As we all know the travel industry in particular (and most all other industries for that matter) face some real challenges in 2010. Before we get started on my best guesses for what 2010 will bring the travel industry, we should first examine my best guesses from last year
Last year I made 17 predictions, of which 11 turned out to be 100 percent correct. Several of the misses were not 100 percent correct, so I counted them as an incorrect guess. [more]
My biggest correct guess of last year was that travel costs would be a bargain in 2009. That certainly turned out to be very true. The average cost of an airplane ticket purchased from our agency decreased significantly in 2009. The cost of a domestic ticket decreased 6.39 percent, while the cost of an international ticket decreased a whopping 17.61 percent.
The cost of a hotel room purchased from our agency decreased an amazing 16.29 percent. The cost of renting a car decreased 1.69 percent in 2009. (However, we have seen some increases in rental car rates in the last half of 2009.)
My biggest incorrect guess of last year was that Southwest would begin to fly to Atlanta and to both Canada and Mexico. This just did not happen, but I still think this was a really smart guess. If the deal to purchase Frontier had been completed, this would have been our best guess of 2009. I am going to have to have a talk with Southwest and see if I can get them to be more cooperative in regards to our annual predictions.
Since the beginning of the fourth quarter I have been reading as many projections about the airline industry and the overall economy as I could find. My reading led me to believe there will be little economic growth in the U.S in 2010. I expect to see consumer demand no greater than in 2009. I expect to see unemployment at or above 9 percent at the end of 2010. I hope
the price the oil remains near its current price level. If any of these assumptions proves to be incorrect, I am going to look pretty silly this year. Now for our 2010 predictions:
• I hate to begin this year talking about security, but I think I should. Expect to see the number of whole body scanning machines at security check-ins around the country increase dramatically this year. It is our understanding that the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA) have the authority to expedite the use of these machines without Congressional approval. There are currently 19 airports in the U.S. that have this scanner. The DHS and the TSA could mandate the use of the scanners at all 560 U.S. airports as the machines become more available.
• The overall cost of travel will increase very little in 2010. If the price of fuel remains at or near current levels, U.S. domestic airfares will increase less than 5 percent. Airfares out of Denver will not increase at all if Southwest, Frontier and United continue to operate the same number of flights they each operate today. The price of hotel rooms around the country will not increase. There may be some pockets where local economies are strong and will support higher room rates, but overall there is no upward pressure on hotel rates. The price to rent a car will increase in 2010. For reasons I do not understand, the price to rent a car started to increase in the second half of 2009 and I see this trend continuing. The days of a $40 rental car appear to be over, and it has been replaced with a $50 to $60 a day rate.
• While the price of an airline ticket itself will not increase in 2010, the amount and number of different airline fees will increase in 2010 if you have no status with the airline you are flying. It is our bet that more carriers will copy United's plan to allow travelers to purchase yearly luggage fees in advance.
• Car rental companies may begin implementing no-show fees on reservations in 2010. We heard rumors of this in 2009, but never saw any follow up from car rental companies. I will not be surprised if the follow up comes this year.?
• More and more companies will allow travelers to fly on [the traveler's] preferred carrier if the airfare is within $100 of the traveler's non-preferred carrier. The reason is that preferred status saves companies on luggage fees and other airline fees.?
• Companies that have made their travel policies much tighter in 2009 will be in no hurry to ease their travel policies in 2010.?
• I do not expect to see Southwest start charging luggage fees. However, I do expect to see Southwest to continue to add other service fees.?
• While I expect to see Frontier continue as a major player here in Denver, I expect to see more management and airplane servicing jobs move to either Indianapolis or Milwaukee. ?
• Congress will pass some sort of legislation that will require airlines to provide food, water and clean bathrooms during on-plane ground delays. While this sounds like legislation we should all support, I am confident Congress will not fix the on-plane ground delay problem and the legislation will break 10 other things that are not currently broken. I am also confident this legislation will lead to a lot more cancelled flights.?
• Leisure travel deals will once again be a great big bargain in 2010. Travel to Hawaii and Mexico in particular will be so cheap it will be more expensive to stay home. ?
• If it is your responsibility to plan a meeting or an incentive trip for your company you can be a real hero in 2010. The difference between the price of four-star properties and five star properties is very small and getting smaller. You can stay in some of the best resorts in the world for prices that were simply not possible two years ago.?
Well there you have my best guesses for 2010. I have made fewer guesses this year than last, so I sure hope I am right about some of them. This year I will give you a mid-year update on how these predictions are holding up.Robert Polk is CEO of Polk Majestic Travel Group in Denver. These insights are excerpted from Robert's weekly newsletter
, From the Desk of Robert A. Polk.