The flights this holiday season will be less frequent and more crowded. Airfares likely will be higher. And waiting for oil prices to drop so your trip’s cost matches your holiday travel budget is no strategy at all, travel experts say.
As the holiday and winter-getaway season approaches, many of the best airline seats are taken, and industry insiders don’t expect more to be added. For snowbirds trying to plot some late-winter relief from cabin fever, the airline industry’s tectonic shift toward higher fares and fees and fewer seats means this year’s travel calendar is changing.
Watchword to the faithful traveler: Plan early and book early — as in: now.
Consider Cancun, Mexico, a popular winter market for people departing Minneapolis-St. Paul.
“Between Northwest and Sun Country (airlines), there were four to six flights a day to Cancun,” said Gerard Bellino, U.S. Leisure vice president at Navigant Vacations, a travel firm owned by Carlson Wagonlit. “Now there are two. We’re dealing with a significant tightening of the belt.”
While additional flights might be added on that route, Bellino said, that isn’t happening yet. Speaking generally of the broader holiday season, “80 percent of the space is already gone.”
Rarely has the holiday travel market changed more over a single year. Last year, before the run-up in oil prices and jet fuel costs, and before the economy’s foundation was in question, airlines were discounting a large number of seats, hoping to attract business. Not this time. While worries about the broader economy may keep some travelers away from the airport this season, don’t expect huge fare sales or a reduction in all those new fees airlines imposed this summer.
“When you look at how in the red the airlines are, if those fees are increasing revenue, they’ll take it,” said Gabe Saglie, senior editor at Travel Zoo, an online travel site. As for fares coming down, “I don’t think it’ll be until after the holidays … because the next opportunity for these airlines to get some of their revenue back will be the upcoming holiday season.”
‘LIKE PLAYING THE STOCK MARKET’
Barb deBorhegyi and her Minneapolis family of four typically head down Mexico way around Christmas to visit family. This year, they’re going to Guatemala. Usually, they start looking for tickets in September. But with the spikes in ticket prices this summer, deBorhegyi hopped online early.
“The prices were just crazy,” deBorhegyi said. She monitored several travel Web sites, looking for the best airfare.
“At one point, it was $1,000 a ticket. And then the next day, it would drop down to $650. It was all over the place,” she said. Within a few days, she booked the tickets for $850 each at American Airlines’ Web site.
“It was like playing the stock market; there was a lot of volatility.”
Bellino and other travel experts agree — if you have dates in mind now and know where you want to travel this winter, then it’s probably best not to wait.
With the economic slowdown, troubles on Wall Street and skyrocketing airline ticket prices, consumers might have thought fewer people would be traveling, opening up a chance for finding decent fares. But people intent on going home for the holidays will travel “regardless of what the economy is like,” Bellino said, and many booked their seats six to seven months ago.
Bookings actually have remained steady even as airlines have cut capacity to move closer to profitability, meaning planes are filling faster. Eagan-based Northwest Airlines, for example, will cut as much as 9.5 percent of systemwide capacity this quarter, compared with last year. The nation’s other carriers, including low-cost competitors, have made similar cuts.
The effect of all that flight trimming — and its effect on airfares — varies from market to market. But few are seeing declines.
Airfare research by Harrell Associates recently found year-over-year increases of 26 percent in Philadelphia, 17 percent in MinneapolisSt. Paul and 15 percent in Newark, N.J., which serves the New York City market. Overall nationally, leisure fares were up 11 percent, and business fares were up 6 percent. On the flip side, the research found that fares in San Antonio were down 12 percent this summer compared with last year.
A HEALTHIER INDUSTRY
In the Twin Cities, with Champion Air shutting down earlier this year, there are no charter flights to Las Vegas, “which is unusual for this market,” said Sheree Powers, owner of Travel By Nelson, a Woodbury travel agency. “We all kind of thought they’d bring in another airline and call it a charter.”
One result of the tighter market is that package deals may start to look better to consumers, travel agents say.
“People like being in control, digging up their own hotel,” Saglie, the online travel editor, said. But the package deal may be the best buy this season. Resorts and hotels are responding to current travel economics. “Even if airfare goes up a little,” Saglie said, “the pricing on resorts in Mexico is so aggressive, the (overall) price will still be pretty good.”
Northwest Airlines’ World Vacations, for example, recently had a package from the Twin Cities for five nights in Waikiki, Hawaii, for less than $900, including airfare and hotel, Saglie said. Hotels in Hawaii did well early in the summer but then saw tourism drop off, he said. So now, reduced room rates there are more plentiful.
“People are going to think before they fly now. I think that’s the difference,” said Kenneth Button, director of George Mason University’s Center for Transportation Policy. Yet he doesn’t see a rerun of the 1970s and the days before airline deregulation, when only the relatively well-to-do flew with any frequency.
The greater attention to airfares “will apply to business travelers as much as it does to individuals,” Button said. And in the end, it will lead to a healthier airline industry, he believes. For too many years, airlines have been operating at a loss, “and you can’t survive like that.”
What consumers are seeing now is a balancing of supply and demand — one that should have happened years ago, he said.