I see two main forces driving the current and future travel marketplace.
· The economy. As long as consumers are tightening their wallets—either voluntarily or out of necessity—the travel industry will suffer along with the rest of the country. If I knew exactly when and how fast the economy would turn around, I´d be making megabucks on Wall Street. Since I don´t—and I´m not—all I can do is glean the best information I can from the news. And to me, that says we´re near or at the bottom, possibly about to start gaining. But we fell a long way, and overall travel business will remain weak for at least a year. Airlines are especially vulnerable, because they depend so much on big-ticket business travelers. Intercontinental lines are really suffering. Companies are cutting back on travel generally, and many that do travel are switching away from premium-priced business-class tickets and joining the rest of us in the cattle car. Even if leisure travel snaps back quickly, lagging business travel means continued schedule and route contractions.
· The Internet. Ubiquitous online price comparisons force all suppliers into keeping list prices at rock bottom lines. Search engines have made it ridiculously easy for every consumer to compare prices from every supplier instantly and effortlessly. No supplier can afford to look more expensive than its direct competitors, and that means they´re extremely reluctant to increase list prices. Instead, they´re turning to extras and fees to make up for what they´d like to add to list prices but can´t. "Optional" fees are being applied to elements that used to be included in base prices. Some are easy to avoid, others not so easy. Mandatory extras are even more pernicious—in fact, they´re scams—but that doesn´t prevent some suppliers from adding them.
Given those factors, I´d say that the outlook for fall and winter travel is fine, provided you control spending on the extras.
· Airlines: You can expect continued fare "sales" with very short advance notice and very short purchase windows, but covering travel over a period of several months. You can also expect more innovative sales such as JetBlue Airway´s recent unlimited-travel monthly pass. And you will be inundated with lots of extra miles promotions—unfortunately, without any corresponding "extra award seat" offers. Because our government won´t let airlines assess mandatory fees, they´re focusing on adding as many optional extra fees as they can devise. Paper tickets, online tickets, seat assignments, popular seats, snacks and beverages, checked baggage—they´re all subject to fees which, on average, will probably increase.
· Hotels: So far, only a few hotels scam their customers by adding such mandatory extras as resort fees and charges for housekeeping, but don´t be surprised to see more of them. Hotel promotions will focus on "value added" extras rather than price cuts; for real price-cutting, many hotels will use Hotwire and Priceline.
· Cruises: List prices on cruises—especially last-minute rates—continue to amaze me. Just over the last few days, I´ve received notices of promotions such as $599 per person for a 14-night Panama Canal trip. Cruise lines are offsetting their low list prices by adding onboard charges to some dining rooms, marking up wine and liquor prices to outrageous levels, and puffing prices on merchandise, shore excursions, and anything else you´re likely to buy through the cruise line.
Budget-minded travelers who can pick their promotional targets and stay away from the extras will continue to find outstanding deals through the fall and winter. As usual, flexibility is the key.
Forecasting fall and winter travel prices