Travelers are approaching the holidays more cautiously this year. Some were hoping to see even lower airline prices while others worried about swine flu or job security. A further drop in prices did not seem unrealistic since prices dropped steadily this spring, when cheap airline prices were averaging 21% below the prior year
Airlines typically try to raise prices during peak travel periods, which include travel over Thanksgiving and Christmas. This year, selective airlines tacked on $20 surcharges to travel during the holidays, only to see some competitors run sales during the same peak travel days.
The average advance purchase to travel over Thanksgiving dropped to 55 days, a decrease of almost 3 days vs. last year. The trending decline in advance purchases over Christmas is even greater. Last year people purchased airline tickets to travel in late December 96 days in advance of their trips vs. 88 days this year. Advanced purchases for International tickets dropped by almost 8 days.
Until customers believe that the economy is truly on the upswing, with jobs and wages increasing, we can expect consumers to be very cautious when it come to discretionary spending.
For departures between December 20th and January 3rd average domestic ticket prices dropped 7% from last year to $398, with International airfares declining by 11% to $793.
Domestic hotel reservations prices over the same dates fell by 9% to an average of $172 per night, while International hotel prices dropped 8% to $221.
AAA has reported that they project air travel to decrease almost 7% this Thanksgiving, to 2.3 million travelers, vs. 2.5 million in 08. These holidays will be remembered by many as time spent at home with their families and friends.