The best thing that can be said about 2008 is that it is over. That said, I wonder what 2009 will bring for all of us, especially those of us that travel and follow the airline industry closely? One good thing that happened last year is the reduction in the price of oil. However, the general economic weakness that gave us the rapid plunge in oil prices will have negative implications for the airline industry as well. It’s apparent that traffic is falling fairly rapidly. Though I suppose if I were an airline CEO, I’d rather deal with that than $150 dollar a barrel oil.
Looking ahead, I see a continued draw down in capacity by all airlines, not just the vaunted “big six.” Low cost leader Southwest is even pulling down some capacity. While I haven’t historically followed Southwest, I can’t remember a time that they’ve ever shrunk. Time will tell if the reductions in capacity are enough to keep airlines profitable in 2009. I certainly think it’s possible, but United’s recently announced New Year’s fare sale may be an indicator of where passenger loads are early in 2009. They are offering some fairly attractive pricing which leads me to believe that they are having trouble filling seats, even with their reductions in capacity. If you’re interested, you’d better act fast. Travel must be booked by January 7.
Given the number of hotels that have come online in the last few years, and the number of new properties wrapping up construction, I expect to see some good deals on hotel stays. Hotel costs have come down, and I wouldn’t be surprised if they fall further. Over the last several years, demand has been so great that hotels have been able to extract some very favorable (to them) rates. I don’t expect they’ll be so lucky in 2009. For those of us that are still traveling, 2009 could be a good year.
Regarding airline and hotel frequency programs, 2009 should be a fairly static year in comparison to last year when airlines began tacking on additional fees and charges to use your miles. Some of these fees have already gone away as fuel prices have declined, but I wouldn’t plan on any wholesale changes in our favor. One potential positive is that with travel declining, more seats and rooms may be available for miles and points. Of course, the catch-22 with lower fares and room rates is the question of whether or not you are better off paying for the ticket or the room and earning credit towards elite status in your airline or hotel program of choice. I always struggle with that one!
No matter what happens, life on the road in 2009 is sure to bring many challenges and rewards. Let’s hope it’s better than last year! I’m looking forward to it.
