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Airfare AI Debates, Hotel EV Demand and Southwest’s Baggage Bonanzas

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Good morning from Skift. It’s Friday, July 25. Here’s what you need to know about the business of travel today.

With growing backlash over the use of artificial intelligence to set airfares, American Airlines CEO Robert Isom said the airline wouldn’t use the technology in a way that could erode consumer trust, writes Airlines Reporter Meghna Maharishi. 

Maharishi notes Delta Air Lines has received criticism from lawmakers and consumer advocates after saying it plans to use AI to price up to 20% of domestic airfares by the end of the year.  

The issue is whether different passengers would receive different quotes based on their personal information – and Isom said American wouldn’t do it. 

He also said American was experimenting with AI to improve its operations, including using a tool called “Heat” to help the carrier operate during weather disruptions.  

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Next, electric vehicle charging stations have become Hilton’s top booking driver, writes Climate Reporter Darin Graham.  

Hilton’s Global Head of Sustainability Jean Garris Hand told Skift that travelers searching for EV charging on the company’s booking platform are more likely to complete a reservation than those searching for amenities such as pools and free breakfast. The company has EV charging stations in more than 1,8000 of its hotels worldwide.  

Garris Hand added that demand for EV charging is surging, especially in the UK. 

Finally, Southwest Airlines says it hasn’t experienced any negative impact from introducing baggage fees in May, writes Maharishi.

CEO Bob Jordan said Southwest is checking more bags per passenger than expected, with the carrier projecting baggage fees to contribute more than $350 million in earnings before interest and taxes this year. That figure would’ve approached $1 billion had the baggage fees been in place for all of 2025. 

In addition, Chief Operating Officer Andrew Watterson said Southwest saw no change to its web traffic after introducing the baggage fees in May. 



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Etihad Airways CEO Unpacks Big Bet on Small Jets

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In a region known for flying enormous 777s and double-decker A380s, Etihad’s newest star is a single-aisle jet. The Gulf carrier took delivery of its first Airbus A321LR this week, a long-range variant of a plane more typically used for short economy-focused flights. 

The UAE airline is betting on the new aircraft to supercharge its network growth and broader brand revival. As Etihad CEO Antonoaldo Neves told Skift: “Today we show the world we’re back in the game, and specifically back in the premium game.” 

That game involves an aircraft type already familiar to many travelers. The A321LR, an evolution of Airbus’ best-selling narrowbody, is new-generation, but not exactly groundbreaking.

JetBlue took delivery of its first in 2021, while Aer Lingus, Air Transat, and SAS are among others to use the jet on short transatlantic hops. But it’s the speed and scale at which Etihad is adding the A321LR – along with its distinctive three-class configuration – that is piquing industry interest.

30, Not 20, A321LRs on the Way

Speaking at a media briefing at Airbus’ Finkenwerder factory in Germany, Neves left reporters scrambling for their notes. What was meant to be a tranche of 20 A321LRs became a throng of 30. Asked for clarity on the 50% increase, Neves quipped: “You guys are reading the wrong newspaper.” 

Through a mix of leased aircraft and direct orders, Etihad will now receive 30 A321LRs over the next four years. A steady flow should result in 10 deliveries by the end of 2025, followed by another 10 the next year, then five each in 2027 and 2028. From the airline’s Abu Dhabi hub, the long-range jets will fly as far afield as Paris and Hanoi. Journey tim



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U.S. Hotel Industry Faces Continued Declines Amid Global Growth Trends

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  • STR Weekly Insights: U.S. Hotel Industry Faces Continued Declines Amid Global Growth Trends – Image Credit CoStar   

The U.S. hotel industry experiences a fourth consecutive week of declining revenue per available room (RevPAR), while Japan and Canada show strong growth in the global market.

U.S. Hotel Industry Trends

The U.S. hotel industry reported a continued decline in revenue per available room (RevPAR) for the week ending 19 July 2025, marking the fourth consecutive week of decreases. RevPAR fell by 3.3% year over year, slightly improving from the previous week’s 3.7% drop. The primary contributors to this decline were a 1.8% decrease in room demand and a 0.7% drop in the average daily rate (ADR). Despite a modest 0.8% increase in room supply, weekly occupancy fell by 1.9 percentage points to 71.6%.

The most significant RevPAR declines were observed in major metro markets, with the Top 25 Markets experiencing a 4.3% decrease and other metro markets seeing a 4.7% drop. Las Vegas, Houston, and Los Angeles were the primary drivers of this negative trend. Las Vegas experienced a 17.1% decline in RevPAR, primarily due to reduced international arrivals and the economic impact on lower-income households. Houston experienced a 38.3% drop due to tough comparisons with last year’s demand spikes from Hurricane Beryl and the “Derecho.” Los Angeles faced an 8.9% decline, with the Central Business District experiencing a 17.8% drop amid market tensions.

Impact on Different Market Segments

Excluding the three major markets of Las Vegas, Houston, and Los Angeles, the U.S. RevPAR would have declined by a lesser amount, at 1.9%. ADR, excluding these markets, was down by 0.2%, remaining below the rate of inflation. In the Top 25 Markets, RevPAR was relatively flat at -0.6%, with a 1.0% increase in ADR when excluding these markets.

Metro markets outside the Top 25 saw the largest RevPAR decline, at 4.7%, accompanied by a 2.8% decrease in ADR. Non-metro and rural markets also experienced decreases, primarily due to a 1.0 percentage point drop in occupancy. Since Memorial Day weekend, summer demand has decreased by 1.6 million room nights, or 0.7%, compared to the previous year, with ADR remaining flat at 0.1%. The Luxury segment was the only chain scale to see RevPAR growth, though demand increased in all scales except Economy and Independents.

Global Market Performance

Globally, RevPAR, excluding the U.S., increased for the third consecutive week, with a 0.5% rise driven entirely by ADR. Although occupancy fell by 1.3 percentage points compared to last year, it reached the highest level of the year at 72.2%. Japan maintained its top RevPAR position, with Osaka leading the gains, driven by the EXPO 2025 event. Canada posted the second-highest RevPAR gain, with ten of its 22 markets experiencing double-digit increases. Spain and the U.K. also showed strong performance, driven by significant events and increased travel.

Conversely, France and Germany experienced declines due to shifts in sporting event calendars, while China’s RevPAR fell by 6.7%, with significant declines in Beijing and Guangzhou.

Outlook

The U.S. hotel industry faces a mix of positive and negative signals moving forward. Analysts anticipate nuanced interpretations of performance data due to tough year-over-year comparisons, particularly in September and October, following the impacts of hurricanes Helene and Milton. Sociopolitical factors are also expected to affect short-term demand in select markets. Despite current challenges, American Airlines CEO Robert B. Isom expressed optimism, predicting that July will mark the low point, with performance expected to improve sequentially each month as demand strengthens.

Discover more at STR.



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Here’s How He’s Advising Other Hotel Groups

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Neil Jacobs spent 13 years building Six Senses into a resort brand known for sustainability and wellness. Now, weeks after stepping down as CEO, Jacobs has launched Wild Origins, a new venture that advises hospitality groups and developers on everything from concept creation and brand strategy to design, operations, and execution.

“We can behave as a consultant, offering McKinsey-type advice in our industry, or we can actually do it for people,” Jacobs told Skift.

Wild Origins is currently advising Capella Hotel Group, which plans to increase its hotel openings next year. Jacobs is working with the group on growth strategy and senior leadership planning, including the recruitment of a new CEO.

“You go from opening one hotel every two or three years, to next year they’re g



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