Will the summer of 2009 go in like a lion and and out like a lamb?
After a promising start to the travel season, AAA this morning said it expects Labor Day travel activity to drop by 13 percent compared with last year.
Separately, a new forecast by Bing Travel predicts holiday airfares will drop precipitously.
This year, airfare for Thanksgiving travel to domestic destinations averages $327, down 22 percent from 2008 and virtually on par with 2007 fares. Christmas and New Year’s holiday airfare to domestic destinations averages $353, down 17 percent from this point in 2008, but still about 8 percent above 2007 fares.
The outlook for hotels is equally bad — or, if you’re a guest, good.
Throughout September, October and November, premium domestic hotel rates are down 13 percent from their 2008 prices, averaging about $186 per night. This trend holds true for all major U.S. cities except one: Honolulu. Premium hotel rates in Honolulu are averaging about $166 per night, about 5 percent higher than at this time last year.
According to the Bing Travel Rate Indicator, premium hotels in New York are down as much as 30 percent, and rates in Chicago and Las Vegas are down as much as 21 percent and 19 percent, respectively. San Francisco, Atlanta, New Orleans and Orlando, Fla., also have deeply discounted hotel rates throughout the fall.
For a little insight into what’s happening, let’s turn to AAA.
As was true for households grappling with travel decisions earlier in the summer, there is a mixed bag of economic considerations to weigh. Continued job losses and weakened household incomes continue to dampen enthusiasm for travel, but are offset by lower travel prices and somewhat improved consumer confidence.
Factors moderating the decline in travel include airline fares, which are likely to be 12 percent below last year’s levels, and gasoline prices, which remain about 25-30 percent below last year’s levels.
It’s not all bad news, though.
It is not only economic conditions that affect Americans’ decision to travel, the decision to travel can be influenced by much more enduring reasons, such as on what day of the week or month the holiday falls and whether the holiday is “early” or “late”.
Last year, Labor Day fell on September 1, allowing many families to schedule long vacations before their children returned to school. Gasoline prices also began falling in mid-July last year after reaching an all-time record high of $4.11 per gallon. This, combined with the earliness of the holiday and the emergence of end-of-summer travel discounts, caused large numbers of Americans who may not have vacationed earlier in the summer to make a last-minute decision to travel. As a result, Labor Day weekend travel was unusually strong, increasing 26 percent to 45.1 million travelers in 2008.
With Labor Day falling almost a full week later in 2009, many children will have returned to school, holding down Labor Day holiday travel.
Bottom line? This is going to be a very interesting fall.
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Wow, I’m no statistics expert, but that graph matches the editorial hardly at all.
Here’s an alternative commentary:
The recession hasn’t dented holiday travel plans; in fact, Labor Day passenger numbers for 2009 are predicted to be higher than in seven out of the past nine years: better only than 2003 and 2008. Huzzah!