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Tuesday, November 10, 2009

Tough Times for the Travel Industry

by Calculated Risk on 11/10/2009 08:43:00 AM

According to an article in the LA Times, it appears the 2009 holiday season will be worse than 2008 for the travel industry: Airlines, hotels face bleak holidays

According to the Auto Club, 46% of those surveyed said they planned to spend the same amount on holiday travel as they did last year, while 36% planned to spend less. Only 18% planned to spend more.
The article also mentions a forecast for air travel: ATA Expects 4 Percent Decline in Air Travel Over 12-Day Thanksgiving Holiday Period
The Air Transport Association of America (ATA), the industry trade association for the leading U.S. airlines, today said that it expects a 4 percent year-over-year decrease in the number of passengers traveling on U.S. airlines during the 2009 Thanksgiving holiday season, despite deep discounting over the past several months.

“It is increasingly apparent that the economic head winds facing the airlines and their customers are anything but behind us. ...” said ATA President and CEO James C. May.

... Carriers have cut back their schedules in response to economic pressures, with 2009 capacity reductions the deepest since 1942. In addition, recently released government data show that average domestic airfares in the second quarter of 2009 fell to their lowest level since 1998, dropping 13 percent from the second quarter of 2008 – the largest year-to-year decline on record.
emphasis added
And of course this will be a very difficult holiday season for hotels.