Americans to Pay Extra Money for Holidays as Demand Soars

Americans are venturing out again as they start to shake off the recession. That may be good for their spirits, but it’s bad for their bank accounts. As more people travel, flights, cruises and hotel rooms get more expensive. Expect to pay more for your vacation this year, industry experts say.

“Travelers won’t be as much in the driver’s seat in 2011 as they were this year,” said Bruce Baltin, Los Angeles-based senior vice-president of Colliers PKF Consulting USA, a hospitality consulting firm.

You’ll probably pay more for foreign flights in 2011 than in 2010, and about the same for domestic flights, said Rick Seaney, chief executive of the travel website FairCompare.com. After international fares slumped in the summer of 2009, airlines battled back.

They kept their route networks trim, even after demand crept up, and forged competition-killing alliances, Seaney said. The result: some fares soared 30 per cent or more in 2010.

Although such big increases aren’t in store for this year, American Express is forecasting fares will increase as much as nine percent on US-Europe routes. Within the US, stubborn consumers and widening networks of low-cost carriers are keeping fares low, at least for non-holiday flights.

“Airlines have had a heck of a time raising base fare prices,” said Seaney, who counted only two increases that stuck out of a dozen attempts in 2010. “As soon as they try to raise base fares, people stop buying tickets.”

He sees the same pattern for 2011, unless fuel prices continue to rise. But watch out for new fees and more surcharges for peak flying dates; airlines need to make money somehow. Best buying strategy: if you’re picky about dates, book early for the best fares. For other travel, look on-line for “flash sales” that may last one to three days and offer rock-bottom prices.

Room rates didn’t recover this year, but occupancy did, so count on higher prices. New York-based consulting firm PricewaterhouseCooper’s US, forecasts rates will rise nearly five per cent in 2011.

Get used to paying more, said Scott Berman, who leads the US hospitality and leisure practice for PwC. Thanks to a building slump, few hotels will open in the next two or three years, making existing rooms more precious.

Also check out the Caribbean, said Mike Driscoll, editor of Cruise Week, an industry newsletter based in Brookfield, Illinois. He said that he was seeing seven-day sailings for $399, which he called “unprecedented for this time of year”. Although it’s too early to tell about Europe, he said, group bookings are strong for Alaska cruises, a harbinger of higher fares.