Airfares and Hotel Prices Down for Holidays

The economic crisis has reduced the assets of many of the formerly rich considerably. We hear that some have even to give up on their NetJets and need to learn how to stay in a much tighter travel budget. But here comes the silver lining on the horizon: As labor day is approaching we are receiving a host of reports that air fares and hotel prices are steeply dropping.

Yesterday we even got news from Microsoft’s bing “traveologist” Joel Grus that holiday fares are going to be down by 17% on average. Hotels in New York will even be hit by a 29% price decline. The main reason is obviously a steep drop in demand for travel services. Airlines, for instance, expect 1 million fewer travelers for labor day alone.

It seems that the recession is now trickling down to the travel industry, as this is a typical late stage industry in the business cycle, especially if you look at private or leisure travel. (Business class fares have been hit already much harder). Last year we have seen sky-high oil prices, fuel surcharges and ever increasing ticket prices. These times are over, according to Joel Grus.

He has also some helpful tips for the traveler. We think that these tips are also just-in-time for the wealthy traveler, as his or her wealth may have shrunk considerably since last year’s holiday season. So here are Grus’ suggestions:

• Watch October for holiday price drops. Since 2006, most Christmas itineraries saw price drops in the first two weeks of October. Bing Travel data suggests there are 50 percent more price drops during the holidays than other times of the year, so travelers are advised to set e-mail alerts to catch elusive deals
  

• Avoid additional fees. When you’re shopping for flights, consider the total cost of your trip, including all of the extra charges that you’ll have to pay on some airlines and not others. Be sure to consider the airlines’ baggage fees and overweight fees, and consider bringing your own snacks on board to avoid paying extra
  

• Travelers should buy now if they see a good fare. The likelihood of fares continuing to increase as we near the holiday season far outweighs the likelihood of fares dropping significantly. Particularly if a traveler has specific dates of travel, he should jump on the next good fare he sees.
  

We may add, that as the chart is showing, the same applies to hotel rates. So keep your eyes open, make a bargain and enjoy labor day.