Southwest Prioritizes Business Travel Again

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Hello from Skift. It’s Friday, April 26 in New York. Here’s what you need to know about the travel industry today.

Rashaad Jordan

Today’s edition of Skift’s daily podcast explains why Southwest Airlines is focusing on business travelers, how Barbados is appealing to digital nomads and why Accor has recovered with surprising speed.

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Episode Notes

Business travel has yet to fully rebound, but the sector is recovering much faster than Southwest Airlines predicted. So much so that the Dallas-based carrier is pulling back from popular leisure destinations to refocus on flights to key business travel markets, reports Madhu Unnikrishnan, editor of Airline Weekly, a Skift brand.

To meet growing business travel demand, Southwest is reducing the number of flights it operates to Hawaii and restoring flight frequencies — known as schedule depth in the airline industry — to routes. popular with business travellers. This depth, writes Unnikrishnan, has allowed the carrier to rehabilitate passengers in the event of cancellation and to strengthen its reliability with business travelers. Southwest wants to restore depth to its 2019 program this year.

But Southwest faces a major obstacle in its quest for a full recovery – a lack of flight instructors. CEO Bob Jordan said during the company’s first quarter earnings call on Thursday that the airline does not have enough flight instructors to train the 1,200 pilots it needs to hire this year.

Now let’s move on to Barbados’ efforts to establish itself as a remote work hub. The country is launching a “destination activation” event as part of its strategy to appeal to the growing digital nomad market, a project that could be replicated elsewhere in the Caribbean, writes business travel editor Matthew Let’s parse into this week’s Future of Work briefing.

The government of Barbados commissioned Zeal, a US-based digital marketing agency, to organize the two-week event in July. The company will host a series of workshops, panels and interviews, as well as information on obtaining a digital nomad visa. The digital nomad visa is valid for 12 months, but applicants must prove that they earn at least $50,000 per year and have health insurance. The country’s hotel executives are involved in the project, which was first discussed in 2020 but delayed due to the pandemic.

Zeal founder and chief marketing officer Eric Sutfin said he hopes to replicate the project in other destinations in the region, including Puerto Rico – which has already launched its own campaign to tap into the digital nomad market – this fall or this winter and Costa Rica at a later date. The company is already working with hoteliers in Jamaica and the Bahamas.

Let’s finish with Accor’s ongoing rebound. The company has seen its room rates – outside of the Asia-Pacific region – recover completely over the past four months. Additionally, he expects bookings to return to 2019 parameters by the end of the year, writes Sean O’Neill, hotel editor.

The Paris-based hotel group attributed the rise in room rates to pent-up demand for its luxury and leisure properties and travelers making more advance reservations. Company executives said the large number of advance bookings helped them spot supply and demand trends driving the price hike.

Accor generated more than $730 million in revenue in the first quarter. Although this figure represents an increase of 85% compared to the same period last year, it remains 23% below the mark recorded for the first quarter of 2019.