China's Travelers Want to Go Abroad. There Aren't Enough Flights.

0:00ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands, ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.

0:48Sarah Dandashy: Hilton just made a rare move, cutting fees for its hotel owners. JetBlue is still losing money but just convinced investors it has a plan. And China's travelers are ready to go abroad, but the problem is there aren't enough flights to get them there. I'm Sarah Dandeshi. It's Thursday, July 30th, and this is the SCIF Daily Briefing. First up, Hilton just did something hotel brands don't often do. It cut fees for its hotel owners. But here's the context. For the past two years, hotel owners have been getting squeezed. Room rate growth slowed and actually went negative last year, while costs kept climbing.

1:23Sarah Dandashy: Insurance, energy, labor, all stubbornly high. Hilton and other big brands kept collecting their fees while owners who actually run the hotels saw their margins shrink. On Tuesday's earnings call, Hilton CEO Chris Nassetta acknowledged the problem directly. Hilton cut loyalty program fees globally by 30 basis points back in January. And now there's a new program called Rise, which gives fee discounts to hotels that score well on guest experience. Together, the cuts amount to somewhere between 75 and 100 basis points of program fees. That is real money for owners operating on thin margins. Now the good news, Neseta says the cycle is finally turning.

2:04Sarah Dandashy: Business travel from small and medium companies, which had been lagging, is now growing at about 7%, outpacing big corporate accounts. Non-luxury hotels that posted negative growth last year swung to 4-6 % growth just this quarter. Hilton raised its full-year RevPar guidance to 3 to 3.5 percent. So the takeaway, after two years of pressure, hotel owners may finally be getting some relief from both Hilton and the market itself. Next up, JetBlue posted a$247 million loss in the second quarter. Six straight years of losses, mounting debt, fueling costs running over$4 a gallon, by almost any measure a tough situation.

2:45Sarah Dandashy: And yet JetBlue's stock jumped 13 percent on Tuesday. Why? Because investors liked what they heard about the plan. CEO Joanna Garrity reaffirmed the airline's turnaround target and said 2027 should mark a return to sustained profitability. The big bet is domestic first class, a product called Blue First, launching later this year. JetBlue says it could add almost five points of revenue per available seat mile. And that is significant. JetBlue is also moving aggressively into Fort Lauderdale, which used to be Spirit's stronghold, adding transcontinental flights and even considering a third lounge there.

3:24Sarah Dandashy: And those LaGuardia slots it picked up from Spirit earlier this month? The plan is to move into the marine air terminal. Lower cost, better economics. The question nobody can fully answer yet, can JetBlue actually execute? It has the blueprint. It has the liquidity,$2.2 billion in cash. But what it needs now is time, lower fuel prices, and for the turnaround to actually show up in the numbers. And finally, here's a travel story you might not have expected. Chinese demand for international travel is growing strongly in 2026. More than three quarters of Chinese travel agents surveyed said bookings were up in the first half of the year.

4:02Sarah Dandashy: Summer travel is up too. But the problem? There aren't enough flights. Japan is the clearest example. It's one of the most popular destinations among Chinese travelers right now, ranked second for 2026 overall. But after a diplomatic dispute just last year, China canceled roughly half of all China-Japan flights. Flights between the two countries are still only at 48 % of pre-pandemic levels. And yet Japan is still the third most popular destination by flight capacity. That tells you how deep the demand runs. Even with half the flights gone, Japan is still beating almost everywhere else. Now, the same pattern shows up with Thailand, the number one destination on the survey, where flight capacity is only at 54 % of 2019 levels.

4:47Sarah Dandashy: And with the U.S., where flights are at just 27 % of pre-pandemic levels, yet agents still rank it fifth for demand. So how does this impact you? Well, if you are in the travel business and wondering where the next wave of high-spending international visitors is coming from, China is the answer. The demand is there. The infrastructure just needs to catch up. Well, that's it for your Skiff Daily Briefing. For more industry news, head to skiff.com and subscribe at skiff.com backslash daily. Thanks so much for listening.

5:27ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands, ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.