Fall 2012 travel outlook

August 31 2012 by Chris McGinnis
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Biz Travel.jpgElection-year uncertainty and a weak US economy combined with higher gasoline prices, airfare and hotel rates have not deterred American travelers this summer, and healthy demand should carry on into the fall months.

This year, the fall travel season begins just after Labor Day (Monday, September 3) and extends through mid-November when demand begins to rise in anticipation of a relatively early Thanksgiving (Thursday, November 22).

Business travel "season" starts in early September as executives head back out on the road after summer breaks to visit clients they missed over the summer, or to attend meetings and conventions, which peak during the fall months. While there will likely be fewer visitors from economically embattled Europe, healthy demand in the US and Canada, as well as an influx of visitors from Asia are helping to counterbalance that decline.

With over 2,000 hotels in the US alone, Best Western expects a healthy fall travel season. Looking ahead, its advance bookings in the US and Canada for September, October and November are up 10% compared to this time last year. Advance bookings at airport hotels in North America, where guests tend to be predominately business travelers, are up 18%. Similarly, advance bookings at hotels located in intown areas are up 13%. Despite the increase in demand, Best Western's average North American hotel rate during the fall in the US is only up 3.7%

Another indicator that business travel will remain strong this fall is the 15% increase in advance bookings at upscale, business traveler-focused BEST WESTERN PLUS properties. Also, advance bookings at upscale BEST WESTERN PREMIER hotels are up a whopping 24%, but most of that increase can be attributed to overall growth of that tier --this time last year only 13 PREMIER hotels were open; this year, there are 20.

Gasoline Prices: The recent spike in gasoline prices is having minimal impact on travel plans in the US. In early June, the average price of a gallon of gasoline was $3.52. It then dipped to a low of about $3.30 in early July. By the end of August, it had increased rather dramatically to $3.72 according to the US Energy Administration. However, the price jump at the pump did little to keep Americans off the road for Labor Day--according to AAA, travel volume over the long holiday weekend was 3% higher than last year--up to the highest level since the recession began in late 2007. In early August, advance bookings for Labor Day weekend at Best Western hotels across the US were up a healthy 10%.

Airfare: As the price of a barrel of oil approaches $100 again, airlines are feeling the impact of rising fuel costs, and in August they raised prices across the board for the fifth time this year. However, during fall months, travel demand declines compared to peak summer travel season, so travelers can expect some relief from high fares in coming months. However, the days of broad across-the-board fares sales are long gone--so smart bargain-focused travelers need to keep their eyes peeled for sales of very short duration between specific markets instead. Recent cuts in airline capacity (down some 11% since 2005), combined with steady demand on the part of consumers, means that airfares during peak holiday travel seasons (Thanksgiving, Christmas, New Years) should remain painfully high. But as always, heavily discounted shoulder season fares in early November, early December or early January should be available for those with the flexibility to take advantage of them. Tip: If possible, schedule business trips to coincide with these dips in demand.

Hotel Prices: Due to steady demand, hotel prices are rising, but the increases are uneven across the US. For example, travelers can expect to see significantly higher rates in large coastal cities such as New York, Boston, Washington, San Francisco or Seattle--especially during the fall months when meeting and conventions peak. However, rates in smaller, interior cities have remained mostly flat, or even declined in some cases. This variation means that average rates should increase less than 5% this fall. Tip: During fall months, travel suppliers reach out to business travelers with special deals and bonuses tied to their loyalty programs--for example, Best Western Rewards is offering members double or triple points for their second and fourth stays between September 23 and November 18.

Rental Car Prices: Rental car prices have remained mostly flat in recent years, but that could begin to change. This is due to consolidation in the industry, with only three major players left--Avis/Budget, Hertz (which purchased Dollar/Thrifty in August) and Enterprise (which now owns Alamo and National brands). Additionally, with airlines cutting service to smaller towns, demand for rental cars will increase as business travelers fly to the nearest airport, and then rent cars to drive to their appointments in smaller towns.

Chris McGinnis is Best Western's travel trends expert and business travel blogger on youmustbetrippin.com

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