HOTAC / Crew Accommodation
The airline industry and hotel industry are interdependent as air travel necessitates both transportation and lodging. Airlines commonly refer to crew accommodation as HOTAC, which is a vital partnership to ensure crew rest and flight operations. Insufficient or unreliable accommodation poses a significant risk of crew fatigue and operational disruption (flight delays or cancellations), resulting in substantial costs for airlines.
As an airline, it is important to establish strong relationships with hotels and HOTAC providers to ensure that crews have a safe and comfortable place to stay during their layovers. This includes finding accommodations in close proximity to the airport, negotiating favorable rates, and ensuring that the hotels meet certain standards and criteria for crew accommodation.
In addition to the financial costs of flight delays and cancellations, there is also a reputational cost for airlines if crews are not adequately accommodated. This can lead to dissatisfaction among crew members and impact employee retention rates. Therefore, investing in reliable HOTAC arrangements is not only important for operational efficiency but also for maintaining a positive reputation and employee satisfaction.
Airlines and hotels come into cooperation agreements to ensure a standard number of available rooms periodically.
The aircrew business supports long-term, forecasted base business, and assures cash flow for hotels while allowing them to better yield on remaining inventory. It also leads to additional sources of year-round airline-related business, including cargo, corporate, distressed passengers, group business, leisure, and meeting and events business. Aircrew business can also result in additional incremental revenue through onside food and beverage outlets. In summary, the cooperation between airlines and hotels is essential for the success of both industries.
HOTAC Contracts
Aircrew contracts are typically “requirements” contracts for the housing of pilots and cabin crew during scheduled layovers. These contracts vary per airline, location, and schedule and are typically for 7 nights a week, 52 weeks a year, sometimes over several years. The airline’s HOTAC team is responsible for contracting hotel rooms for crew members and staff. This task involves many stakeholders.
Crew accommodation is a crucial part of the airline industry, but the process of sourcing it can be extremely time-consuming and manual. Due to highly sensitive regulations, airlines need to ensure that the accommodation meets specific standards and requirements. It takes about 9 months from the launch of a new route to the arrival of the first crew, and during this time, a lot of paperwork and standardized questions need to be completed to find suitable accommodation.
Unions play a significant role in many aircrew solicitations, and airlines need to meet basic expectations in hosting a crew. Unions represent their members to ensure fair working conditions. However, airlines also consider budget and value additions, which can open opportunities for all brands, from three to five-star products, from airport to city center locations, including suburbs.
Airlines work to convert opportunities into the best-qualified properties that meet their specific needs, such as price, location, onsite facilities, Wi-Fi availability, food and beverage discounts, fitness center access, blackout curtains, and room blocks on higher floors and away from the elevator. Also, hotels must be able to accommodate non-standard check-in/check-out times and/or day use of rooms necessitated by the crews’ scheduled pairings. Hotels must meet standard rulings for hosting airline crew, such as providing a safe, secure, and quiet hotel that allows crew members to have legal rest. The industry standard in most countries and unions mandates a minimum of 10 hours of crew rest, including a minimum of eight hours of uninterrupted sleep.
Short Layovers
Short layovers require properties within close proximity to the airport, usually within a 10-minute driving distance, to ensure maximum crew rest time. Any delay that crew members face, such as traffic delays or hotel check-in delays, can impact the minimum 10 hours of mandated rest period. Some properties provide airport shuttle transportation, while others may opt to purchase an airport shuttle.
Long Layovers
Long layovers may require accommodation in a downtown or downtown-like location, where crew members can find leisure activities, retail outlets, and dining options within walking distance. Downtown locations are sourced in known safe areas to ensure crew safety. Ground transportation is typically contracted by the airline via local or national transportation companies.
Third-Party vs Direct
Some airlines work with third-party providers to procure and manage hotel contracts. Other airlines prefer to directly manage hotel contracts in order to have direct communication and avoid paying commission to a third party.
Terms Between Airlines and Hotels
| Term | Definition |
|---|---|
| Daily Manifests | A document listing the crew by name of an aircraft, provided in advance of aircrew travel |
| Distressed Passenger | The industry name for airline customers who are stranded in an airport overnight, waiting in customer service queues, or having to be accommodated at surrounding hotels at their own cost |
| Force Majeure Event | An event outside of the carrier’s control that can alter a carrier’s schedule, resulting in flight delays, schedule changes, and flight cancellations |
| IROPS (Irregular Operations) | When regular operations turn into irregular operations, airlines and airports must communicate, share responsibility and work together to create a plan that offers real solutions to aircrew and passengers, including providing reasonable accommodation at the airline’s cost |
| Intermediaries | Also referred to as third-party handlers, intermediaries are companies that manage a range of services for their contracted airline clients, including aircraft sourcing with partial or total management solutions, distressed passenger operations, IROPS, corporate leisure and group business, all at commission |
Challenges
Contracting hotel rooms for thousands of flight crews and other staff is a complex task. The rigid conditions and low conversion chance make it difficult for hotels to contract with airlines. However, hotel room occupancy by airlines during the off season can contribute to hotel key performance indicators. Hence, hotels sign contracts with airlines in cooperation agreements to retain this market segment in their customer portfolio.
Additionally, managing ad hoc changes to HOTAC needs during day of operations provides unique challenges. Closer-in changes made by Crew Control may require unplanned hotel and transportation at a higher cost and/or limited availability. Inability to find suitable accommodations during irregular operations can cause further flight disruptions.