart and compare airlines and what they offer for the money that you’re giving them and maybe hold them accountable a little bit. And that increased competition will increase the quality of service and will keep the fares lower.

Mike Putman:
I 100% agree with you, James. Couldn’t agree with you more. You know, we have gotten kind of these hubs have become so dominant in certain markets. And we’ve spoken about this before, but, you know, Charlotte used to be out of that market. Ninety two percent was controlled by Americans. So you really don’t you don’t really have a choice in some of these in some of these markets. And it’s just unfortunate how these the consolidation of of many carriers just to a few carriers has happened. And, you know, I think the government has kind of failed us in that regard, because if you did have choice out of Charlotte or out of Newark or Atlanta, prices would drop and be low. I also ran into some really interesting research that just got published today, as a matter of fact. And the research came from Focusrite Research, which, you know, James, Focusrite is the number one research company in the travel space. If you’re looking for data, as we often do, we go to Focusrite looking for the answers and have for many years. But they came out with a new report that is measuring total revenues for travel in the U.S. And they’re.

Mike Putman:
Surprisingly, and a lot of people may not realize this, but all travel for 2023 in the United States was $475 billion. So almost half a trillion dollars in bookings were made in the U.S. last year. That’s an amazingly large number.

Mike Putman:
And a couple of other interesting things came out of this report. And it was one thing was actually Expedia, which was the nation’s largest, you know, our largest OTA actually slowed down their growth because they they say they spent a lot of last year trying to consolidate all its brands. As you know, they own Hotels.com, they own Travelocity, several other brands, and they’re trying to consolidate those. And you really have two major online travel agency providers, the group that’s made up of Expedia and the group that’s made up of Booking.com. They represent a very large market share of online travel bookings. Um, the, the other thing that came out of this report was that for the first time ever, uh, the OTAs collectively passed $1 billion in revenue. So 21% of all the revenue, all the travel revenue booked in 2023 was done through an OTA, which is, uh, which is interesting. Interesting. The supplier direct made up about 45 percent and the rest, which is still a larger chunk than the OTAs, is what is referred to as offline bookings. And so that would be bookings that are made through traditional travel agents.

Mike Putman:
Some of the things that the factors that got these numbers up so high are the ADRs or average daily rates for hotels have really grown. own. And airfares were really high last year. If you think about 2023 as a year, we saw the demand come back and we saw later in the year, the business travel demand come back. And when that comes back, that premium bookers will drive up the revenue for the airlines as well.

James Ferrara:
$100 billion in OTA revenue. Look, they include our companies, Mike and my companies, in that OTA umbrella. But I do make a distinction between going to a website and booking your travel versus working with a travel advisor or being part of a private.

James Ferrara:
Travel club. Those are different experiences. And, you know, private travel club is going to have a lot of product that’s specifically tailored to you. It’s going to have benefits that the general public don’t get. So there’s a lot of value if you use that road into the travel industry. And then working with a travel advisor, same thing. You’re going to have someone who gets to know you, listens to and understands your needs. Not everybody wants the same experience or the same thing out of their travel and out of their travel dollar. And a good travel advisor understands that and then is working not only to do all the work for you, because there are a million things you can look at and a million prices, and you just can’t do it on your own. You can’t get to all of the information you’d need to get to make the same kind of informed decision that a travel advisor can have.

James Ferrara:
But in addition to that, the travel advisor is looking out for you and knows where the pitfalls are, knows about travel insurance, knows who the good, reliable suppliers and hotel partners are. So, you know, going to a website just to a URL to book anything in travel makes no sense to me. You know, either become part of a really quality travel organization, travel club, or seek out a professional travel advisor. Those are the two ways we’d like to see you, you know, chase your travel dreams.

Mike Putman:
And have an advocate on your side. Well, great. Well, James, I think that wraps up this episode of the podcast. Podcast uh i want to thank all our listeners out there for following us and subscribing please tell your friends and they can go to notouristallowed.com to register for our giveaway listen to our podcast get links to uh to previous podcasts or of course you can subscribe on spotify apple podcast and and pretty much anywhere you you get your podcasts this.

James Ferrara:
Was a chit chatty episode of ours. We like to do that sometimes with you. But we do have some big guests coming up. We have a very well-known travel journalist, writes for the New York Times and a number of other places, who’s coming out with a new book. And so we’re going to be talking about that. Her book is about to be published. And we have a wellness travel guru who’s going to be talking to us about spas and wellness retreats and the importance of wellness and self-care and how travel can help you achieve that. So those are just two really great guests coming up in the next couple of weeks. Thank you so much for being with us.

Mike Putman:
Yes, thanks so much. Goodbye, everyone.

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