Americans to pay extra money for holidays as demand soars

Los Angeles: Americans are venturing out again as they start to shake off the recession. That may be good for their spirits, but it's bad for their bank accounts.

As more people travel, flights, cruises and hotel rooms get more expensive. Expect to pay more for your vacation this year, industry experts say.

"Travellers won't be as much in the driver's seat in 2011 as they were this year," said Bruce Baltin, Los Angeles-based senior vice-president of Colliers PKF Consulting USA, a hospitality consulting firm.

But he added: "There still will be deals in 2011. You'll just have to hunt for them."

You'll probably pay more for foreign flights in 2011 than in 2010, and about the same for domestic flights, said Rick Seaney, chief executive of the travel website FairCompare.com.

After international fares slumped in the summer of 2009, airlines battled back.

They kept their route networks trim, even after demand crept up, and forged competition-killing alliances, Seaney said. The result: some fares soared 30 per cent or more in 2010.

Although such big increases aren't in store for this year, American Express is forecasting fares will increase as much as nine per cent on US-Europe routes.

Within the US, stubborn consumers and widening networks of low-cost carriers are keeping fares low, at least for non-holiday flights.

"Airlines have had a heck of a time raising base fare prices," said Seaney, who counted only two increases that stuck out of a dozen attempts in 2010. "As soon as they try to raise base fares, people stop buying tickets."

He sees the same pattern for 2011, unless fuel prices continue to rise. But watch out for new fees and more surcharges for peak flying dates; airlines need to make money somehow.

Best buying strategy: if you're picky about dates, book early for the best fares.

For other travel, look on-line for "flash sales" that may last one to three days and offer rock-bottom prices.

Room rates

Pity the American innkeeper.

"Last year was the biggest downturn in the US lodging industry since we've been monitoring rates and occupancy, which we began doing in 1935," Baltin said.

He blamed not just the recession but also the "AIG effect", referring to public outrage when the insurance giant held a conference at a lavish resort in 2008 after a government bailout.

For months, publicity-shy companies cancelled off-site meetings.

Room rates didn't recover this year, but occupancy did, so count on higher prices. New York-based consulting firm PricewaterhouseCooper's US, forecasts rates will rise nearly five per cent in 2011.

Get used to paying more, said Scott Berman, who leads the US hospitality and leisure practice for PwC.

Thanks to a building slump, few hotels will open in the next two or three years, making existing rooms more precious.

Cruise fares

Best buying strategy: "Befriend your favourite hotel or destination," Baltin said.Become its Facebook fan, follow it on Twitter.com and join frequent-guest programmes to get exclusive deals.

Put your money on hard-luck Las Vegas, where you'll still find great rates in 2011, especially midweek. These are also headed up next year, at least for the first half, said Matthew Jacob, senior leisure analyst for ITG Investment Research, a New York-based firm.

With demand starting to return, cruise lines are hoping to push up prices that were driven down by the recession.

Even so, he said: "There are certainly bargains to be had if people wait for last-minute fares or have flexibility about their itinerary or ship."

One place to look is Mexico, which has been pounded by bad publicity over its violent drug wars.

"The demand for Mexico was really low this year," said Pam Jacobs, a travel agent at the TravelStore in Palos Verdes Estates.

And judging from fares, as low as $439 (Dh1,612) for a seven-day autumn cruise to Mexico from Southern California, next year is shaping up the same way.

Also check out the Caribbean, said Mike Driscoll, editor of Cruise Week, an industry newsletter based in Brookfield, Illinois. He said that he was seeing seven-day sailings for $399, which he called "unprecedented for this time of year". Although it's too early to tell about Europe, he said, group bookings are strong for Alaska cruises, a harbinger of higher fares.

Best buying strategy: skip splashy premieres. Royal Caribbean's new Allure of the Seas has been commanding well over $1,000 for weeklong Caribbean sailings, Driscoll said.