Book your airline tickets! Travel is cheaper for now, but it may rise in 2010

If you're feeling like a character in a Southwest Airlines commercial -- that is, you "wanna get away" -- take heart: Travel expenses will drop this month and stay low into early 2010. It won't stay that way for long, though. By the end of 2010, it'll cost more to fly to your destination -- but on the plus side, it will be cheaper to stay there once you arrive.

"Considering airfare, hotel and ground transportation, we expect the average domestic business trip to increase 1.2 percent, or $13, to a total of $1,080," American Express Business Travel VP–general manager Hervé Sedky said in a statement about its 2010 travel forecast. Additional fees could increase the cost of any trip by as much as 15 percent, Sedky said.
Because airlines have the flexibility to cut flights or fly smaller planes to control the supply of seats, American Express predicts that domestic short-trip airfares will rise between 2 percent and 7 percent while international business fares will increase from 3 percent to 8 percent.

But rates at U.S. hotels will drop by 1 percent to 4 percent, the company predicts, largely because weakened demand this year will give way to a flurry of demand for meetings and travel next year. In its October hotel industry forecast, Smith Travel Research said the average daily rate for hotel rooms decreased 9.7 percent to $96.43 in 2009, due to a 5.5 percent decrease in demand. For 2010, the ADR is expected to decrease another 3.4 percent, to $93.16.

Chad Church, STR industry research manager, said the hotel industry is hoping for a recovery through stronger demand in business-group travel, now that conference season has begun. However, he says, "With the stabilization of transient leisure demand, expect to see continued deep discounting in both segments throughout 2009 as hoteliers focus on rate to try to entice consumers."

This month's Hotwire Hotel Rate Report lists 10 North American cities with the steepest drops in room rates. (Houston tops the list with a 30 percent discount over October 2008, when hotel rates rose as people in the region sought refuge from hurricane Ike.) By coincidence or not -- the U.S. just experienced its first autumn cold snap -- Hotwire's list is full of warm-weather locations with double-digit declines in room rates: Jacksonville, Florida is down 22 percent; Orlando and Miami, 19 percent; and Phoenix, 18 percent.

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