TravelPhotographer

(not sure where to post, move as needed)

I posted this at 3:10P on TPG

"Airlines, hotels, cruises, can raise cash immediately
if they started offering 5, 10, 20 year unlimited &
partially limited passes for $10K, $20K, $50K, or
more per person..."

but now thought of additional solutions:

a. vacant hotel & cruise ship crisis, coordinate with govt
to temporarily convert hotels & cruise ships to hospitals,
payment from govt., health care providers, etc.
govt negotiates reasonable bulk deal that companies accept;
b. vacant hotel & cruise ship crisis, coordinate with govt
to temporarily convert hotels & cruise ships to residences
for working class evicted because they couldn't
pay rent-mortgage due to loss of job during covid-19 period;
govt negotiates reasonable bulk deal that companies accept;
c. airline-hotel-cruise companies offer various limited &
unlimited pass per person for lump sum advance payment
by consumers, a way to raise cash fast;
limited, as in 1-yr, 2-yr, 5-yr pass, etc. that is triggered by
first usage; limited, as in, senior pass, weekend only pass, etc.
econ only, busn + econ only, many permutations possible;
Feasible? Suggest improvements?

Yoshi212

Airlines, cruise ships and hotels do not want to be associated with housing sick and/or quarantined people. Airlines it's a bit less of a thing but people do searches of specific cruise ships and properties before staying and if they see anything remotely leper colony-esque their reaction will be to run. Not saying it is logical but it is the knee-jerk reaction.

Meanwhile if you compare it to a cruise ship being brought in to house victims of hurricanes or earthquakes it's great positive publicity.

Atlas doing the China quarantine flight was far too dangerous for an airline to be associated with at the time. It also made logistical sense to use a plane that can have the vast majority of touchable surfaces removed for disinfecting unlike a standard airliner.

The US Navy operates 2 floating hospitals known as Mercy class ships and overall governments operate some 20-30 medical mission ships.

TravelPhotographer

They will be seen as heroes, IMO.
The REAL hospitals would be devoted to covid-19.
Hotels, cruise ships would handle overflow of other medical stuff.
If they must choose between going out of business & serving govt. needs for payment,
the latter will occur, IMO.

Yoshi212

I'm not saying you're wrong about it having potential for a heroic spin but people as a group are stupid and easily frightened.

Take a look at hotels that shelter overflow homeless populations or families awaiting housing placement. They're not at Hiltons or Sheratons but rather Motels 6, Super 8 and the extended stay establishments. The ones willing to accept them do it for the guaranteed money, which is not often a great rate compared to what mainline chains charge for a room. I know people who got FEMA vouchers for hotels after hurricanes and it wasn't easy to use as one might think. I really only see it being practical under some sort of executive force during emergency but not by voluntary action.

My family owns an apartment complex and take about 5% section-8 housing mostly as a political move for a politician family member and it's a mixed bag. Most have been great but the money is less than market and when things go south they tend to go further south than a standard tenant. This can have an impact on reputation and on current tenant renewals.

TravelPhotographer

Solved by NOT mixing regular patrons with crisis patrons.
A hotel or cruise ship is either totally devoted to crisis or remains regular.
When crisis subsides, hotels & cruise ships, one by one, are converted back to regular.
Companies have been economically saved by NOT losing nearly as much revenue
due to shuttered hotels & ships...

TravelPhotographer

Exactly!:

https://www.wsj.com/articles/new-yor...ls-11584556841

Now...
if airlines want immediate infusion of cash, they could start
offering variety of limited & unlimited passes for upfront
payment; econ, busn, 1st, weekends only, weekdays only,
X number of flights per week or month or year;
they might price according to one's rolling year
payments to that airline, e.g., the less money consumer paid
to that airline, the lower the pass price...

Same for hotels & cruise lines...
offer limited & unlimited passes for upfront payments....

chgoeditor

Not entirely true. WSJ had an article today about Asian hotels (Renaissance, Fairmont, Park Lane, Hyatt) that are offering quarantine specials.

That said, to the broader idea of purchasing passes: I have no desire to become an unsecured credit to a major hotel/airline/cruise line that is in tough financial straits.

TravelPhotographer

a. they are ALL in financial crisis, now, right...?
b. maybe there's a way to offer "secured" passes, e.g.,
passes remain usable if bankruptcy declared or company
sold at discount to investors, etc.

TravelPhotographer

Now Carnival Cruise is offering ships to become hospitals:
https://nypost.com/2020/03/19/trump-...avirus-crisis/

If they also want cash, offer limited & unlimited future cruise passes...

davistev

It would seem the governments of the world would be wiser to invest money into medical research to find a vaccine for Covid-19 rather than spend the money on bailing out corporations.

TravelPhotographer

off topic, many doing both, but you can make huge donations to your favorite (10) researchers...
that accomplishes more than a blahblahblah post...?

chgoeditor

I am not a lender nor a bankruptcy lawyer, but secured creditors are those who have liens on American Airline's property. AA appears to have $33B in debt, and I presume the secured creditors are those who financed airplanes, real estate, gate leases, etc. You don't just become a secured creditor because an airline says you are. If the company files for Chapter 7 bankruptcy (liquidation), the assets are sold and the money goes to repay secured creditors, who do not get the full value of the money they're owed except in extraordinary circumstances. So even if you were fortunate enough to buy a $10K pass that was somehow secured, you'd probably walk away losing money after you pay a lawyer to argue with creditors who have senior secured debt in the millions.

:D!

This idea may be more likely to work once people are able to travel again. All the airlines have to do is survive until then....

Another idea is to offer status for a fee. For Americans, it would be easy: perhaps a third of the EQD that they would have needed to spend to reach the next level - after all, you were supposed to have spent that money on flying.

TravelPhotographer

Can't an unlimited-limited pass contract include protections wrt bankruptcy?
That bankruptcy combined with continued service will NOT wipe out passes?
That bankruptcy filing will pre-trigger sliding scale refund based on how many
times pass was used, but in a way still very favorable to pass owner?
Etc Etc, there MUST be creative ways to resolve this issue.
How many hundreds of millions of $$ could an airline generate
if they offered, say, once-a-week busn class rt 20 yr pass for $500K
to those who have 2-yr history of flying on that airline of less than monthly...?
That kind of qualifier would protect airline from losing $$ from frequent spenders...?

bitterproffit

They could take out loans, like what we have to do when we forget to have an emergency fund and spend all our money on lattes and avocado toast. The cruise lines could ask the government of the country they are registered in for help

Look how one airline tried to get out of the lifetime memberships they sold (was it AA or UA) for lounge access. Do you really think they will live up to their end of the deal?