If an airline, hotel brand, or cruise line offered a "travel bond", would you buy it?
It's kind of a popular topic in local restaurant circles: the idea is that you give the restaurant cashflow right now in exchange for dining after they reopen. e.g., Buy a $100 gift card today, use it for $125 at some point in the future. Generally speaking, the gift card would spend like cash - no restrictions - but you're placing a bet that the restaurant won't entirely cease to exist during the quarantine period. (The ones I've seen are this simple mechanic - they don't behave like actual investment bonds.)
Seeing all of the airlines bellyaching about giving refunds, which is awful rich given how they've had billions of dollars in profits for several years now and showered their executive with huge bonuses, it makes me wonder if they wouldn't offer the same concept.
Would you take them up on such an offer? What kind of premium would you want to get "paid" to take the offer?
My take:
- I'd only consider any offer if it truly spent like cash. No expiration date, no minimum fares, no restrictions on what may be bought (tickets, upgrades, etc. - whatever they sell directly).
- Among US airlines, I'd consider it for WN and maybe DL at a 20-25% payback.
- I'd have to think long and hard about whether I'd take any offer from AA or UA, simply because I flat out do not trust them to behave ethically, ever.
- Probably wouldn't buy a ULCC at all. They might legit go Ch.7 if this lasts too long.
- Would consider Marriott, Hyatt, or Hilton at a 20-25% payback provided it works at any property.
- Wouldn't consider any offer from a cruise line. At this point, that's just straight-up gambling betting on who survives this and who doesn't.
So far, airlines hope that liberal refund/change rules for the coming months will have the effect they need - getting people to book some summer/fall/winter travel. But they may need even more than that, so something like this wouldn't seem that far-fetched.