The travel industry is bracing for a painful holiday season as people scale back their discretionary spending. But that is good news for anyone who has yet to book a winter getaway, with hotels, airlines and cruise operators introducing last-minute deals to entice vacationers.
Holidays are the busiest time of year for most travel companies, a season when they command the highest rates for popular winter destinations.
But as the economy’s decline has accelerated, nervous consumers have started to shut their wallets and put off vacation plans. For the first time in six years, Thanksgiving travel is expected to decline, according to AAA, the automotive group, with about 41 million Americans taking trips of 50 miles or more from home, a dip of 1.4 percent from last year.
Despite lower gas prices, 1.2 percent fewer Americans expect to travel by car, AAA said — more than 33.2 million Americans this year, off from the 33.6 million people who drove a year ago.
“There is no part of the industry that will go unscathed,” said Henry H. Harteveldt, a travel analyst with Forrester Research.
Now travel companies are rushing to fill space, with resorts in popular holiday hotspots reducing minimum stay requirements, throwing in extras and cutting prices.
Ski.com, which negotiates discounts with resorts, is offering rate reductions as deep as 50 percent for lodging in Steamboat Springs, Colo., over the Christmas and New Year’s holidays. Last week, American Airlines was offering nonstop flights between Washington and Miami for $212 round trip, down from about $310 on average, and flights between Detroit and Chicago for as little as $119 round trip, down from about $185, during Christmas week.
As of Monday, Expedia.com was offering a four-night Bahamas cruise from Miami for just $99 a person. “That’s $25 a night including room and board and entertainment,” said Chris McGinnis, editor of the Expedia Travel Trendwatch. “You can’t live at home for that cheap.”
For hotels, the holiday outlook is not looking very merry or bright. “This will be one of the largest declines in hotel occupancy,” said Bjorn Hanson, an associate professor at the Tisch Center for Hospitality, Tourism and Sports Management at New York University. “The only comparable periods were 2001 and the early 1970s.”
With declines in bookings across the board, Mr. Hanson predicts hotel occupancy rates to decrease to as low as 53 percent this holiday period from about 58 percent last year.
“It’s just really hard to find some good news — except for travelers,” he said. “Without trying too hard,” he said, consumers will be able to find hotel rates 10 percent lower than last year.
That plays to the advantage of those who have procrastinated in making holiday travel plans. Ray Harkness, a computer programmer in Mustang, Okla., is one of them. He usually flies to Disney World with his wife, Nancy, every December. This year, he put off buying airline tickets after turning up fares of around $450 apiece during the spring and summer.
Two weeks ago, Southwest Airlines reduced one-way fares from Oklahoma City to Orlando, and Mr. Harkness was able to snap up two tickets in mid-December for about $270 each.
“We’re almost paying the price of one ticket for both of us,” he said. “For us, that’s going to be Christmas.”
The Air Transport Association, the trade group for airlines in the United States, said earlier this month that it expected the number of passengers to decline 10 percent this Thanksgiving holiday compared with last year, the first dip in seven years.
Faced with empty seats, airlines are cutting prices. On average, airfares are significantly cheaper now than for those who bought tickets this summer, or even a few weeks ago. The average one-way coach ticket bought in advance was $117 last week, down 13 percent from $135 in early July, according to Harrell Associates, a consulting firm that tracks airfares.
“Airlines put very high fares out there to see who would bite,” said Robert Harrell, who leads the firm. “They’re not seeing enough takers, so fares are beginning to drop.”
Even airlines that are not promoting outright sales have been offering bargains. JetBlue Airways has been offering fares as low as $49 each way for midweek travel from New York to Richmond, Va., and $125 each way for travel through Dec. 15 from New York to San Francisco, Burbank or Long Beach, Calif.
Fares may have dropped in recent months, but they are not necessarily cheaper than they were last holiday season, suggesting the airlines’ cuts to their schedules may be helping the bottom line.
In addition, all the newly imposed fees for items like pillows or checked bags can add up quickly. Checking two bags round trip on a domestic flight can add as much as $80 to the price of a ticket. And that is not counting charges for overweight or oversize luggage.
“The addition of incremental fees means that if a passenger succeeds in getting a lower base fare than last year, their out-of-pocket expense actually ends up being higher,” said Jamie Baker, an analyst at JPMorgan Chase.
All the travel bargains are little consolation to travelers who booked early only to miss out on savings. Jason Ma, an actor from Manhattan, paid $650 in September to purchase a round-trip flight from New York to Los Angeles for Christmas. Last week, the same itinerary was going for $539.
“I kind of didn’t want to know,” said Mr. Ma, who also works as a temp for Airfarewatchdog.com, a bargain site, and thus has been acutely aware of his missed opportunity.
For bargain hunters, some of the usual rules of airfares still apply. The best deals will go to travelers with flexible schedules. “Stay away from Sundays,” said Rick Seaney, chief executive of Farecompare.com, which tracks airline prices.
Those dates will be among the busiest and costliest because both Thanksgiving and Christmas fall on a Thursday this year, he said. Flying on the holiday itself can also be cheaper.
To help fill seats, some airlines, including American, United and Northwest, have introduced color-coded calendars with their holiday sales this year, which point out the best days to fly and save. Travelers can also check ITASoftware.com, which lets you easily search any 30-day period for the lowest price.
Making a pit stop can also cut down costs. A nonstop flight on Continental from Newark to Portland, Ore., over the Christmas holiday was $791 in a recent online search. By making a stop in Atlanta, a traveler could save about $150. More stops, of course, mean more chances for delays and a missed connection.
Airlines have also been advertising quick sales on trips to Europe. British Airways introduced a three-day sale last week with flights to London as low as $396 round trip from New York, not including taxes or fees. Eurofly, an Italian carrier, is charging as little as $559 round trip from New York to Rome, including fuel surcharges but not taxes or fees.
Because first- and business-class travel typically slows during the holidays as business travel drops off, some of the best bargains are in the front of the plane. American Airlines is offering round-trip business-class fares over Christmas and New Year’s from New York to London — a route where walk-up fares can be close to $10,000 — for as low as $1,784, not including taxes and fees.
For travelers who fly coach, a hundred dollars here and there can make a big difference. In September, when James Welle, a software developer from Seattle, began searching for airline tickets to Fargo, N.D., to visit his family this Thanksgiving, prices were hovering around $700 round trip.
He consulted multiple Web sites and changed his travel dates to see if he could get a lower fare, but to no avail. “I kept checking back and looking for deals,” he said.
Just when he was considering flying into Minneapolis and making the three-and-a-half-hour drive to Fargo, he stumbled on a sale at Northwest. He booked a flight for himself and his wife at $460 a person round trip, a savings of $240 each.