United’s CEO Oscar Munoz Will Not Become Airline Chairman

United’s CEO Oscar Munoz Will Not Become Airline Chairman

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United Airlines has announced that chief executive Oscar Munoz will not be promoted to the title of Chairman next year as originally planned.

In a proxy filing made Friday with the Securities and Exchange Commission by United Continental Holdings Group, the airline said Munoz had agreed to waive a clause in his contract that had guaranteed him the title next year. Munoz also dropped a contractual option to resign as CEO if he didn’t receive the Chairman position.

United also used the proxy filing to announce that it was changing its executive compensation policy so that it is “directly and meaningfully tied to progress in improving the customer experience.”

The moves come as United continues to deal with the fallout from #BumpGate in which a paying passenger was forcibly removed from a flight in order to make room for the airline’s employees. Many considered Munoz’s original response to the crisis as tone deaf — only later did the executive issue an apology and promise a full investigation. The incident has already led United and other airlines to change their policies on denying boarding to passengers (“bumping”), as United will no longer allow passengers to be removed from aircraft in order to accommodate crew members, and Delta increased its maximum compensation to nearly $10,000 for extreme bumping situations.

But even with these changes, airline incidents continue to pop up in the news and on social media. Last week United was again in the headlines for asking a bride and groom to disembark from a flight to their wedding, and earlier today an American employee had a heated confrontation with a passenger captured on video.

H/T: The New York Times

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April 22, 2017 at 01:44PM

Kayak CEO on Giving Consumers a Choice and 10 Other Digital Trends This Week

Kayak CEO on Giving Consumers a Choice and 10 Other Digital Trends This Week

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Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines digital trends.

For all of our weekend roundups, go here.

>>It’s all but certain that TripAdvisor is going to get back on TV in some form in 2017. It really needs to unless the company wants to push the launch into next year pending product changes and improvements: Can a TripAdvisor TV Campaign Be a Game-Changer? Two Views

>>The market for software to tour merchants is fragmented without a single clear leader. Yet Peek now has an advantageous position, thanks to the acquisition of the assets of one of its chief rivals: Peek Acquires Zozi’s Assets in Further Consolidation of Tours and Activities Tech Sector

>>Did the U.S. Trivago Guy just get William Shatnered? Like Shatner for Priceline.com, actor Tim Williams, who had become omnipresent on TV in the U.S. for Trivago, has hardly been seen over the last couple of weeks. It’s good for brands to freshen things up and female empowerment ads are trending: Did the Trivago Guy Just Lose His TV Gig?

>>For online meeting space booking platforms like Bizly to be profitable, they have to offer both automated purchase capabilities and chat functionality with live venue staff to satisfy the demands of enterprise clients: Bizly Wants to Kill the Traditional Booking Process For Small Corporate Events

>>Companies can now expand their use of online platforms to book small meetings in creative venues, because they now have the ability to message venues directly in real-time and integrate compliance requirements: The Future of Online Bookings for Small Event Space — Meetings Innovation Report

>>General Catalyst and Accomplice, the famed venture capital firms, join us in seeing promise in Freebird, which gives corporate travel agencies superpowers when it comes to rebooking travelers: Flight Disruption Startup Freebird Snares Funding from General Catalyst and Accomplice

>>Given all the hype about messaging, it’s eye-opening that only one out of eight American travelers say they have electronically chatted with a travel brand: Travel Habits of Americans: 87 Percent Haven’t Yet Messaged With a Travel Brand

>>Even if its growth has slowed gradually, Uber still has a huge advantage over its rivals in corporate travel. Its global scale, as well, bodes well for Uber continuing to grow as an option for international business travelers: Uber’s Growth Is Stalling Among U.S. Business Travelers

>>Facebook is challenging online advertising heavyweight Google by offering innovative products that target travel brands (and other sectors). Expect the social network to seize some market share: Facebook and Google’s Travel Ad War — Digital Marketing News This Week

>>Long-promised improvements to airport security screening and rebooking in the event of flight disruption may finally be in the offing, thanks to follow-on rounds of fundings to the startups Clear and Freebird: Screening Company Clear Raises $15 Million: Travel Startup Funding This Week

>>Hafner reveals his admiration for new acquisition Momondo Group, expresses his bother at Trivago’s ad spend, and pooh-poohs Skyscanner’s analytics approach in a frank discussion that cut to the core of what makes metasearch different: Video: Kayak CEO Says He Wants to Give Consumers a Choice

 

Photo Credit: Kayak CEO Steve Hafner speaking with Skift’s Dennis Schaal (R) at Skift Forum Europe in London on April 4, 2017. Skift

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April 22, 2017 at 01:24PM

Air Berlin Sees On-Time Performance Suffer in Transformation Toll

Air Berlin Sees On-Time Performance Suffer in Transformation Toll

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Air Berlin

This month’s drop marks a deterioration from Air Berlin’s already patchy performance record. Air Berlin

Skift Take: This decline in service is due to wrenching changes. Major shareholder Etihad has pushed Air Berlin to trim its fleet size, to focus on longer haul routes, and to carve out its leisure routes into a unit that may be sold to TUI.

— Sean O’Neill

Air Berlin’s service levels have fallen sharply this month in a sign that the unprofitable German carrier is struggling with the process of downsizing into a smaller network airline focused on long-haul services.

Just 56.4 percent of Air Berlin flights arrived on time through April 17, the lowest reading in at least 16 months and 30 percentage points below the peak in that period, according to data provided by flight-scheduling firm OAG. The airline blamed winter weather, air-traffic control issues and problems with a new ground-handling provider for the poorer performance, while internal tensions have caused flight attendants to voice their frustration.

Air Berlin is undergoing a radical downsizing as it cuts its mainline fleet by about half, leasing 38 Airbus SE single-aisle A320 aircraft to Deutsche Lufthansa AG and merging its leisure-travel operations with the German airline arm of tour operator TUI AG. The carrier will focus on transatlantic routes and related feeder traffic through its Berlin and Dusseldorf hubs after years of turnaround efforts and cost-cutting programs failed to restore earnings.

The transformation is frustrating and scaring employees and has caused more workers to call in sick, according to an April 10 letter from cabin-crew representatives to management. Flight attendants said conditions were “unspeakable,” with excessive workloads, nonexistent ground services at some airports and snags involving baggage-handling operators, according to the letter obtained by Bloomberg.

The airline on April 12 postponed the introduction of routes to San Francisco and Los Angeles from early May to later that month, citing performance issues with new ground-handling provider AeroGround at the carrier’s Berlin Tegel airport hub.

Snowfall, Fog

The bulk of delays stem from outdated equipment and a lack of staffing at the contractor, which checks in Air Berlin passengers, handles luggage and performs other services such as shifting planes on the ground, said Christian Liepack, a spokesman for the airline. Bad weather, including snowfall and fog in Munich, and strikes by air traffic controllers in Italy and France also contributed to the “runaway” drop in punctuality this month, he said on Thursday.

AeroGround has assigned 40 employees from Munich to Berlin temporarily until newly hired permanent workers can complete security clearances and take their posts, said Ingo Anspach, a spokesman for Munich airport, which owns the ground handler. It also sent extra equipment to Tegel, and performance “clearly improved” with these measures, he said.

This month’s drop marks a deterioration from Air Berlin’s already patchy performance record. The carrier ranked 96th out of 103 airlines, with a 75.6 percent on-time rate for the 12 months through March, according to a separate statement from OAG. German rival Lufthansa placed 50th, at 82 percent of flights on time, while the Lufthansa-Turkish Airlines joint venture SunExpress stood at 4th, at 89.7 percent. Service is defined as on time if a plane arrives less than 15 minutes late.

Air Berlin is scheduled to report first-quarter earnings on April 27.

©2017 Bloomberg L.P.

This article was written by Richard Weiss from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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April 22, 2017 at 11:02AM

The Effects of Trump’s First 100 Days and 9 Other Tourism Trends This Week

The Effects of Trump’s First 100 Days and 9 Other Tourism Trends This Week

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Throughout the week we post dozens of original stories, connecting the dots across the travel industry, and every weekend we sum it all up. This weekend roundup examines tourism.

For all of our weekend roundups, go here.

>>Trump slump or Trump bump? It will take more than five weeks of spending behavior to provide clearer direction: International Tourist Spending in the U.S. Is at Record High So Far This Year

>>Only time will tell whether President Trump’s policies will inflict lasting damage on U.S. travel companies and the image of the U.S. as a preeminent international destination: What Trump’s First 100 Days Tell Us About Travel’s Next Four Years

>>Chinese consumers are responsible for one-third of the world’s personal luxury spending, but the consumers are younger and more affluent than the sector is accustomed to serving: China’s Luxury Travelers Are Young and Spending More Than Ever

>>Silence is indeed golden and isolation comes at a premium as well for luxury travelers who really, really want to get away: Isolation Is the Next Big Thing in Luxury Travel

>>Los Angeles is part of a trend across major global cities as they attempt to distance themselves from less welcoming parts of their countries. Most cities can’t claim to be as diverse as Los Angeles, which helps its message appear honest yet measured: Los Angeles Wants Its ‘Everyone is Welcome’ Campaign to Connect With Global Millennials

>>All luxury is not created equal, and understanding the modern luxury travel market requires a new approach and a deep appreciation of the sophistication of modern consumers and providers: Launching Today: Skift New Luxury Travel Newsletter

>>Switzerland Tourism is employing “precision marketing” as the number of Chinese individual travelers rose last year while overall arrivals dropped. Other destinations it competes with for long-haul Chinese travelers, including the U.S., Canada and New Zealand, should take note: Switzerland Tourism Fights Rivals for Chinese Travelers With New Focus

>>UNESCO sites — of all places — should be the destinations taking leadership roles in tourism management planning as they’re often the first place many tourists think about when deciding what to do on a trip: Nearly Half of UNESCO Sites Don’t Have Plans to Manage Overtourism Challenges

>>Disney’s Animal Kingdom needed more attractions to get visitors to stay longer, but will Avatar be the key to boosting the park’s popularity? Disney’s Newest Land Is Meant to Add a Literal Glow to Animal Kingdom

>>There are vastly fewer retail travel outlets now than two decades ago, but a few creative agents are rethinking how to buy and sell travel in the real world: The Travel Agents Rethinking the Brick and Mortar Retail Experience

 

Photo Credit: President Donald Trump, accompanied by Environmental Protection Agency (EPA) Administrator Scott Pruitt, third from left, and Vice President Mike Pence, right, signs an Energy Independence Executive Order, Tuesday, March 28, 2017, at EPA headquarters in Washington. Pablo Martinez Monsivais / Associated Press

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April 22, 2017 at 10:06AM

My MacBook: A Complete Guide for Electronics-Ban Airport Thieves

My MacBook: A Complete Guide for Electronics-Ban Airport Thieves

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New security regulations from the U.S. Department of Homeland Security and U.K.’s Department for Transport ban passengers flying from certain Middle East and North African airports to the U.S. and U.K. from bringing electronics bigger than a smartphone into the cabins. Laptops, e-readers, tablets, cameras, and more will now have to be checked in at the airport of origin. . . . “Bag theft goes up tremendously during these bans, as does identity theft and intellectual property theft.”

—Condé Nast Traveler.

Dear airport thief,

Welcome! Of all the laptops in all the bags checked from Istanbul to New York, you’ve stolen mine. A little about me—I am not an Emirati businessman with many Swiss bank accounts, the passcodes to which are stored on my numerous tablets. Rather, as a broke graduate student in the humanities, just months ago I spent six per cent of my annual income on this thirteen-inch MacBook Pro for my research trip to Turkey. Here is a friendly guide regarding its contents and care, before you wipe all my data and sell the computer on eBay.

“I’m With Her” sticker: Good luck scratching this puppy off! As a white woman with an American passport, the loss of this sticker is what I will most loudly lament in the Facebook post I will write about the hazards of international travel in the Trump era. The status will get three hundred and forty-seven likes and, if I’m lucky, a share by my aunt in Dallas.

Thousands of photos of my friends shoving food in their faces: See, the corn kernels on Parul’s teeth are supposed to be gold teeth! Doesn’t she look like James Franco in “Spring Breakers”? Isn’t it funny? You will find duplicates of these files—as well as many photos of Sydney licking doughnuts—on my digital camera, also now in your possession.

My Turkish-English dictionary app: Someone once told me that the Turkish word for “cucumber” is really hıyar, but that hıyar was so frequently used as dirty slang that the powers-that-be changed the name of the vegetable to salatalık. Of course, there is only one word I can remember in Turkish, and that word is hıyar. Thanks for stealing my laptop, hıyar-head!

Saved passwords: To my Gmail, my dad’s Amazon Prime, my mom’s Netflix, my mom’s Hulu Plus, my ex-Tinder-match’s roommate’s dad’s HBO Go. Please, don’t mess these algorithms up too badly. My excellent taste in television is all I have left.

“Rainbow,” the 1999 album by Mariah Carey: This is the first CD I uploaded to my iTunes, circa 2003. I know Mariah’s runs in “Heartbreaker” by heart. Perhaps you can learn the Jay Z part (“She want love in the Jacuzzi, rub up in the movies / Access to the old crib, keys to the newbie”), and we can film a heartwarming lip-synching video after you return this laptop?

Microsoft Office suite, 2016 edition: Including Excel, which has not once been sufficiently explained to me. But you still have time to learn—Excel your way out of your life of petty theft!

Abortive attempts at poetry, most about my ex Danny: DO NOT OPEN.

Abortive attempts at fiction, some about my ex Danny: See above.

My master’s thesis: A hundred pages, twelve-point type, on Syrian refugees with U.S. visas, stuck in Turkish airports. Enjoy!

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April 22, 2017 at 09:52AM

American Airlines Employee Argues With Passenger After Allegedly Nearly Hitting Baby

American Airlines Employee Argues With Passenger After Allegedly Nearly Hitting Baby

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Coming on the heels of United’s #BumpGate incident and fallout where a paying passenger was dragged off a flight to make room for employees, American Airlines is in the news now as a video has surfaced on social media showing one of the airline’s employees getting in a heated argument with a passenger after allegedly nearly hitting another passenger’s baby with a stroller.

Video of the incident, which occurred prior to take off on American Flight 591 from San Francisco (SFO) to Dallas (DFW), doesn’t show the impetus for the argument but starts with the female passenger crying at the front of the cabin while holding her child as the captain and a flight attendant look on. A male passenger, who appears to have observed the original incident, gets up to demand “the name of the guy who did that with the stroller,” referring to the male employee who had allegedly pulled the stroller away from the woman and who at that moment is not on the plane.

OMG! AA Flight attendant violently took a stroller from a lady with her baby on my flight, hitting her and just missing the baby. Then he tried to fight a passenger who stood up for her. AA591 from SFO to DFW.

Posted by Surain Adyanthaya on Friday, April 21, 2017

Later, when the employee returns to the plane, the male passenger gets up again and points aggressively at him, saying “You do that to me and I’ll pop you flat,” to which the employee angrily replies “You stay out of it!” The situation escalates when the passenger gets out of his seat and confronts the employee face-to-face, with the two of them physically threatening each other.  “I’ll knock you silly,” says the passenger as the employee replies, “Bring it on… You don’t know what the story is.”

IMG-aa-flight-attendant-arguing
An airline employee and passenger confront each other before takeoff of AA Flight 591. Image from Facebook video by Surain Adyanthaya.

Eventually the captain and flight attendants push the two men away from each other and the passenger returns to his seat while the employee steps back off the plane. As the video ends, the woman with the baby can still be heard sobbing. According to witnesses, the woman and her family were eventually taken off the plane themselves.

Unlike United’s reaction last week, American immediately announced the employee seen in the video had been “removed from duty” pending an investigation. The airline has issued a statement saying:

“What we see on this video does not reflect our values or how we care for our customers. We are deeply sorry for the pain we have caused this passenger and her family and to any other customers affected by the incident. We are making sure all of her family’s needs are being met while she is in our care. After electing to take another flight, we are taking special care of her and her family and upgrading them to first class for the remainder of their international trip.”

While American appears to be handling this event quickly, the fact remains that grown adults crying on airplanes should not be a common occurrence. The video clearly shows a highly charged situation, one that the airline’s employee should have attempted to de-escalate rather than make worse.

What are your thoughts on this newest airline incident?

Featured image from Facebook video by Surain Adyanthaya.

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April 22, 2017 at 09:28AM

News: British Airways Gatwick traffic growth hits double figures

News: British Airways Gatwick traffic growth hits double figures

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British Airways Gatwick traffic growth hits double figures

Over the last five years, British Airways’ operation at Gatwick Airport has seen 40 per cent more customers travel (from 4.4m to 6.2m) and an increase of 33 per cent in the number of routes it serves (from 52 different destinations in 2012 to 68 in 2017).

Sean Doyle, British Airways’ director of networks, alliances and Gatwick, said: “We’ve really focused on growing our Gatwick operation in the last five years, investing in new routes, driving punctuality and, thanks to our move to the South Terminal, delivered an improved airport experience.

“Although we have a staunch number of business travellers and destinations from Gatwick, many customers are flying for leisure, often on a BA Holidays trip. They want great prices and punctuality, and are driven by value and choice. In fact, we first launched our short-haul basic fare at Gatwick because we knew it would work for our customers before rolling it out across our network.

“We’ve seen huge demand for flights to North America driven by new destinations such as Oakland in San Francisco Bay and Fort Lauderdale and we’ve started 19 new short-haul services in the last five years to destinations such as Lanzarote, Malta, Rhodes and Limoges. We flex our schedule to make the most of seasonal destinations for our travellers, serving warmer climes in the summer and ski destinations in winter, in addition to the year-round performers like New York, Costa Rica, Orlando and Barcelona.”

“We can also offer incredibly low fares from Gatwick. Each-way prices based on a return flight to new destinations Oakland and Fort Lauderdale start from just £211 and £216 and to the likes of Alicante and Venice from just £30.

“And critically for our travellers, last year we had the most punctual short-haul operation of the three biggest airlines flying from Gatwick to Europe. In fact, according to CAA figures, across all London airports, we outperformed easyJet’s punctuality by 15 percentage points and Ryanair’s by six percentage points in 2016, and we’re continuing to invest in our operational resilience to grow that difference even more.”

British Airways’ fleet at Gatwick has grown in the last five years as the airline has introduced four more Boeing 777s (from nine to 13), increased the number of A319s from two to 11 and introduced 15 A320s, which replaced 19 Boeing 737s.

Doyle continues: “Our renewed fleet has delivered an increase in capacity of more than 10 per cent since 2012. We are refreshing our Boeing 777 fleet with new furnishings, improved IFE and in-seat power, and moving to a ten-abreast configuration in economy from March 2018. This will enable us to offer even more of our lowest fares, align our World Traveller cabin to other airlines such as Air New Zealand and Emirates and increase the size of our World Traveller Plus cabin by 28 seats to give more people the option to travel in our popular premium economy cabin.

“Our new home in the South Terminal is proving very popular with our customers – it’s easy to find, and just a short walk from the train, plus the new premium check in area, which has been designed with the same look and feel as Heathrow Terminal 5 and New York JFK , creates an elegant start to any trip. We expect customers to start checking-in a little earlier than usual to take advantage of our new lounge, which has 40 per cent more floor-space than its predecessor, sweeping views of the runway, amazing complimentary food and drink, a kidzone area and tonnes of practical features such as power sockets with UK, EU sockets and USB ports, upgraded lounge Wi-Fi and shower suites.

“We plan to carry on growing from Gatwick and will continue to explore and quickly react to any new opportunities, be they destinations or services that we think our customers will love. And it’ll all be delivered with the benefits of the customer care, generous baggage allowances, safety record and great network that our travellers know and expect from British Airways. ”

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April 22, 2017 at 09:19AM

News: KLM to launch non-stop flights to Costa Rica

News: KLM to launch non-stop flights to Costa Rica

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KLM to launch non-stop flights to Costa Rica

KLM Royal Dutch Airlines is launching direct flights to San José, Costa Rica, twice a week. The operation will commence October 31st, 2017, during the winter season in Europe.

Pieter Elbers, KLM President and CEO, said: “KLM currently brings many passengers to Costa Rica via Panama. The increasing interest of the European market in this beautiful country convinced us to start a direct flight to San José”.

Luis Guillermo Solís, President of Costa Rica, said: “This new flight, not only will facilitate visits to our country, but also thanks to KLM´s global network, this route will serve as a liaison for Costa Rica to open its doors to tourists from all Europe. This will for sure strengthen tourism in our country, generating benefits to the more than 600,000 persons who work in this activity in direct and indirect manner, and to the communities that find in tourism their opportunity to grow”.

KLM will fly twice a week to Costa Rica, Tuesdays and Fridays.

The flight will leave Amsterdam-Schiphol at 15:25 and will arrive at San José at 20:05 of Costa Rica. The return flight will leave San José at 22:05 and will arrive at Amsterdam-Schiphol the next day at 15:10.

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April 22, 2017 at 09:10AM

Disney v. Universal: Which Free Areas Are Most Worth It?

Disney v. Universal: Which Free Areas Are Most Worth It?

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Anyone who follows me on Twitter (@JoeCortez) may recall my rather recent experience at a gaming convention in Orlando. Both the flight and hotel were an easy decision, thanks to my colleague’s tips on how to save money by being a mystery shopper and the ability to get bonuses by status matching at my hotel chain.

The one challenge I faced was what to do after I bombed out after losing straight sets.

Widely considered the amusement park capital of America, Walt Disney World and Universal Studios Orlando headline a number of tourist attractions in the area. Most important to my quest for personal amusement were the two “free” areas of both resorts: Disney Springs and Universal Citywalk.

Separated by only ten miles, my curiosity had to be satisfied: which amusement park free area was the best? Armed with little more than a phone and walking shoes, I set out to find out.

Disney Springs: A low-cost adventure for all types of families

My first stop took me to Disney Springs, the free shopping district that is connected by bus and taxi to all of the Walt Disney World resort parks. As the hubs created to keep those staying in the Disney Resort within the resort, this shopping district did not disappoint.

With over 100 retailers in walking distance, shopping options abound for those looking for the right souvenir or memento from their Orlando trip. Furthermore, while most of the shops had some sort of Disney theme to them, not all of the shops were branded by a Disney property (now including Star Wars and Marvel). Among the offerings in Disney Springs were a cigar shop, a bowling alley and full bar, as well as restaurants ranging from fast-casual to reservations-required.

Shopping was not the only attraction at Disney Springs. The more interactive items included rides in an observation balloon with a view of the Disney theme park property. At $20 per ride, it could have been a frugal experience for one – but an expensive venture for a family.

This brings me to the one con I experienced with Disney Springs. Despite being outside of the theme park area, I found myself paying resort prices for almost everything. From the food options to even low-cost souvenirs, everything I ran across would cost nearly as much as if I were in the theme park proper.

With an interest in seeing more than met my experience, my next stop took me up the road 12 miles, and a taxi ride of $25. Lesson learned: utilize public transportation or ridesharing when in Orlando.

Universal Orlando CityWalk: Something for everyone, but geared towards adults

Competing directly with Disney Springs is the Universal Orlando CityWalk: the free area outside the Universal Theme Parks, leading directly into each. After a quick stop through a TSA-style security checkpoint, I was free to roam the attraction area outside of both Universal Studios Orlando and Worlds of Adventure.

Unlike Disney Springs, CityWalk was noticeably smaller, but offered direct access to the theme parks. While Disney Springs had a mix of stores from brands I was well aware of, Universal CityWalk offered a lesser mix of brands, from their own retail shops to global stalwarts like Hard Rock Café. When it came time to eat, I had my choice of everything from fast-casual to full-service restaurants. To my surprise, the fast food options were actually affordable, with prices similar to what I would find outside of the theme park area.

During my walkthrough, I found many of my entertainment options were limited to certain hours of the day, with many of them opening in the evening and closing around 2 a.m. Among them were a karaoke bar featuring a live band, an Irish Pub and a dance club featuring local DJs. Outside of those attractions, what was there left to do besides eat, shop, or visit the theme parks? Watch a movie, or play miniature golf at one of the two courses.

Which “free” area offers the best for my buck?

Both free areas offer something unique for different audiences. Disney Springs is definitely oriented towards family fun, offering all the shopping, attractions and performances to keep everyone amused for the day. However, Universal CityWalk was definitely geared more towards the adults, with plenty of fun for when the sun goes down and the kids go to bed.

If I were forced to stay at an amusement park with a family, Disney Springs would definitely be my first choice of amusement park area fun, while Universal CityWalk is where I would go in the evening with a group of friends. No matter which you choose, each offers at least a quarter-day’s worth of entertainment and a well needed break from amusement park overload.

Which amusement park free area is your favorite? Let me know your thoughts in the comments below!

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April 22, 2017 at 09:03AM

BP Gulf Oil Spill Damage Valued at $17.2 Billion as Tourism Still Struggles

BP Gulf Oil Spill Damage Valued at $17.2 Billion as Tourism Still Struggles

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Tulane Public Relations

Damage from the BP oil spill deterred tourists for years. Tulane Public Relations

Skift Take: The BP oil spill scared tourists away from the Gulf Coast for years and effects still linger. These states, especially Mississippi and Alabama, can’t afford to have their cruise terminals, beaches, wildlife, and seafood poisoned.

— Sarah Enelow

BP Plc’s 2010 Gulf of Mexico oil spill caused damage to beaches, animals, fish and coral that the public values at $17.2 billion, according to a financial accounting released on the seventh anniversary of the disaster.

The tally, published Thursday in the journal Science, is based on a survey of thousands of Americans that asked what they’d be willing to pay to prevent the kind of impacts unleashed by the spill, which began with an explosion on the Deepwater Horizon drilling rig on April 20, 2010.

The worst oil spill in U.S. history killed 11 rig workers, spewed 134 million gallons of crude, soiling birds and marine life across the Gulf. BP, which contracted the rig, was forced to sell off billions of dollars in assets to pay for damages. The latest study, ordered by the U.S. government, is the most comprehensive attempt yet to put a value on the environmental losses, said Kevin Boyle, one of the lead researchers.

“The results were eye-opening,” Boyle, an agricultural economist at Virginia Tech University, said in a statement from the school. “People value our natural resources, so it’s worth taking major actions to prevent future catastrophes and correct past mistakes.”

Brett Clanton, a Houston-based spokesman for BP, didn’t respond to phone messages seeking comment.

Huge Liabilities

BP has set aside more than $50 billion for damages, which includes liabilities beyond ecological impacts, such as economic losses to the fishing and tourism industries. Transocean Ltd., owner of the rig that burned and sank, and Halliburton Co., which provided cement services for the project, also paid billions for their roles in the disaster.

The study found those surveyed would be willing to spend an average of $153 more in taxes for programs that would keep a similar oil spill from occurring. That was multiplied by the number of households represented by those who completed the survey to come up with the total of $17.2 billion.

BP replaced its chief executive officer after the Deepwater Horizon catastrophe and created a new safety office with “sweeping powers to oversee and audit its operations,” according to a statement on its website.

“Making BP a safer, more risk-aware business was the first priority” of the company’s new management, the statement says.

–With assistance from Mark Shenk

©2017 Bloomberg L.P.

This article was written by Alex Nussbaum from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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April 22, 2017 at 09:02AM

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