Executive Travel: A WorldTravel Affiliate

For the Week of: July 21, 2008

16 PREDICTIONS THAT HAVE ALREADY COME TRUE – A mid-year look at my annual travel industry predictions makes me look prophetic -

Each year in January I put together a list of predictions of things I think will happen in the travel industry in the coming year. Now that we are a little more than half way through the year I have been amazed at how many predictions I made that have come true. It is almost scary! Listed below are just a few of my predictions made in January along with an update of where we are in July: (Top)

• Domestic airfares are going up into the stratosphere in 2008 –

The major airlines are quietly cutting their domestic capacity so they can continue to increase airfares in 2008. The elimination of flights and flying routes less frequently will lower the number of available airline seats by over 77,000 in January alone (compared to last year). Add to this the skyrocketing fuel prices and we may see the end of the $198 RT airfare specials this year. (JULY UPDATE: AIRFARES TO SOME CITIES HAVE RISEN 50% OR MORE AND COULD DOUBLE BY YEAR END) (Top)

• Forgetting to fill up your rental car with gas could cost you $100 –

The car rental companies will put many travelers into cardiac arrest if they forget to fill up their rental car prior to returning it. Gas surcharges will cost almost $100 on many cars if you forget to fill them prior to their return. (JULY UPDATE: SOME RENTAL CAR COMPANIES ARE NOW CHARGING $7 A GALLON TO FILL YOUR CAR. A 15 GALLON FILL WILL COST $105) (Top)

• Look for $99 transatlantic airfares in 2008 –

I predict you will see $99 one-way airfare from the U.S. to Europe introduced in 2008. The United States and the European Union have both agreed to allow an open market for airlines flying between Europe and the U.S. starting in the summer of 2008. This means that many new airlines are expected to start flying between the two continents. Several of these airlines will be low-cost airlines that most likely will try to dramatically lower the cost across the pond. Ironically, next year it might actually be cheaper to fly from Omaha to London than from Omaha to Dallas. (JULY UPDATE: LESS THAN A MONTH AFTER THIS PREDICTION WE FOUND AN AIRFARE TO LONDON FOR $99 RT. HOWEVER, TAXES AND FEES AND FUEL SURCHARGES ADDED ALMOST $500 TO THE PRICE) (Top)

• Check-in luggage will cost you $10 a bag –

2008 will be the year that the airlines start charging you to check-in your luggage. I expect United Airlines to be the first to try this and if they are successful then other airlines will follow suit. Frequent flyer club members will not be charged to check luggage. This will cause people to do two things. One, take more carry-on luggage and two, travel with less luggage altogether. Maybe Fedex will make it cheaper to ship your bags than the airlines will charge you to check them in. (JULY UPDATE: AS MOST KNOW MOST AIRLINES ARE NOW CHARGING $15 TO CHECK THE FIRST BAG AND $25 FOR THE SECOND. IN SOME CASES IT IS ACTUALLY CHEAPER TO UPS YOUR LUGGAGE RATHER THAN TO CHECK IN ONTO YOUR FLIGHT) (Top)

• 2008 is the year of the “hidden fee” –

Seems like every part of the travel industry has jumped on the fee bandwagon. For years the airlines have charged hidden fees for changing tickets ($100), fuel surcharge ($10 - $200), calling their phone to book a ticket ($10), etc. Now the hotels have jumped on board by charging resort fees ($10-$25 a day), parking fees ($10-$75 a night), internet fees ($10 a day), early departure fees (one night penalty), energy surcharge fees ($5 to $10 a day), etc. Car rental companies add fees for extra drivers, insurance, and a host of other “gotcha fees”. Unfortunately, this bait and switch pricing is giving the travel industry a black eye that someday may make travelers say “I’m not going to take this anymore and simply stay home. (JULY UPDATE: WE NOW HAVE FEES FOR LUGGAGE, SODA POP, PILLOWS, FOOD, CHANGING TICKETS, AND EVEN TALKING TO A LIVE PERSON) (Top)

• Non-stop flights will be king for business travelers –

Most travelers are fed up with all the problems of flight delays and cancellations. Many business travelers today will only travel if they can find a non-stop or direct (one stop but do not have to get off plane) flight that minimizes the chance for problems. Expect prices for direct flights to be as much as $100 more than connecting flights as airlines are finally able to squeeze out a financial premium that saves travelers time and hassle. (JULY UPDATE: TAKING NON-STOP FLIGHTS SHOULD ALMOST BE REQUIRED BY MOST CORPORATIONS AS FLIGHT DELAYS, ETC ON CONNECTING FLIGHTS CAN IN THE WORST CASE CAUSE FOR MISSED MEETINGS AND DAYS OF DELAY) (Top)

• Expect one major airline meltdown in 2008 –

All it takes is one major snow storm during spring break and you could see people stranded for as much as a week without being able to get home. With airlines at 90% capacity if even a hundred flights are cancelled this puts thousands of people without a seat to fly home. (JULY UPDATE: WE HAVE SEEN FIVE AIRLINES GO OUT OF BUSINESS ALREADY THIS YEAR AND WE CAN EXPECT 1-5 MORE TO FOLLOW SOON) (Top)

• Missing a connecting flight in 2008 could keep you stranded in an airport for two days –

Once again, with airlines flying their planes 90% full means they only have a few seats available if a flight is cancelled or delayed. Add a major storm into the mix and missing your connecting flight in 2008 might mean you are sitting in the airport waitlisted for the next available seat, which might be two days later. One more reason to pay a little extra and fly on direct flights. (JULY UPDATE: AIRLINES ARE TAKING MORE THAN 1 IN 10 PLANES OUT OF THE SKY THIS FALL WHICH MEANS THAT IF YOU HAPPEN TO MISS A FLIGHT YOU BETTER BE PREPARED TO CAMP. (Top)

• United and Continental Airlines will merge –

I have been predicting this for 4 years and it looks like it will finally come true in 2008. All the airlines are trying to dance with each other so if the United/Continental merger does not happen surely another one will. (JULY UPDATE: THEY DID NOT MERGE BUT DID THE NEXT BEST THING BY CODE SHARE MARKETING AND SHARING FLIGHTS) (Top)

• Visiting grandma (during the holidays) will cost you $50 to $100 more per ticket –

Airfares rose by double digits last year and will do so again in 2008. The good news is they will stay low this winter but will rise rapidly in the spring. If you paid $300 to visit grandma last year you can expect to pay $50 to $100 more for that same trip. Expect to pay $350 - $450 for a ticket during the holidays this year. (JULY UPDATE: HAVE YOU TAKEN A LOOK WHAT THE COST OF FLYING DURING THANKSGIVING IS THIS YEAR? IT WILL AMAZE YOU) (Top)

• It will cost almost double miles to find a free seat when redeeming frequent flyer miles –

Billions of frequent flyer miles are flooding the market as over half the frequent flyer miles earned today are not by flyers but by credit card purchases. The airlines are actually increasing the number of seats they make available for people to redeem their frequent flyer miles, however in many cases it takes twice as many miles in order to find a seat. This means frequent flyer mile holders can find that free domestic ticket they want but not for 25,000 miles. It will often take 50,000 for a basic roundtrip domestic airline ticket in 2008. International flights that used to cost 50,000 miles will actually cost you 100,000 miles. (JULY UPDATE: NOT ONLY IS IT TAKING MORE MILES TO REDEEM FOR FREE TICKETS BUT THE AIRLINES ARE NOW CHARGING YOU A REDEMPTION FEE) (Top)

• Travel agents are back in vogue –

Having a great travel agent makes a trip easy and fun, plus saves time and money. Travelers are returning in droves to travel agents as they want someone to coach them to make sure their travels are worry free. (JULY UPDATE: AS AIRFARES GO HIGHER PEOPLE ARE ASKING TRAVEL AGENTS TO HELP THEM FIND GOOD DEALS) (Top)

• Merger mania will force Delta to get married to someone -

Last January US Airways wanted to take them to the dance but Delta gave them the cold shoulder. Every major U.S. airline is going to the dance to see if anyone wants to get hitched. If the airline merger dominos start to fall then we could see as many as 3 major airline mergers in 2008. (JULY UPDATE: DELTA AND NORTHWEST HAVE AGREED TO MERGE. THINGS LOOK POSITIVE FOR THIS TO HAPPEN THIS YEAR) (Top)

• Southwest Airlines will add Omaha to Denver service in 2008 –

I thought they would do this in 2007. I anticipate they will add Omaha to the list of cities flying to Denver in 2008. (JULY UPDATE: SOUTHWEST HAS ADDED OMAHA SERVICE AND WILL PROBABLY BE EXPANDING AS THEY TRY TO SQUEEZE FRONTIER AIRLINES) (Top)

• Most airlines will start charging a fee to redeem frequent flyer awards –

These fees will start at about $15 - $50 a ticket. In the past they had only charged a fee for expedited handling. Now the fee will be for all tickets. (JULY UPDATE; MOST AIRLINES WILL NOW CHARGE YOU $25 TO $50 TO REDEEM MILES FOR WHAT USED TO BE A FREE TICKET) (Top)

• IRS to raise vehicle reimbursement to 50.5 cents per–

The Internal Revenue Service in 2008 will raise the allowable vehicle reimbursement rate to 50.5 cents per mile, which is the highest rate in history. The increase largely is attributed to growth in the cost of fuel and other vehicle expenses and is up from the 2007 rate of 48.5 cents per mile and the 2006 rate of 44.5 cents per mile. (JULY UPDATE: IN JUNE THEY RAISED THE RATE TO 58.5 CENTS PER MILE) (Top)

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