The Dismal Science Meets a World of Opportunity
What we have here is a good news/bad news situation. The bad news is the global economy is still tanking. The good news, for individual travelers, is that travel providers - airlines, hotels, cruise ship lines - just keep cutting rates and offering enticing deals. For those with the means and desire to travel, there are incredible savings to be had.
More on that in a minute.
But first some dismal travel-related news about the dismal science: economics.
Harvard economics professor Robert J. Barro reported in a recent study that there is about a 20 percent chance of the U.S. economy, the worldd's largest, sliding into a depression, which he defines as at least a 10 percent contraction of per-person gross domestic product or consumption. That hasn't happened since the 1930s, but the really scary thought is that this decade could end up being the '30s with mobile phones.
Consider these travel-biz numbers:
* The International Air Transport Association, the trade organization for the world's airlines, reported that commercial airlines lost $8 billion in 2008, way up from the already bad $5 billion IATA expected as recently as December. Nearly half of the losses occurred in the fourth quarter of last year and were driven by a drop in consumer demand for air travel. IATA hiked its forecast of global airline losses in 2009 to $4.7 billion from an earlier estimate of $2.5 billion.
* Singapore, a major Southeast Asia hub for cruise ship lines and airline passengers, experienced a double-digit drop in visitor arrivals in early 2009 compared to the same period in 2008.
* British Airways, a leading trans-Atlantic carrier and one of Europe's biggest airlines, reported this week that the number of premium passengers in lucrative business- and first-class fell off some 17 percent this April from April 2008. BA said earlier it expects to lose some $212 million this year and is looking at making job cuts.
The silver lining in the gloom: These dire developments are prompting vendors to offer consumers the carrot of deals instead of the stick of sky-high prices.
Major hotels are, for example, offering fourth nights free - that's a de facto discount, though hotels still hold onto their higher official rack rates. Cruise ship lines are among the deepest discounters, cutting some prices in half for the rest of 2009. Cash-strapped airlines, battered by rising fuel prices last year and now hit by falling consumer demand, are slashing fares and offering hotel packages. Just one example: Travelocity reports that airfares for 100 popular destinations inside and outside the U.S. have dropped 40 percent since last year.
This is bad for travel providers, to be sure, but good for travelers.
Details of specific deals change constantly but when one deal expires, another seems to pop up. In this very fluid situation, the most important words to remember are 'fast' and 'flexible.' If you can move quickly and be open to considering a variety of destinations, these otherwise trying times are among the best of times to be in the sky, on the road or on the waves.