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November 30, 2008

Not only in the U.S.

In planning my travel for this summer, I have been doing a great deal of research on how travel differs internationally, and comparing it to what I am used to domestically. As prices rise for travel at home, it is interesting to look at the international effects. Travel throughout the UK has also become more expensive with rising costs, and the government has begun to impose many new taxes on travel. On the contrary, in the U.S., it is not the government that has begun to charge the consumers fees, but rather the travel industry itself. Many airlines have begun to add baggage fees, seat selection fees, and random minuscule surcharges, which end up increasing the travel costs by a great deal. However, it is estimated that travel costs for the beginning of 2009 will not increase, but rather level out, and consumers have learned how to combat these costs by traveling lighter, and being more flexible with their options. Luckily, I do not plan on going to the UK this summer, where road fees, and other green taxes have started to take form. But with taxes such as this arising, it makes me concerned about what will happen to other countries in the near future. All around the world, people have begun to combat the rising travel costs by booking their vacations during weekdays when they are in resort-areas, and on weekends when they are in destinations that cater mostly to businesses. In the upcoming summer, I will probably have to do the same, and my goal will be to travel throughout South America.

Hopefully their travel industry has not been facing the same problems as the industries in the UK and the US have been. Only time will tell--but based on the current global trends, it seems that my summer plans may be altering.

Posted by amkruger at 06:22 PM

November 20, 2008

Contrary to Popular Belief

Although over the past couple of months, it was estimated that with our economy's current downfall, that a large decline in travel was soon to occur, this will no longer happen. Americans are doing whatever they can to insure that they spend time with their loved ones during the holiday season. I personally will be flying to New York, since the trip is much more affordable than going back to California. I will be spending time with family, but not my immediate family, but with a price difference of almost $500, the price clearly outweighs the trip back home. Still, like most Americans, I will not be spending the holiday season alone. There are many ways that Americans are taking action to make sure that they are still able to travel. One of these ways is to go through agents and buy last minute tickets. If there is an empty seat on the flight, the plane will still obviously fly, so in last-minute scenarios, airfare prices are going down. However, although fuel prices have declined, the average airfare price has risen 8%.

Many people have turned to all inclusive vacations, cruises, and other means of travel to avoid having to pay for the everyday costs that are incurred on vacation. Some companies have realized this change in demand, and have begun to cater to a different type of consumer. My family is one of these families, so for the holiday season, although travel is expensive, we have employed the same all-inclusive cost cutting strategies that will hopefully pay off in the end. As for the summer, studies still show that it is less expensive to buy flights far in advance, so the earlier I can plan to travel abroad, the better chance I will have of being able to afford it.

Posted by amkruger at 05:32 PM

November 15, 2008

Combating the Economy

As the economy worsens, more and more Americans are finding out that their travel plans may not be as feasible as they had planned. Seeing that the demand for travel has declines this year, many airlines are having trouble meeting their costs. However, as the economy worsens, many travelers who stubbornly cling to their holiday vacations have begun to use other means to turn their vacation dreams into realities. American Express, one of the most widely used credit cards for travel rewards, has seen these effects come into play. Credit card travel agents from their company report almost 87% of their vacations are being used with more reward points/miles, compared to a value of 70% from last year. Personally, I have begun to budget my miles in hopes of traveling abroad this summer, and my family personally, in hopes of still traveling over break, have used our miles to pay for our upcoming vacations. In addition to using reward points, many consumers have begun to focus on traveling closer to home, and vacations to locations such as Florida have risen in popularity, as the more expensive locations such as Hawaii, have seen declines. But with our falling economy, a key factor has been the drop in oil prices.

Many airlines, although being forced to work with a very unstable market have begun to realize the decline in oil prices, and some airlines are trying to see how they can use the money saved on current flight costs to reinvest in the airlines themselves which may pay off if prices rise again. I plan on still traveling abroad this summer, and selfishly, I hope that the economy does a comeback slow enough that it does not increase the price of my summer travel.

Posted by amkruger at 05:16 PM

November 11, 2008

Travel Reduction

The holiday season is the time of the year with the greatest revenues. Throughout Thanksgiving and Christmas time, stores sell the most goods, hotels generate the greatest revenues, and the most flights are sold. This year however, the economy is in a recession. People are pinching their pennies at every turn, and flights sales are greatly down. In order to combat this decrease in demand airlines are taking action. This year alone, it is estimated that airlines will reduce the amount of flights flown per day by 2500-3000 flights daily. This is the estimate for U.S. carriers alone. Although revenues will still be greater than those throughout the rest of the year, this reduction is still quite dramatic. Airlines are battling with the economy just as are the consumers, and to remain in business, they must cater to the decrease in demand. But with such a large reduction in flights, will prices remain the same, or will quantities simply fall to keep prices from dropping? The impact of the economic standstill is not only affecting U.S. carriers. Worldwide other airlines are faced with the same dilemma. China Eastern

, the 3rd largest carrier in China, is battling bankruptcy due to the change in the economic status of the average consumer. The company is cutting flights by 10% this season just to stay in business. Traveling is becoming more relatively expensive as people has less disposable income, but as companies are faced with a decrease in demand perhaps prices will have to fall to keep the consumers coming.

Posted by amkruger at 09:41 AM