World and Nation

Budgets Shrink, and Holiday Airfares Follow Suit

The travel industry is bracing for a painful holiday season as people scale back their discretionary spending. But that is good news for anyone who has yet to book a winter getaway, with hotels, airlines and cruise operators introducing last-minute deals to entice vacationers.

Holidays are the busiest time of year for most travel companies, a season when they command the highest rates for popular winter destinations.

But as the economy’s decline has accelerated, nervous consumers have started to shut their wallets and put off vacation plans. For the first time in six years, Thanksgiving travel is expected to decline, according to AAA, with about 41 million Americans taking trips of 50 miles or more from home, a dip of 1.4 percent from last year.

Despite lower gas prices, 1.2 percent fewer Americans expect to travel by automobile, AAA said — more than 33.2 million Americans this year, off from the 33.6 million people who drove a year ago.

“There is no part of the industry that will go unscathed,” said Henry H. Harteveldt, a travel analyst with Forrester Research.

Now travel companies are rushing to fill space, with resorts in popular holiday hotspots reducing minimum stay requirements, throwing in extras and cutting prices., which negotiates discounts with resorts, is offering rate reductions as deep as 50 percent for lodging in Steamboat Springs, Colo., over the Christmas and New Year’s holidays. Last week, American Airlines was offering nonstop flights between Washington and Miami for $212 round trip, down from about $310 on average, and flights between Detroit and Chicago for as little as $119 round trip, down from about $185, during Christmas week.

As of Monday, was offering a four-night Bahamas cruise from Miami for just $99 a person. “That’s $25 a night including room and board and entertainment,” said Chris McGinnis, editor of the Expedia Travel Trendwatch. “You can’t live at home for that cheap.”

For hotels, the holiday outlook is not looking very merry or bright. “This will be one of the largest declines in hotel occupancy,” said Bjorn Hanson, an associate professor at the Tisch Center for Hospitality, Tourism and Sports Management at New York University. “The only comparable periods were 2001 and the early 1970s.”

With declines in bookings across the board, Hanson predicts hotel occupancy rates to decrease to as low as 53 percent this holiday period from about 58 percent last year.

“It’s just really hard to find some good news — except for travelers,” he said. “Without trying too hard,” he said, consumers will be able to find hotel rates 10 percent lower than last year.

That plays to the advantage of those who have procrastinated in making holiday travel plans. Ray Harkness, a computer programmer in Mustang, Okla., is one of them. He usually flies to Disney World with his wife, Nancy, every December. This year, he put off buying airline tickets after turning up fares of around $450 apiece during the spring and summer.