Travel&Vacation

My crystal ball isn’t working very well these days—it may have something to do with the switch from analog to digital TV. Nevertheless, I see some trends in the marketplace that may help some of you decide when, where, and even whether to take a fall trip.

The lack of demand says fares and rates will drop. Today’s horrible economy already seems to be having an adverse effect on total travel. Airlines’ radical cutbacks on flights probably aren’t enough to offset the impacts of falling demand. Oddly, leisure travelers are somewhat at the mercy of business travelers in this regard: The big airlines depend on “high value” business travelers to support their networks, and if business travel drops, airlines will have to keep cutting capacity, even if low-fare traffic is still available. The airlines that seem to be weathering the storm best are those low-fare lines—notably Allegiant and Southwest—that have heavily catered to leisure travelers. Hotels, of course, can’t cut back on capacity; at best, they can try rate cuts and creative promotions.

Costs say fares and rates will stay high. To be sure, oil prices have dropped dramatically over the last month, but other cost pressures remain in the upward direction. And there’s no guarantee that oil prices won’t climb again—certainly, OPEC would like to see that.

Price breaks are coming. Over the last few weeks, I’ve received dozens of emails touting big reductions and “savings.” But price breaks will be uneven.

Airfare reductions may be dramatic, but they usually have a short purchase window and a short window of time when you can fly. Nonpromotional fares remain high. I checked a recent Lufthansa promotion, for example: Round-trip fares from the East Coast to Europe, all up, started at around $700, with tight purchase deadlines and limited travel days through December. On other days, fares were about three times the “sale” fares. Several domestic airlines have posted similarly short-term reductions. I haven’t seen any big business-class promotions yet, but given the lousy business conditions, I wouldn’t be surprised to see some—typically with very tight restrictions.

Hotel promotions tend to be concentrated in the mid- and upper-mid price segments, and you can expect more of the same. That’s not surprising. Budget hotels don’t have enough wiggle room to cut prices to a meaningful degree, and deluxe properties will continue to attract travelers rich enough that the current economic woes don’t affect them.

Cruise promotions and reductions emphasize last-minute deals. I recently checked out transatlantic repositioning cruises. Some rates were as low as $50 per person per day and lots were under $100 for several remaining sailings through November, while rates for next spring were about double the price. Tour promotions seem to be following the same pattern.

Leisure destinations are hurting. Airlines have been disproportionately cutting back on seats to such low-fare destinations as Las Vegas and Hawaii, and hoteliers in these and similar areas are reported to be reacting to tough times by cutting prices.

Opaque sites Hotwire and Priceline will probably get more inventory. Rather than openly cut all advertised prices, airlines and hotels will try to unload their off-price capacity through channels that don’t identify them openly.

For the same reason, you’ll find better prices on air-hotel packages from such mega-agencies as Expedia, Orbitz, and Travelocity than on individual airfares or hotel rates—or through your regular travel agent.

These circumstances suggest an obvious strategy for trip planning: Follow developments closely, and buy when—and only when—you see a good deal. If you don’t see any promotions yet for next spring, wait until after the first of the year. And don’t count on senior discounts. Short-term promotions for travelers of any age will be much better.

(Editor’s Note: SmarterTravel.com is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns Expedia.com and Hotwire.)