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Don't Bet on Bargains in 2000
The Travel Critic · December 29, 1999

Will 2000 be the year of the traveler? The industry's talking heads are predicting virtually no price increases and steadily improving service across the board - a veritable passenger nirvana.

But I'm not buying it. While almost anything would be better than a repeat of 1999, which saw a series of broken promises, thoughtless service cutbacks and unparalleled industry greed, I think the worst may be yet to come.

Here's what the experts are saying - and what I think. Be sure to weigh in on our survey on which segment you think is going to behave the worst in the new century.

Conventional wisdom: Hotels will be a steal. At least that's what Bobby Bowers, a vice president at lodging analysts Smith Travel Research, believes. The consultant is looking for overall occupancy rates to stay "flat to slightly down" from 1999. He says the real bargains are going to be found among midscale chains such as Hampton Inn, Comfort Inn and Holiday Inn Express. "There have been a lot of new rooms added during the last year to 18 months, and there's an abundance of supply," he adds.

My prediction: Hotels will be a steal - as in hotels will steal your money. Even though there'll be bargains in the boondocks, the rates you'll get socked with in places like New York and San Francisco will be as high as the skyscrapers. I think hotels are also getting smarter about the way they extract your cash - with additional phone connection charges, laundry fees, discreet room service surcharges - and I don't see that trend abating any time soon.

Conventional wisdom: Rental cars will be reasonably priced. Rates will edge up about 3 percent, says Dean Gianoukos, an analyst at J.P. Morgan. "It's nothing," he says. "I don't think the consumer is going to get taken to the dry cleaners this year." Drivers will continue to pay an average daily rate of about $42 a day - an amount, Gianoukos points out, "for which you can't even rent a tuxedo."

My prediction: Yeah, the cars will be priced reasonably, but that doesn't mean your bill is going to reflect that. Car rental companies are growing revenues by making their computer systems more efficient and by passing various fees and taxes along to travelers. The very same fees they used to cover themselves as a cost of doing business. I wouldn't be shocked if car rental firms came up with still more creative surcharges in 2000. Hey, what are a few percentage points among friends?

Conventional wisdom: This is the year to cruise. "There are more berths available than ever before," says Paul Motter, publisher of the Internet cruise magazine Cruisemates.com. "The cruise lines are on a big campaign to build new ships. The shipyards are backed up by four to five years." Put differently, there's lots of new space on ships, which will translate into lower prices. On average, Motter expects rates to fall 10 to 20 percent from 1999 for people who know where to look. "It may take a while, but prices will come back up," he adds.

My prediction: Don't be fooled. Even though there will be lots of bargains out there, the cost of a cruise doesn't include extras like air, excursions, amenities and drinks. The cruise industry sure looks generous, practically giving away their floating vacations, but you can bet it will make up for it on the other end. The bottom line is, a cruise remains a big-ticket purchase that enriches an industry with a penchant for polluting the oceans, exploiting workers and dodging taxes.

Conventional wisdom: Airlines have reformed. Humbled by the beginning of a downturn in earnings, they're putting passengers "first" and keeping fare increases to a minimum. As load factors taper off and earnings slump, prices are expected to hold steady - maybe rise just a little - in 2000. "Fares will be up 3 percent," predicts Rolfe Shellenberger, an analyst with Runzheimer International. "As a whole, I think the year is going to be a buyer's market."

My prediction: Expecting the incumbent airlines to change their ways is utter folly. The deregulated carriers' modus operandi is "profits first." Whatever fare increases they can get away with, they will. Whatever cutbacks they can get away with, they will. You thought 28 inches of seat room was uncomfortable? Wait until the airlines figure out a way to add standing room to their planes.

So will 2000 be a good year for the traveler or not? Wrong question. It's more an issue of which industry segment will torment customers the most. If you ask me, I think the competition has never been closer.

Christopher Elliott is a travel commentator and author of A Bridge to Nowhere: A Year in the Florida Keys. All e-mailed questions may be edited, condensed or republished at the site's discretion.