The weekly newsletter for everyone interested in barter--the world's most versatile business tool!

February 26, 2002

Airline Adopt Hard Line Business Strategy

Despite a soft market that would normally create a buyers market, the airlines are adopting a new "hard line" focus that's far different than their past actions.

This new attitude is a far cry from the airlines philosophy of a decade ago when they competed fiercely for corporate accounts. The mentality today is to avoid fare wars. Bottomline: the airlines are no longer freely floating excessively attractive corporate deals.

Instead, yield management, rational thinking and careful use of data have supplanted the relationship-oriented approach. In fact, the airlines are canceling many smaller and under-performing accounts, as well.

Barter Could Play Greater Role

On the other side of the coin, corporate clients are retrenching. Fed up with perceived price gouging--business travelers paying top dollar versus the leisure travelers--corporations are opting for other alternatives such as web-conferencing, video-conferencing, and other emerging technologies that can reduce their business trips.

Also, lower-fare carriers like Southwest Airlines have expanded considerably since the last business downturn a decade ago, which provide added pressure on the majors to keep prices in line.

What will all of this mean for the barter industry? New opportunities to work out agreements wherein both the airlines and corporate clients can justify working at their marginal costs, through the barter middlemen.

Vegas Booming Again, But Nationwide Occupancy Down

Occupancy levels at Las Vegas hotels are back to near-normal levels and "business as usual" is predicted for most of 2002 and beyond. The hotels are very aggressive on pricing and the contractual terms for meeting planners are inflexible...it's back to the Las Vegas pre Sept. 11.

However hotel occupancy in the U.S. has declined to 60.3% nationally, 3.4 percentage points fewer than 2000 and the lowest since 1971, according to PricewaterhouseCoopers. It's expected to be a very slow year for hotel development. As a result, the environment is excellent for the barter industry which continues to bring on new clients.

Charity Funding Workshop Scheduled

Barter companies wanting to explore the non-profit possibilities of charity work, can get a much better idea of what's possible by attending a 3-day workshop sponsored by the Foundation Marketing Institute.

All trade currencies are accepted, and 100% payable, for the workshop. Clients can attend as well, with payment done through the exchange. Scheduled for May 16-18 in Bradenton, Florida, more information can be obtained by calling 386-409-7009.

• ITEX Corporation and Martin Kagan have reached a settlement, resolving all claims arising from litigation matters related to the Martin Kagan and IBTEX cases.

  Settlement terms require that all parties named in both cases execute "universal releases" of all claims for any and all known or unknown current or past claims. Kagan will receive a cash settlement and IBTEX will receive trade and media credits allocated under the terms of the original contract.

• Now, more than ever, promoting barter will pay off. Trade exchange owners looking for a proven way to motivate their client base and stimulate more trading activity can obtain a copy of the 16-year-old, proven, informational marketing tool: The Competitive Edge newsletter.

  The Competitive Edge is designed to be mailed or e-mailed to clients and prospects. Now available in PDF (Acrobat) format.

  E-mail bmeyer@barternews.com for a sample copy and details. (Be sure to include your complete mailing address and phone number in your e-mail.)

• Richard Tedlow, a Harvard Business School professor and business historian, believes the dark ethical cloud over business today has occurred only once in the past...in 1929, just before the stock market crash.

  "Enron is more than an accounting failure," he says. "It represents a mentality of greed that we've all been part of."

• For those who like to barter using the "Zander Board" marketing sessions, Spud Barrett is holding 3-day meetings/sessions in Oklahoma City in May, July, September, and November. Call 813-996-3305 for further details.

• The Philippine government is paying off part of its foreign debt with a seaweed extract called carrageenan, and fresh, frozen and canned tuna. It's the first transaction under a renewed government drive to reduce the country's ballooning foreign debt, through countertrade agreements, while at the same time promoting Philippine exports.

  It means that costly foreign exchange reserves are not used up, as the tuna or seaweed exporters will be paid by the government in pesos saving on conversion expenses. Such efforts are concessionary between a lending country and the Philippines, and often come about because of the bigger geopolitical issues involved.

• Barter diplomacy is taking place between the US and Japan. Washington has agreed to assist Japan in its territorial row with Russia, in return for Tokyo pressuring Iran on the issue of missile development.

• The consumer's desire for bargains showed in Wal-Mart's quarterly earnings. But the company suggested that its growth in sales doesn't mean the economy is rebounding yet, as shoppers aren't increasing their average purchases.

  Wal-Mart claims its food sales are fueling the company's growth, because it brings in customers more frequently and bolsters the sale of general merchandise.

• Indonesia is bartering its palm oil to bring in rice from India. Indonesia is also wanting to barter coal to India in exchange for assistance in setting up a 937-mile railway network.

• Guerrilla marketing was alive and well in Salt Lake City during the Olympics. One of the fastest-selling souvenirs was headwear called Earbags. Made of polar fleece, they were designed to snap in place over the ears.

  Without much of an ad budget, the Swedish manufacturer sponsored the Kenyan Ski Team, whose sole contender came in nearly last in his cross country race. The company also recruited a group of three dozen interns from nearby Utah State University to circulate and snap Earbags on Olympic visitors.

  They also gave security police Earbags to wear--so in essence they had walking billboards at many of the venues! Consequently, Earbags were hard to keep in stock.