Travel Trends for the New Year

LCT Staff
Posted on December 31, 2008

WASHINGTON, D. C. – The value of the U.S. dollar is surging, gas prices are at their lowest levels in four years, and hotel rates are softening. If you can afford a vacation, 2009 will be "the year of travel deals," predicts Genevieve Shaw Brown, senior editor of Travelocity.

"As long as the economic slowdown continues, deals will abound for people who do have discretionary income to travel," she says.

Pauline Frommer, the guidebook writer, agrees.

"Because of the sharp drop-off in bookings, we're seeing some pretty deep discounts to just about everywhere," she says, citing as an example Walt Disney World's offer of seven nights for the price of four. "It's definitely going to be a buyers' market next year."

Even though travel is becoming more affordable, more people are expected to stay home as a result of the recession. The Travel Industry Association predicts a 1.3% drop in 2009 leisure travel.

Here are some details on these and other trends, such as increased interest in presidential sightseeing, thanks to events such as the Lincoln Bicentennial and the Jan. 20 inauguration of Barack Obama.

TRAVEL ABROAD AND THE DOLLAR: In April, it cost $1.60 to buy a euro. As of mid-December, a euro cost just $1.36, meaning your dollar goes nearly 20% further now.

Travel to Europe by Americans was down 4.8% in the first eight months of 2008 compared with the same period in 2007, according to the U.S. Bureau of Transportation Statistics. Now, "prices are coming way down and 2009 may be the year to plan your European trip," says Anne Banas, executive editor of SmarterTravel.com. She cites "two big reasons: the slow economy and the fact that the dollar is gaining on the euro."

The dollar is doing even better elsewhere. An Australian dollar costs just 67 cents in U.S. currency, down from nearly $1 this past summer, and Canadian dollars are worth just 80 (U.S.) cents now. Earlier this year, the Canadian dollar was worth more than a U.S. dollar. The guidebook publisher Lonely Planet put Iceland on its top 10 destination list for 2009, citing great deals in a country where local currency and the national economy have collapsed.

CARS, TRAINS AND BUSES: Feel like a road trip? Go for it. Gas hasn't been this cheap in four years. A gallon of gas averaged $1.65 in mid-December, down from an all-time high of more than $4 a gallon in July.

Between November 2007 and October, Americans drove 100 billion fewer miles than the same period a year earlier, according to the Federal Highway Administration. Amtrak set a record for train ridership in its 2008 fiscal year of 28.7 million passengers, an 11% rise over the previous year.

Bus ridership also surged, with intercity bus departures rising nearly 10%, according to research from DePaul University's Chaddick Institute for Metropolitan Development. The study cited "large declines" in air and car travel and "the growing acceptance of bus travel among younger travelers and pleasure-oriented travelers." Bus options have grown beyond Greyhound to cheap Chinatown-to-Chinatown buses and trendy BoltBus, known for onboard wireless Internet service and online deals.

AIR: Don't expect lower fuel prices to lower domestic airfares. Richard Seaney, CEO of FareCompare.com, predicts "stable high prices for domestic airfares. We had 30 airfare hikes between the summer of '07 and '08, which raised the price point 20% to 40%. I think that price point will stay stable in 2009."

The trend toward fewer flights may continue, too. The Air Transport Association of America's outlook for 2009 noted that seating capacity has fallen between 10% and 12% nationally the past year, with a 25% to 50% decrease at many of the nation's top 100 airports.

"All signs suggest that the schedule cuts prompted by high fuel prices in 2008 will deepen in 2009," ATA chief economist John Heimlich says.

Travelocity's Brown says consumers are choosing destinations based on airfare. For example, with fares to Honolulu up 18%, the city has fallen off Travelocity's top 10 spring break bookings.

With fewer flights and passengers, the Bureau of Transportation Statistics reports that on-time arrival rates are up, but flight cancellations, passenger complaints and lost baggage are down.

The good news: FareCompare's Seaney says "international travel is going to have the best deals in the last three to four years" because of decreases in fuel surcharges and some new start-up routes with introductory prices. For a peak summer trip to Europe, March is typically the best time to buy tickets, he says, but pricing may be volatile, so sign up for fare alerts.

LODGING: Travelocity's Brown encourages savvy travelers to look beyond airfares "to see what they can get out of their hotel stay, whether discounted room rates or value-added promotions, which are everywhere – free nights, free breakfast, free room upgrade. In Vegas, it's gambling credits and spa credits."

Demand for hotel rooms in the first quarter of 2009 is expected to be down 1% to 2%, and supply will be up about 3%, with new properties opening that were planned before the recession, according to Smith Travel Research, which tracks the industry.

"A drop in occupancy is certain, and with that we can already estimate that rates will soften somewhat," says Smith Travel spokesman Jan Freitag.

Frommer adds that more folks are staying in hostels, which are cheaper than hotels, and the number of hostels is increasing.

"People are throwing up hostels everywhere, converting old hotels, even taking what are just ordinary homes and adding bunk beds to create unlicensed hostels," she says.

ANNIVERSARIES AND PRESIDENTIAL SIGHTSEEING: Anniversaries often bring out the best in a destination with exhibits, festivals and deals. Here are some big anniversaries in 2009.

•The bicentennial of Abraham Lincoln's birth will be celebrated in Washington and many states with exhibits, events, heritage trails and performances. The interest in Lincoln coincides with a surge in interest in President Franklin Roosevelt's Depression-era New Deal and sites associated with President-elect Barack Obama, from places where he lived such as Chicago and Hawaii, to Washington, where record crowds are expected for the Jan. 20 inauguration.

All this has led the ad agency JWT to declare "presidential sightseeing" a top travel trend for 2009. One event to look for: A re-creation of Marian Anderson's 1939 concert at the Lincoln Memorial will be held on Easter.

•The Indianapolis Motor Speedway was established in 1909 and kicks off a three-year centennial celebration in 2009, marking the 100th anniversary of the facility and the 100th anniversary of the Indy 500 in 2011.

•Baltimore, Philadelphia and Richmond, Va., mark the 200th anniversary of poet Edgar Allan Poe's birth, with many events taking place in January.

TOP TRAVEL TRENDS FOR 2009: Predictions from ad agency JWT (formerly J. Walter Thompson): Besides presidential sightseeing (Obama's Chicago, Washington for the inauguration, Lincoln bicentennial); inconspicuous travel, where tourists try to blend in; unconventional lodging, like home swaps or staying in a monastery; pod hotels, which offer tiny and cheap but high-tech, stylish rooms; personalized travel guides, like the customized books offered by OffbeatGuides.com; irresistible deals, like Disney's free admission on your birthday offer; and "glamping," or glamorous camping, where a tour company provides comfy bedding and nice meals so you don't have to rough it while experiencing remote or wild places.

Source: Associated Press

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