Saturday, May 22, 2010

Airlines Fill Seats with Summer, Holiday Travelers

USA Today

Holiday travel is making a comeback, for both airline and cruise passengers, seeking discounted flights and cheap Mexico cruises.

The downside for Memorial Day weekend fliers, though: higher fares and packed flights.

"People seem to feel more confident about travel and the economy in general," says Genevieve Brown, senior editor of travel website Travelocity.

Airfares booked on Travelocity for travel from May 27 to May 31 average $332 round trip (including taxes and fees) this year, up 16% from Memorial Day weekend of 2009. International fares are 21% higher this year, averaging $742 round trip. Bing Travel, another airfare search engine, reported a similar rate of increase for domestic fares, at 18%.

Few expect travel volume to return to the pre-recession levels of mid-2008. But pent-up customer demand is driving fares up following a grim 2009, in which belt-tightening occurred across all travel segments, including corporate and vacation travel.

"Last year, they (bypassed) all trips. Demand was abysmal. This year, they're going to travel come hell or high water. There's no 'staycation' this year," says Rick Seaney, CEO of, which is also seeing a jump in Memorial Day fares.

A Travelocity poll of more than 2,000 travelers says about half of respondents plan to travel more this year, while only 7% plan to travel less.

According to the U.S. Travel Association, leisure travel is expected to rise 2%; business travel, 2.5%; and international travel into the U.S., 3% this year. "Projected growth in leisure travel is an indicator of rising consumer confidence and disposable income," says Suzanne Cook, senior vice president of research for the Travel Association.

Airlines deeply cut capacity in recent years, and will not restore seats quickly enough to match the anticipated rise in demand for the summer season that's ushered in by Memorial Day. The number of seats scheduled to fly domestically in late May is generally flat from the year-ago period, according to a USA TODAY analysis of OAG (Official Airline Guide) airline schedules data.

"Flights are going to be completely full this summer. I haven't seen airlines smile about any seasons recently. But they're smiling about summer," Seaney says. "Almost any cheap seats are sold out."

Travelers should also be mindful of peak holiday travel surcharges, Seaney says. Those boarding Memorial Day weekend flights are assessed a $30 fee each way, compared with $10 each way on most other summer days. "You're going to pay $40 more for a (round-trip) flight."

A silver lining? Hotels are still cheaper than last year. For domestic hotels, room rates are 4% lower for Memorial Day weekend than a year ago, Travelocity's Brown says.

And some beach destinations are still struggling and bucking the trend of higher airfares and cruise fares. They include Jamaica (fares down 5% from Memorial Day weekend 2009), the Dominican Republic (down 3%) Maui (down 5%), and discounted Alaska cruises.

Nine of the top 10 beach destinations are also showing declines in hotel room rates for the holiday weekend, Brown says.