Airline Shakeup: New DOT Rules & Surprising Rankings

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

Introduction and Mystery Destination Giveaway

Hey, travel enthusiasts. Welcome back to another exciting episode of No Tourists Allowed. I'm Mike Putman. And I'm James Ferrara.

Before we dive into today's topics, we have some thrilling news to share with you all. We're hosting an incredible 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.

Now here's how you can increase your chances of winning. If you haven't already, head over to notouristsallowed.com, find the button that says giveaway, and join our newsletter. By doing so, you'll automatically receive five raffle entries.

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.

You have nothing to lose and everything to gain. Sign up for our newsletter, take a shot at guessing the destination, and you could be jetting off on the trip of a lifetime. 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. 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.

The Mission of No Tourists Allowed

Mike Putman: Hello, everyone. I'm Mike Putman.

James Ferrara: And I'm James Ferrara. Welcome to No Tourists Allowed. As opposed to some other—in an alternate universe, is there a podcast called Tourists Allowed?

Mike Putman: There might be. Possibly, yeah. I had to kick myself yesterday; I was writing something up and I put "no tourist" without the "s" allowed, which it's notouristsallowed.com too, for those of you who like to go visit our website.

James Ferrara: Yeah, and what we're about is helping you travel better. Mike and I both have a combined, I don't know, it's getting close to a hundred years now in the travel industry, seriously.

We have been deep in the travel industry at a very executive level, deep into technology, and deep into relationships with all the major brands that you know. So we really do try to have 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.

We want to help you travel in a way that is truly memorable and not just touristic. That's what we're about.

Mike Putman: 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: But we did have an interesting episode not too long ago where we talked about whether or not there is "too authentic." There are things that could be very authentic, but not necessarily very pleasant for travelers. It's an interesting fine point and 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, and I should say up front, is we do some giveaways. A little bit later we'll talk about what that giveaway is this time around. 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.

What we also do here is we keep an eye on the headlines 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. Mike, you've had your reading glasses on lately and you've caught a couple of interesting things.

New U.S. DOT Regulations on Airline Refunds and Pricing

Mike Putman: Yeah, being in the space, times are a-changing. One thing I want to share out is the U.S. Department of Transportation ruled just within the last week that they passed some very significant rulings that are going to change how consumers are compensated when airlines make a boo-boo or something happens.

As many of you I'm sure have experienced in the past where you've flown and your flight got canceled or it got significantly delayed—the way the industry has changed, twenty years ago, if your flight was delayed overnight, they would hand out a certificate, a hotel, or a food voucher. They'd kind of take care of you.

Today that happens sometimes but not all the time. Also when the airlines cancel flights, they often will try to give you a voucher back rather than give your money back.

The U.S. Department of Transportation has just came in with some pretty significant changes that are going to require the airlines to refund your form of payment automatically if they cancel a flight for any reason. Even if it's a weather delay, they are required to refund you back in cash or refund your credit card most likely, if you show desire.

And that will be the default setting. Also, if your flight is significantly delayed—which I think they have the word "significantly" meaning three hours on a domestic flight and six hours on an international flight if I remember correctly—then again, it could be mechanical, or 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. You can choose to be rebooked as well. You still have that option, but at least for people—because look if you're going to a wedding as an example, and the wedding's on Saturday and you're flying out on Friday night and the last flight of the day is cancelled, you don't want a voucher. It's going to be too late to get to the wedding. You just want your money back, which seems really fair.

The voucher processes and the refund processes were a little difficult, and this just clarifies things for everyone. Also, part of this new ruling and this new legislation is around upfront, transparent pricing.

There was just too much going on where you bought the ticket for $500 only to find out that there's another two hundred dollars worth of fees and things you have to pay for like luggage and so on. So it's not really five hundred dollars, it's really seven hundred dollars.

This "drip pricing" where they keep adding just a little bit more is not just airlines. 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, particularly when you checked in at the hotel, you were hit with another $30 or $40 or $50 in resort fees per day to stay at that hotel.

It wasn't properly clearly described upfront. So we have some legislation that has passed in California, and 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 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 thirty-five dollars a day, but then the airport fee, tourist fee, local tax, and everything else applied to that could be double that amount. In other words, thirty-five dollars a day might only be 50% of what you're actually paying.

The fees are just as much as the car rental. For years, it wasn't priced like that. All you saw was the thirty-five dollars, and then when you go to pick up the car or you finish your rental, you see all the rest.

We got to upfront pricing in car rentals, I don't know, must be ten years ago. But for some reason air and hotel were not subject to the same rules. These are really good improvements for travelers. It 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.

James Ferrara: Yeah, exactly. Southwest Airlines is a great example. You don't have to pay for two bags. You don't have to pay for seat assignments. With other carriers you do. Southwest might be thirty dollars 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.

Mike Putman: Also I would like to add that if your flight is canceled, with these new rules the airlines will be required to refund any additional fees you paid for things like seat assignments or prepaid Wi-Fi or bags. You would think that's just obvious that the airline should do that. Evidently they don't, so they're going to be required to today—well, as soon as this goes into effect.

Let me throw out a disclaimer. They're saying that the rules from the DOT will be implemented over the next six to twelve months. So these are not going to be immediate, but hopefully the airlines will adopt these prior to the DOT.

Handling Baggage Issues and Travel Insurance

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

Mike Putman: No, it is.

James Ferrara: It is? Even a weather delay?

Mike Putman: A weather delay, 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, essentially, it's an act of God and 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. If they lose your baggage or delay your baggage, they have to pay you the fee back. That's great, but not really a big deal because the big deal is they may have lost your bag.

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. If you're 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 belts, all kinds of stuff.

Literally there's thousands of dollars worth of clothing in my bag and the limitation from the airlines I think is generally five hundred dollars for a bag. It may be a little bit more, but it's certainly less than a thousand. If you have a nice Tumi bag, your bag costs more than a thousand dollars.

So you can get supplemental insurance for your baggage. 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. I don't buy insurance for every trip. I buy an annual plan from my travel advisor—mine happens to be with Allianz—and it covers me for the whole year.

There's supplemental baggage coverage. So if I get five hundred or six hundred from the airline, I'm getting another five or six hundred from Allianz or a thousand, whatever it is. So at least I have a chance of recouping some of my real loss there.

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, you want to talk about our giveaway and what we're doing for this giveaway?

Clues for the All-Inclusive Resort 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. 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. We have not given you any more details until today. We're going to start with a little bit of fun with you.

We want you to guess where that destination is, where you're going on this four-day, three-night, all-inclusive vacation for two people. We're going to have some instructions 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.

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 hint, 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 in the sense that we mean it.

Mike Putman: There's a Club Med in Florida.

James Ferrara: No, it's gone. They sold that a couple of years ago. That was the only one in the United States.

Mike Putman: There's a Riu in Miami Beach too.

James Ferrara: Okay. That may qualify now. I like Riu very much. But let's say 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 one as you've already told them that. So that's hint number two. I don't know, Mike. Are we going to give any more hints?

James Ferrara: We know it's someplace exotic, someplace outside the borders. Hint number three is this was a second home to the writer. I was going to sing the theme song from James Bond, but I'll spare you that. I think your clue is better.

Mike Putman: 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. 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.

Then later from that, we will talk about what's actually included beyond the basics—some special inclusions. So there is a lot to get excited about and you could win it, guys. This is not like the lottery or the Powerball. Your chances are not one in a million. Your chances are much better here just with our intimate audience at No Tourists Allowed. So please enter to win.

Airline Customer Satisfaction Rankings

James Ferrara: Take advantage. 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 constantly, almost every week. We've got to choose what airline to fly on.

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 and reliable service.

There was a recent survey. The American Customer Satisfaction Index has just been released just this week. This survey rates different components or different verticals in the travel industry. What we're going to focus on today is talk about airlines.

The good news is that the travel industry is back. We're kind of fully over COVID. Business travel has come back to the pre-pandemic levels, and it sounds like the airlines have really raised their gains.

In this survey, which is done every year and has been done for quite some time, most of the airlines have actually increased. The rating is basically done on customer satisfaction, like an NPS score. How satisfied were you with the flight that you just took?

Of the ten airlines—and this is focused on US carriers, by the way—of the ten airlines, I think all but two have gone up. There are some surprising results here, James, I gotta tell ya. I'm surprised.

James Ferrara: I was not surprised when we were talking about it. I guessed who the number one airline is because they've been in that position and they've had that feedback for a while now. 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 don't think anybody would have a problem guessing who is at the bottom of the ten largest airlines in America in terms of customer satisfaction. It would be Spirit Airlines.

There are lots of memes and things on social media about what you get when you fly Spirit. I flew them one time and they certainly were not known for their service. I know many people who fly Spirit because the price difference is sometimes pretty extreme.

Although, here's a really great example where you have to watch that drip pricing. To be able to have a bag or to even select a seat requires an additional fee. 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. 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 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. Also at the bottom is Frontier. I have flown Frontier several times. They used to fly to Greenville and had some really nice nonstop service.

I had good service on Frontier, but it's number nine out of ten. As we look at kind of the non-low-cost carriers, the lowest rated what I would call legacy carrier is James's favorite carrier, United.

James Ferrara: United. So they're number seven.

Mike Putman: JetBlue is six. Delta is five. Now I was really surprised—this is the one that was really surprising to me. Delta, in other customer satisfaction scores, tends to do better.

James Ferrara: Well for years Delta was the top rated service airline. It feels like that has been the case for decades.

Mike Putman: The difference between number five and number two, by the way, is two points on a hundred-point scale, so it's pretty small. But it's Delta five, Southwest four. The other two surprising things for me was Allegiant, which is known for low cost, as number three.

That's really interesting. Their seats don't recline and they sell you everything under the sun when you're on the plane. Oftentimes when I go to Florida, there's a lot of nonstops on Allegiant out of this part of the country. So I take Allegiant, but I don't think I would call it top three or better than Delta or Southwest.

And then number two is American, which I tend to fly. I may be ending that. I'm a 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.

I think this will be my last year as an American Airlines flyer. I've 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 fourteen years. I think I'm done with American after this year.

And then that brings us to the number one position.

James Ferrara: Which is Alaska. Alaska's been a growing airline now, one of the largest. They just recently got approved to purchase Hawaiian.

Mike Putman: Before that there was another big merger too that helped them grow. They have been in the news recently with the missing panel in the side of the plane, but that's not really representative of the experience on Alaska. I've been hearing for a couple of years now this very positive feedback about Alaska.

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 top tier status with them and so on. I think these are all—you're choosing between a rock and a hard place. None of these experiences are terrific.

Air travel is the portion of travel that we all tolerate rather than celebrate. I would much rather arrive at a hotel or a resort or a cruise ship than I would step on an airplane. That's a shame because it hasn't always been like that. In fact, the early history of commercial airline flights is something very different. It was a great experience and a high-end experience.

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. Pete Buttigieg and the U.S. 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 and a traveler can check that chart. It's on the Department of Transportation's website. 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.

Travel Market Research and the Value of Travel Advisors

Mike Putman: Airlines have become so dominant in certain markets and we've spoken about this before, but Charlotte used to be out of that market ninety-two percent was controlled by American. You really don't have a choice in some of these markets.

It's just unfortunate how the consolidation of many carriers just to a few carriers has happened and I think the government has kind of failed us in that regard. Because if you did have choice out of Charlotte or out of New York or Atlanta, prices would certainly drop.

I also ran into some really interesting research that just got published today, as a matter of fact. The research came from Phocuswright, which, James, Phocuswright is the number one research company in the travel space. If you're looking for data, we go to Phocuswright looking for the answers and have for many years.

They come out with a new report that is measuring total revenues for travel in the US. Surprisingly—and a lot of people may not realize this—but all travel for 2023 in the United States was four hundred and seventy-five billion dollars. So almost half a trillion dollars in bookings were made in the US last year. That's an amazingly large number.

A couple of other interesting things came out of this report. One thing was actually Expedia, which was the nation's largest OTA, actually slowed down their growth because they spent a lot of last year trying to consolidate all its brands. As you know, they own Hotels.com, they own Travelocity, and several other brands.

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. The other thing that came out of this report was that for the first time ever, the OTAs collectively passed one hundred billion dollars in revenue.

Twenty-one percent of all the travel revenue booked in 2023 was done through an OTA, which is interesting. The supplier direct made up about forty-five percent and the rest, which is still a larger chunk than the OTAs, is all what is referred to as offline bookings. That would be bookings that are made through traditional travel agents.

Some of the factors that got these numbers up so high are the ADRs or average daily rates for hotels have really grown 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. When that comes back, those premium bookers will drive up the revenue for the airlines as well.

James Ferrara: 100 billion in OTA revenue. Look, they include our 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 travel club.

Those are different experiences. A private travel club is going to have a lot of product that's specifically tailored to you and is 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.

Working with a travel advisor is the 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. 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 make the same kind of informed decision that a travel advisor can help you make. But in addition to that, the travel advisor is looking out for you and knows where the pitfalls are, knows about travel insurance, and knows who the good reliable suppliers and hotel partners are. Going to a website just to a URL to book anything in travel makes no sense to me. 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 chase your travel dreams and have an advocate on your side.

Closing Remarks and Future Guests

Mike Putman: Well great. Well James, I think that wraps up this episode of the podcast. I want to thank all our listeners out there for following us and subscribing. Please tell your friends and they can go to notouristsallowed.com to register for our giveaway, listen to our podcast, and get links to previous podcasts. Of course you can subscribe on Spotify, Apple Podcasts, and pretty much anywhere you get your podcasts.

James Ferrara: This was a tit-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 who writes for the New York Times and a number of other places, who's coming out with a new book. We're going to be talking about that; her book is about to be published. We also have a wellness travel guru who's going to be talking to us about spas and wellness retreats and the importance of self-care and how travel can help you achieve that. 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.