Travelers won't stay home despite lots of uncertainty

Chicago Tribune (MCT) - As travel gurus try to forecast what's going to happen in 2009, only one word is clear: uncertainty.

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That's no surprise, given all the "ifs" in the recession- mired economy. If credit starts to flow, if the housing market stabilizes, if the Big Three automakers get their act together, if the stock market transitions from bear to bull ... not to mention the soaring jobless rate. On the bright side, the national average for gas at the pump has fallen below $2 a gallon.

Yes, millions of Americans are going to take vacations next year. They are going to fly, cruise and drive, but I'll guarantee you: Travelers will not be tossing their money around.

"Consumers are responding as we might expect" in troubled times, said Suzanne Cook, research vice president for the Travel Industry Association, which represents all parts of the $740 billion U.S. industry.

But travel should be seen as part of the solution to the economic woes, she said. "There's no doubt that if we can spur travel, we can help turn the economy around." (Note that the leisure and hospitality industry has lost 1.3 million jobs this year.) Cook said her forecast, based on interviews with 2,291 adults in October, shows only a 1.3 percent decline in leisure travel next year from this year. The survey, conducted by TIA and Ypartnership, a marketing firm, said that 7 out of 10 respondents said they intend to take an overnight trip of 50 miles or more in the next six months. Nearly half of those surveyed said they did not plan to change their future travel plans because of the financial turmoil.

"American travelers are trading down but not out," noted Peter Yesawich, Ypartnership chairman.

Among other things, the TIA/Ypartnership survey found:

_76 percent of travelers "expect to book a packaged vacation (air, hotels, meals and sightseeing) to save money."

_58 percent "plan to comparison shop for prices and rates specifically on the Internet."

_67 percent "plan to stay fewer nights" on their vacations.

_67 percent expect to "spend less on food, beverages and entertainment" while traveling.

Of course, a lot has changed since October, so most likely there is more pessimism in the travel market now. It's not only consumers who are concerned about their costs, but that is the concern in every segment of the industry.

Airlines: "We still face an era of uncertainty," said David Castelveter, spokesman for the Air Transport Association, an industry trade group. "We still remain volatile to an increase in jet fuel prices, which have increased 372 percent since 2002. We still face the possibility of pandemics, hurricane seasons and other events that have every opportunity to drive the cost of our business back up. But people are calling for a rollback in fares and fees." U.S. carriers, he said, will lose between $4 billion and $6 billion this year, and there is no estimate of what will happen with fares and fees next year. "What we know is that competition will drive those things." Airlines already have cut back their schedules by 10 percent in anticipation of softer demand.

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Cruises: If cruise-line growth was "modest" this year, it may well be flat in 2009. What will make cruising more attractive, however, is the deep discounts offered by some lines, daily fares as low as $25 and $55 a day on four-day cruises. Another plus: Almost every cruise line has dropped fuel surcharges. Also, 10 new ships are coming on line next year, adding a lot of capacity to fill.

Hotels: Here's where travelers might find good deals.

Smith Travel Research, which tracks the hotel industry, projects that occupancy rates will drop to 59.1 percent, down about 3.5 percent, the lowest level since 2003. The average daily rate (this includes lodging throughout the U.S.) will be $108.52 a day and does not include taxes. "We look for things to get tougher before they get better," said Randy Smith, STR's CEO.

AAA, the country's largest leisure-travel agency, has its own views of what travelers can expect in 2009. As you might expect, all vendors are trying to stimulate sales and cut operating costs. AAA also observed:

_Airlines have cut unprofitable routes. They will continue to put seats on sale when necessary to fill them and continue to charge for checking extra bags and for food.

_Cruise lines are offering deeper discounts earlier, now introducing rates for spring and allowing kids to sail for free. Cruises also fall into the category of one price- covers-almost-everything.

_Hotels are adding more amenities, such as free breakfasts, that could help lower the cost of a trip.

Joe Brancatelli, who produces the business travel Web site www.joesentme.com, predicted dramatic airfare cuts to keep revenue coming in but said travelers will have to act quickly to get those prices. There will be hotel deals everywhere, he added, because "the domestic hotel scene is wildly overbuilt."

Tom Parsons, who runs www.bestfares.com, a discount travel Web site that monitors airfares and the industry, offered these observations and suggestions:

_Watch for airfare deals in the first 60 to 90 days. The legacy airlines will feed off the fare moves by low-cost carriers, but remember baggage and other fees charged by the big airlines. Southwest and several other carriers don't charge for the first checked bag. If you travel light, it doesn't matter who you fly.

_After you've booked reservations for flights, cruises, hotels and car rentals, keep rechecking the prices. If prices drop, you can save money.

_Because airlines cancel flights and change schedules, always double-check your departure times.

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_To spare yourself surprises, ask about any extra fee that airlines, cruise lines, hotels and car-rental firms charge.

If gas prices stay where they are, consider driving rather than flying.

Be a cost-conscious, smart consumer in 2009 and you can still enjoy a vacation.

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Alfred Borcover: aborcover@aol.com

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© 2008, Chicago Tribune.