Frommers.com Podcast: Customer Service and the Future of Travel

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David: Welcome to the frommers.com travel podcast. For more information on planning your trip to any one of 1000's of destinations please visit www.frommers.com.

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David Lytle: Hi, this is David Lytle. Welcome to the frommers.com podcast. Today we're talking with Christopher Elliott. He's the ombudsman for "National Geographic Traveler" magazine, and the host of What You Get for The Money Vacations on the Fine Living network. You can read his collected columns and see videos at elliott.org. Hi Chris, how's it going today?

Christopher Elliott: Hey good, how are you doing?

David: Doing well. Today we're going to be talking about, basically airlines and airports and what we think might be happening for the future of travel, especially in the United States. You've written some columns recently that I think are just good touchstones to get this started off. The very first one is called - the title is Flying Traitors: three Reasons Why Air Travel is Un-American. It's a very provocative headline there.

Chris: Well, I thought it was a good topic because it was written right around the elections and everyone was thinking about what our duty is as Americans, and I thought to myself, "Well, what about the airlines?" I think that the airlines have, really dropped the ball in many ways and have created an industry that is; if you just look at it from a bird's-eye view, no pun intended. It looks very, very un-American. You have the haves and the have-nots, it's a very class-based society up at 36, 000 feet. You have people who are treated extremely well, in the business and first class section; they're given gourmet meals, lay-flat seats, very personalized attention.

And then in the back of the plane you have conditions that are progressively getting worse. You have to pay for drinks now. The seat pitch is getting narrower and narrower.

David: Right.

Chris: That's the just the screen seats. You have conditions where people are not being fed for five or six hours at a time. And it's that gap that's widening. We've always been in this country, a kind of an egalitarian society - where everyone gets a fair shake. I think that, up at 36, 000 feet, which is not the case. It's a class-based society and I just wanted to write something about that and bring some attention to what was going on.

David: Sure. What about the argument though that, the people that are in business class and first class, they're paying for these things that they're getting. They're paying a higher fair for that seat or to receive that gourmet meal.

Chris: Well, my position is not that we should eliminate that, but let's take that for a second, because I get a lot of indignant emails and phone calls from people who say, "Hey, I paid for that!" Well, usually it's, actually their employers that are paying for it. Or they're frequent fliers, and again their employer pays for their trip, and they're getting miles and using miles to upgrade. So very few people, who actually pay full fare to be in business or first class. It's some, but not that many.

David: OK.

Chris: Oh, my point in the story though, apart from calling attention to the growing division between the haves and the have-nots, is to say simply that it's OK to offer more for people who want to pay more, but it's not OK to take away what little the people in the back do have. And I think that's really what's been happening. It used to be that you could get a seat - you could get a reservation, and it wouldn't cost anything extra. You could check a bag and it wouldn't cost anything extra. You could get a drink and a meal. Maybe it wasn't a great meal, but it was something to eat. Now, you have to pay for all that, or it doesn't exist - you can't get it at all.

For example, the exit row seats and the aisle seats are very coveted now, and now they're being given to the frequent fliers or you have to pay extra for those.

David: Right, I know on Jet Blue for example, if you - which is surprising to me when they started it, because I always thought of them as the airline that made an effort to do it right - it's now $30 for exit row or aisle seats?

Chris: Now it's not just - exactly - it's not just that, but now if you want a pillow and a blanket you have to pay for it. And now they've also segmented - they have the upper part of the cabin, which is a de facto business class section where you have more legroom, and you pay more for it, and you have the back of the plane, where you have less legroom and maybe pay less for your ticket. It's just, I think that the airlines have just gone about doing it the wrong way. If you want people to pay more, offer them more. Don't take away what they have, and then ask them to pay more for what you've taken away.

David: Right, exactly. I mean that's almost a guaranteed fail to previously offer something as just daily occurrence and then suddenly say, "We're no longer doing that, but if you really liked it, we'll let you buy it from us."

Chris: Well, and the funny thing is, if you looked back to earlier this summer or, late this spring, when American Airlines decided that it was going to start charging for the first checked bags. If American airlines has said, "We're lowering our fares, and in exchange you now have the choice of paying for that first checked bag", that would have been one thing. But if you look at the trim line of fares, you'll notice that American and all of its competitors were busy trying to raise fares at the same time. So they, really were just making what amounts to a money grab.

David: Well, I think conventional wisdom about the charging for the checked bags - and maybe I'm wrong here - at least the argument that the airlines were making, was that because of the rising cost of fuel, that they had to offset that cost somehow, so they were hoping to force people to pack lighter to carry-on as opposed to checking bags.

Check: Well, you can look at some of the public statements that the airlines have made, this is clearly a way for them to generate more money. Whether it's to offset fuel costs or not is kind of an open question. I think at the time they said it and fuel prices were high, but you have to look at two things - first of all, fuel has actually gone down and those fuel charges have remained in place.

Second of all, if you go back to two years ago and look at what airlines, notably United Airlines, were saying, they wanted to unbundle their fares back then. "Unbundle" is, basically an industry term for taking everything except the base fare off of the fare and turning it into a surcharge, which basically makes the fare seem artificially low.

David: Right, charging per amenity if you want to consider a Coke an amenity.

Chris: Exactly, exactly. And so the airlines really wanted to do this a long time ago, and they were waiting for a good excuse. And that excuse happened to be high fuel costs. Now that fuel costs have come way, way back down - I mean, as we're talking fuel is at, I think, a five year low? Something close to that?

David: Yeah.

Chris: All those surcharges are still in place, and the airlines - if you look at what US Airways said - there was an internal memo that went to employees last week - they have no intention of getting rid of these - they call them ancillary revenue opportunities.

David: Right. Exactly. Well, I think that touches on even the idea of charging for exit row seats and aisle seats. They see where people go first when they're booking, and they decided, "Well, if that's popular, why can't we make some money off of what's popular?"

Chris: Well... I understand the sentiment but -

David: I'm not defending their practice. I think what they're doing is very predatory.

Chris: Well, yeah. I think that from a customer's perspective and that's really where I am coming from, there are a lot of airline apologists out there, and they do a very good job. There's even an organization, the Air Transport Association that does nothing but stand up for the airlines' right to do whatever they want to. From my perspective as a consumer advocate, I think that that's the wrong way of going about doing it. An exit row seat is in economy class. If you're going to sell an economy class ticket, you, certainly can segment the cabin further if you want to, but that's not a segmented cabin. So, all those seats should be priced in a similar way.

Now, the reality of that is that you have this whole - and this is really a can of worms with how the airlines price their tickets. I don't think that you should be able to say, "Hey, here spend an extra $15. Now that we've got you in economy class, you can get an even better ticket for $15".

I just don't think that that's the right way of doing it. It's not customer friendly.

David: Right. I agree with you. That actually jumps off to another column that you wrote, recently called "Broken Promises: How Airlines Have Betrayed Us". And you started out with the example of a passenger named Jim Allen who was trying to buy a ticket from Manchester, New Hampshire, to Little Rock, Arkansas. He filled in all his information. The ticket was listed at $251. When he clicked to buy, suddenly the price jumped to $314. He was sort of amazed by this. He went to try it again, and the ticket went up to $387. It finally went up to $422 where it stopped. This was just within a matter of minutes.

How do airlines defend this sort of pricing model where it's not even consistent? You don't know what the person next to you paid for their seat.

Christopher: Well, they can't really make an articulate defense. The best they can do is to say it's a very dynamic pricing system, but think about it in terms that you or I encounter every day when we go into a grocery store. A loaf of bread is priced at $1.69, and by the time you get to the checkout counter one of the associates has run over with one of those little stampers that they have and repriced the bread. Now, it costs $3.49.

Well, that's basically what's going on, and it's going on every day. Usually, or I should say almost always, it's priced to the upside. So, you find a fare that you like. You say that you want it. You hit the 'book' button and suddenly either they've run out of fares or the price has changed.

David: What sort of recourse do consumers have when that happens?

Christopher: Well, absolutely none. It's like hitting your head against a brick wall. You can call the travel agencies, online travel agencies, off line travel agencies. You can call the airline or even the hotel and say, "Hey, you showed me this. Here's a screen shot of it". But, until you hit the book button they're just playing games with you. The system is not right. It's not fair. It's not customer friendly, and this really needs to change. You cannot show someone a price and then change the price when that person says "I want to buy it". It just is not right.

David: Right. Right. As you said, it's like hitting your head against a brick wall. It feels like you've gone down the rabbit hole.

Christopher: I've got a lot of flak from colleagues who say, you know, Chris, you've done a tremendous disservice to the travel industry by calling these pricing systems "bait and switch", but that's really what they are. I mean, if you see a price and you say I want it and the price doubles, that's "bait and switch". That's really what's happening, very frequently with these dynamic pricing systems that the travel industry, in particular, the airline industry uses.

David: Right. Actually, "bait and switch" is a term that's come up quite often in your recent columns. I saw four instances of it which is calling this "bait and switch"; it is classic "bait and switch". If you see something, you should be getting exactly what you're paying for at the price that it was offered. There are no two ways about it. What is the solution to this?

Christopher: Well, you are going to call me a Socialist for saying this, but one solution is to get the government involved to say that you can't do this any more. This is wrong. I think that, probably at the end of the day it's the best solution that the government should say you can't do this.

David: So, you're calling for re-regulation.

Christopher: I'm calling for it, yes. I actually, just had a column today about that, and I heard from passengers who are overjoyed that someone has, finally said what everyone has been thinking and from economists who say that I have no idea what I'm talking about, and that the next time I write a story I should call them which is an incredibly self-serving thing to say.

David: Right.

Christopher: The fact is that only the government can stop something like this and say this is illegal; it shouldn't be going on.

David: Well, I'll be revealing my politics here, because at this point with what's happening in the economy we are seeing a pure example of what happens when you refuse to regulate an economy in any way.

Christopher: I totally agree with you.

David: It's tanking because there was this belief that, you know, a free market completely unfettered is the absolute best thing. Now, in any system there are always going to be those people who gain in the system, who say, oh well, the rules don't apply to me because I know how to work around them. They're making profit for themselves. There's nothing wrong with earning money. Nobody is saying that, but by completely stepping out of the game you also allow for the wolves to have their day.

I think the price that I saw mentioned in an article this morning was what they believe the actual cost for an economic bailout for this country is over seven trillion dollars.

Christopher: What makes me so upset is that that's not an abstract number. It's only abstract in the sense that it's so high most of us can't even come to grips with how much money seven trillion dollars is. That money is our money. We are the ones who are bailing the banks and potentially the car manufacturers out. It's just shameful, I think.

David: Right. Well, the automotive industry has already jumped into the game asking for... That's not a surprise. As soon as the government starts offering free cash basically, every business is going to start; every industry is going to start looking for a way to get some of that cash.

Christopher: It's only a matter of time before the airlines ask for some, too. You mentioned an interesting point about the car manufacturers. The car rental companies are so closely tied to the car manufacturers. And we've already seen some very troubling signs with the car rental companies where it is possible that in the next couple of weeks or months we will see either the failure of a car rental company. Or we've already seen this on a very small scale, car rental companies, actually running out of cars because they've been repossessed by their creditors.

David: Really?

Christopher: Yeah. Zanish in San Diego and a couple of other locations. I actually, blogged about that over the weekend. They ran out of cars. They were all repossessed.

David: Oh, I saw that headline but I didn't have a chance to read that article. These car rental outposts? Those are individually licensed though. They're franchises.

Christopher: These are franchisees. That's what I'm...

David: The franchisee is basically not paying off their auto loans.

Christopher: Yeah. There are ripple effects that are going to be felt across the entire travel industry here.

David: Wow, disheartening. Anything positive to look forward to in travel as we're watching the economy...

Christopher: Well, I think that the deal that you have now probably not going to get any better. I think that it - well, I take that back. I think you're seeing very, very good airfares right now, despite the fact that we're right in the middle of the holiday season here. But are just, actually getting started in the holiday season; but we've got wave season coming up for the cruise industry, and that's the traditional January, February, early March time period when all the cruises are stalled, and there's already been talk of some zero fares.

And by zero fares, I mean that the actual fare is zero, and that they charge you for port fees and make up the difference in...

David: ... fuel surcharges...

Christopher: ... and fuel surcharges.

David: Yeah...Arthur's been sort of hot and heavy blogging on that in the past two weeks, just these sort of incredible fares for cruises. One was, I think, was a week-long cruise out of Charleston down to Florida through the Caribbean and back, and as you said, it's not the most exciting itinerary, but it came out to, before extra charges, $24.00 a day.

Christopher: Yeah, isn't that great? Good for us.

David: Yeah.

Christopher: You know, I'm really optimistic. I mean, I started my career on Wall Street, and I actually wrote those stock market columns that you see on the wires and for the Wall Street Journal; this is back in the early 90s. And I saw more downside action than upside action in the market, and so this is...what I'm seeing now is not unfamiliar, but there... I'm comforted by the fact that the travel industry is cyclical, and by that I mean that the bad times are always followed by good times. So right now we're - in terms of the travel industry, things aren't going very well at all.

Probably record low airfares, the flights are not flying full. You have hotels that are at 50% occupancy and rates that are very, very good. Potentially zero fare cruises, and the thing is that this is all going to come back at some point. The pendulum will always swing back.

David: Right.

Christopher: And I think that it's typical for people; they look at 2009, and they look at their spring break and summer vacation, and they think, "Why should I even go? Things are looking so bad." But things are going to snap back; they always do.

David: Yeah, there was a post from a reader on our message boards over the weekend, in the cruise section, who was asking, how should she deal with this situation? She had mentioned to a colleague that she was planning on taking a cruise in the spring, and the colleague's response was, "How could you possibly even consider taking a vacation with the way the economy is?"

Christopher: And I got to tell you, it's the perfect time to go, because no one else is going to be out there. Everyone is thinking the same thing.

David: Well, and my comment to her was, I said, simply put, economies fail absolutely when consumers spend no money.

Christopher: Yeah.

David: If you're the sort of person, who has not run up a bunch of credit debt, and you have money in the bank and you can afford a vacation, there's no reason why you shouldn't take a vacation.

Christopher: The problem is that everyone moves together - everyone likes to move in lockstep. The flock goes on summer vacation; the flock goes back home during the fall and everyone heads back to school, and so when the flock decides to stay home, you get yourself into the problem that we're having right now. I think that come January one or January 2, right after the New Year's holiday, travel is going to fall off a cliff and a lot of people are going to lose their jobs in the travel sector, but it's all going - it has to come back. It might not come back for a while, but it will come back.

And I think, though, that if you're a smart traveler and you're looking at your next year and thinking, "What should I do? Should I stay home? Should I go somewhere?" there are some amazing bargain opportunities out there that you should, seriously consider taking advantage of.

Even though, as we've discussed, travel is not all that great, there's a lot to be desired, I think the pricing is so aggressive that you can't not consider a vacation in 2009.

David: Right. Well, I think it's being savvy enough to be a counterintuitive traveler, as opposed to following the herd. Well, this is the sort of thing that we recommend all the time, throughout everything that we publish from Frommer's, is go in a shoulder season, go off season, maybe even we're saying that air fares are low but people aren't buying. A positive side effect of that is that the airport's not going to be as crowded.

Christopher: Exactly.

David: That it does offer some advantages that you might not have considered before. That we're not getting the - I think expectations for Thanksgiving travel are lower this year than they were last year, just by a single digit percent.

Christopher: Yeah, that's true. Although, I never really believe them when they come out with their forecast, because as you probably know, there's no way to verify that fewer people travel by car...

David: Right.

Christopher: I think you probably verify somehow by looking at the DOT numbers, how many more people flew this year over last year, but no one tracks the numbers of car travel. It's just AAA's word. I have nothing against them, but I just think that those predictions are kind of funny, because...

David: Well, AAA's also... I mean, they're a big lobbying arm to Congress. I don't know if I would, always absolutely trust their word. They were one of the major lobbyists against seat belt laws in the early 80s.

Christopher: Yeah, everyone... [cross talk], I think you're right about that.

David: Yeah, I've always found that to be just a bit suspicious.

Christopher: You know, you're touching on another column that I've written about; an issue that's near and dear to me, which is awards and...

David: Oh, right.

Christopher: I mean, I think that there's so many... we just got through awards season where everyone has their Readers Choice award and the "Best Of, " and five diamond, five star awards, and I don't know if I trust any of those, either. I don't think that...

David: Right, because awards, basically are bargaining or publicity tools.

Christopher: Yeah. Well, there's that. And there's nothing wrong with that; I mean I'm in the publishing industry, and it's OK to do that, but...

David: Well, you have to find a way to maintain readership by getting people to pay attention to you, to come back to you if they've forgotten.

Christopher: Absolutely. I agree with you, and I think that one of the things that is lacking in these awards is methodology - is that there's not any disclosure of methodology, or there's very little disclosure.

David: Right, or who are the people that responded to the survey? How many people responded to the survey?

Christopher: How many surveys did you send out? What was the response rate? Yeah.

David: Right. And that's the idea when we run little mini-surveys on our site; we understand from the beginning, we're already surveying people who are interested in travel.

Christopher: And some of the surveys by very reputable media organizations, will actually just be a couple of editors sitting around saying, "Well, let's see, who do we put out there for Best Hotel this year?" And the editors will come up with five or six hotels and those will be the ones then who are put up for a vote, and you can see that there's a problem with that, because they're not - you certainly could miss a lot of really good hotels in that way, and you're also exposing the survey to the biases of a handful of editors.

David: Sure, exactly. Well, at the same time, how do you pick a single best hotel out of tens of thousands of hotels in the world?

Christopher: Yeah, that's the problem. A lot of times it's done just with a poll. You poll your readers and then you take the most popular responses. I think in the end though, when you look at who's responding, there's no such thing as a perfect poll, a perfect survey. It's always going to be slanted or biased because of the people who are reading the magazine or their website.

So at a very basic level, there's no perfect poll. That isn't to say that you can't use some of these as guidelines. You know one of the other things that, really annoys me is, you get these best of, but you get very few worst of. You can't have a best of without also identifying the worst ones out there.

David: You know, people, readers love to read about disaster and the worst of, and they all get together and commiserate and they have their own disaster story to tell.

Christopher: I think that... the obvious reason that news organizations don't do work surveys, is that advertising would suffer. You would have: what if company x were mentioned and company x were also an advertiser?

David: Right.

Christopher: It's a tremendous disservice to readers. Readers love those things. They want to know, for example which airline to avoid or which hotel chain to avoid and we as journalists have a duty to tell them that. Whenever we're overruled by the advertising people, and they say, "No, you can't do a worst of list." We're really betraying our readers.

David: Absolutely, I really think that is an internal struggle that every publishing company has, because there's the bottom line where everybody can have a job. You're bringing in ad revenue or sales revenue, but at the same time you want to be forthright and honest with, why you're writing what you're writing. A worst of, is a perfect example of what travel providers are doing wrong in the industry, and holding their nose to the grindstone, saying, "you need to do something about this."

Christopher: Absolutely, if you look at the results from this year. A lot of the polls had very similar results, especially in the airline side, to come sort of full circle from where we started. You had Southwest and JetBlue and Virgin America that did, extremely well on the domestic side of things.

David: Sure.

Christopher: Then you had on the international side, the Singapore's, the Virgin's that did very well there too. It seems like we have these repeat offenders. You think that we would learn, that the rest of the industry would learn, from these companies, but they don't, and it baffles me. I don't understand why.

David: Right, I had a conversation recently with a woman, who is the VP for customer service at Virgin America. She said, "You know we made some mistakes in the beginning, "but basically they figured out, how to hire the right people to represent the company, whether it is pilots, ticketing agents, or flight attendants. She said, "We spend a minimum of one day just assessing these people before even considering offering them a job." It's that whole idea that you can teach a skill set, but you can't teach personality traits.

So they try to find people that are very positive in their outlook to begin with, that smile comfortably, do care about the customer, as opposed to just filling a position. You know... have all your jobs filled. They want to find the right people for the jobs.

The very beginning, what a lot of other airlines don't think about, the frontline.

Christopher: I agree with you, actually I wish I had talked to this VP, unfortunately the executives that I come into contact with don't have the same, and probably don't all have the same feelings about customer service. I think that... I think a lot of them feel they're victims really, victims of management. You see that airline management has long ago, in many cases stop listening to employees, stop listening to customers.

David: Yeah, it's a siege mentality, is what it is.

Christopher: Yeah, they're just giving us what they want... It seems as if they have a very different view of... what...

David: What is necessary to make a business successful?

Christopher: Yeah, that too, but I do believe that airlines have lost track, lost sight of what the customers want, and don't even really necessarily see themselves as being in the customer service business. There's an expression that has really come into vogue in the last 12 to 24 months, and that is referring to passengers as self-loading cargo. I think that there a lot of legacy carriers that see themselves, really as being... I want to be careful not to overstate this they see themselves as being in the cargo business.

David: Right, moving something from one point to another.

Christopher: Exactly, they're just transporting people, and they're transporting cargo, and people really are the self-loading cargo. They don't really listen to us, because they don't think that we have anything important to say anymore. The ones that do listen to us, the Virgin's, the Southwest and the Jet Blue's are the ones that get rated higher, and are picked out of the list of airlines as being readers favorites.

David: Right, as you said, before we close up the conversation here. She said just a little bit ago. These polls and surveys... don't necessarily mean anything, but at the same time they are guidelines. So when an airline like Virgin or JetBlue or Southwest can say, "we've been rated customers' favorite for the past six years." That does sway people, who are trying to choose an airline.

Christopher: That's true, it does. I wouldn't deny that, even though I believe that these surveys are buy and large flawed and some of them ... I would even go as far to say, "fraudulent." I think people do pay attention to them. I can't sit here and deny that.

David: Right, right, they do have an effect, otherwise... they do, to begin with.

Christopher: Absolutely, yeah.

David: Chris, I want to say thanks for this. It's been a great conversation.

Christopher: I always enjoy...

David: I always leave these with more questions unasked than I went in with. You spur me to think a lot. Your columns are great and if people want to read them. They can go to Elliot.org. That's [spells it]. Have a good holiday.

Christopher: Thanks, I also should mention that my columns do run on Farmers.com. So you can see them there as well.

David: Yeah, absolutely. We take your syndicated columns and put them upon our site. We made an effort to get you on to the site. Your interest in consumer advocacy aligns with ours very closely.

Christopher: I appreciate it. I look forward to our next conversation. [music]

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