Experts: Travel prices to rise in 2010


This was the year for travel bargains, if you could afford to hit the road.

Three-star hotel rooms for less than a nice dinner for two. Cruise fares as low as $25 a night for a Bahamas trip from Florida. Lots of cheap airline tickets if you steered clear of peak travel times.

For 2010, travel experts predict prices will rise modestly as the economy slowly mends. Airlines and rental car companies that cut inventory to match declining demand will be best positioned to push through price increases.

Here’s a rundown on what consumers face for the coming year.

Airlines: Airline executives say ticket sales have been up from 2008 for the last half of this year. The three biggest carriers — Delta, American and United — even report an uptick in demand for business and premium tickets.

Major airlines tacked on surcharges for flying in the busy holiday season. With most flying fewer and smaller planes, carriers could raise fares if demand keeps improving. Not everyone in the industry agrees with that outlook.

Southwest chief executive Gary Kelly told analysts this month he doesn’t see business travel improving or much economic growth in 2010. Even if ticket sales improve, “better than 2009 is not saying a whole lot,” wrote John Heimlich, chief economist for the industry’s trade group.

Hotels: Lodging suffered through a historically bad year as business travel tanked. Average room rates tumbled nearly 9 percent nationally from 2008. Occupancy fell to 55.2 percent from a peak of 63.3 percent in 2006.

The bleeding will continue into 2010 but at a slower pace. Average room rates will drop 1.8 percent, with occupancy edging up to 55.8 percent, according to a Price­WaterhouseCoopers forecast. So, consumers should continue to find plenty of cheap hotel rooms.

Car Rentals: Major companies slashed their fleets by buying fewer new vehicles and selling into the used-car market. As a result, published rates jumped an average of 15 percent to 18 percent this year from 2008.

Expect rates to keep rising in the single-digit range in 2010, said Neil Abrams of Abrams Consulting Group in Purchase, N.Y. Watch out for spot shortages of vehicles during busy periods, such as Florida from January through April.

Avis is taking a serious look at the industry’s first “no show” fee for reserving a vehicle you don’t use, Abrams said. Enterprise rejected the idea, he said, but others could follow if someone else takes the leap first.

Cruises: Facing the recession and a parade of new ships arriving, cruise lines offered up great deals to fill cabins in 2009. Prices for Alaska and Mexico were the lowest in recent memory, according to the cruise review Web site Cruise Critic. Luxury lines offered free airfare and two-for-one deals.

Cruise Critic says cruise lines are feeling better about bookings for 2010. Record-low, peak-season fares will likely disappear. But you should still be able to scoop up cruise deals for last-minute bookings and trips in the “shoulder seasons” between spring and summer and during fall.