Gas at $1.65 per gallon. Cruises for $50 a day (or less). And hotels that are throwing in everything from complimentary breakfast to discount massages. Will 2009 turn out to be the best travel year ever — or will the miserable economy have us all hiding beneath our beds with what little money we managed to get under the mattress before it all went to hell?
Beats me, although after talking to industry analysts and other observers, I’m taking my cues from those economists who see a possible recovery starting by the middle of the year. If that’s the case, a rebound in consumer confidence — and, by extension, people’s willingness to travel — is bound to follow.
In the meantime, those who do travel will find both bargains and bumps along the way. If you’re among them, the following will likely determine whether you experience more of the former or the latter.
Air travel: more cuts to come
Originally conceived to counter summer’s stratospheric oil prices, the schedule reductions of 2008 were expected to be sufficient — that is, until the economy went south and the plunge in demand outstripped the cuts in capacity.
So deeper cuts are on the way. Delta, United and Southwest have already announced additional cuts of five to 10 percent for 2009, and other airlines will likely follow suit. “There’s another eight or nine percent that they can pull out of the system pretty easily,” says Mike Boyd of Boyd Group International, “and they’ll cut capacity before they’ll cut fares.”
More alliances than mergers
With the integration of Delta and Northwest under way — look for similar cabin amenities and policies by spring — it’s logical to assume more mergers are in the offing. Not necessarily, says Vaughn Cordle, CEO and chief analyst for AirlineForecasts LLC, who expects to see more alliances (à la United-Continental) than mergers: “Alliances are tightening their partnerships — combining IT, sharing counter space, having all members in the same wing of an airport.” The goal: an expanded reach without the labor strife and regulatory hassles that come with full-blown mergers.
Fares: spot sales, not fare wars
Between this year’s capacity cuts and the plunge in oil prices, many analysts expect U.S. airlines to eke out a small profit next year, although few expect them to share the wealth with across-the-board fare cuts. Look instead for spot sales — especially during the slow winter season — and fares that edge up after that, says Boyd, as shrinking capacity catches up with dwindling demand. “The public’s finger is on the trigger of the spending gun,” he says. “We just don’t know if they’re going to pull it or not.”
A better flying experience
The continuing shrinkage of the national route map is saddening on many levels, but a smaller air-traffic system is not without its benefits. Given the existing infrastructure — and the government’s limited commitment to improving it — the system has simply gotten too big not to fail on a regular basis.
Fewer planes carrying fewer passengers, on the other hand, should lead to smoother operations throughout the system. Lines at security will be shorter, fewer bags will be lost and decent on-time performance should be the rule rather than the exception it’s been for the last few years.
On the road again
“Americans are going to resume their normal traveling habits in 2009,” says Doug Hecox, spokesman for the Federal Highway Administration (FHWA). “We just don’t know when.” Furthermore, he suggests, the size and timing of that shift probably has less to do with the price of gas than the underlying economic situation.
In a nutshell, Hecox believes we’ll adapt. “The longer the economy remains murky, the more people figure out ways to deal with it,” he says. “People start to justify little luxuries — not Godiva chocolates or trips to Paris, but maybe an overnighter or long weekend away.”
Hitting the high seas
Or, believe it not, a cruise. With advance bookings for 2009 sailings down, cruise lines are offering discounts of up to 75 percent. Among the bargains: 3-night cruises to the Bahamas for $169 per person, 4-night Baja cruises for $249 and 7-night Caribbean cruises for $349. At the same time, the industry is sweetening the pot on higher-priced cruises with onboard spending credits, airfare deals and other enticements. And with eight new ships arriving this year, look for more discount offers on older ships and non-marquee itineraries.
Hot hotel deals
After years of building like there’s no tomorrow, the lodging industry will also face a huge hangover in 2009 as hotels currently under construction open just as demand is dwindling. The result? Lots of beds, not enough bodies and good deals for those who ask for them.
“Ask what the rate is, then ask if there’s any sort of package or other way to get a lower rate. It can make a substantial difference,” says Bjorn Hanson, associate professor at the Tisch Center at New York University. “Asking for discounts shouldn’t be embarrassing — it’s not as if you’re asking the reservationist for a date.”