Expert Travel Predictions For 2009

2008 will be remembered by many as the most challenging year since the aftermath of the September 11th attacks. More than just one factor, travel experts were juggling multiple themes during the past year including weakening consumer demand, skyrocketing fuel costs, and US Dollar weakness against the Euro and other major currencies. The only constant that seems to remain as we enter the New Year is continued and more systemic global economic turndown which will likely continue well into 2009. Considering the lightning speed which has characterized many of the changes witnessed during 2008, it might be overly ambitious to attempt to predict the likely scenarios in 2009. Nevertheless, here’s my best shot at what we might be seeing in the near future:

1. Continued Downward Pricing Pressure – So much of the travel industry is energy dependent that it was a wonder that prices continued to fall last year even with record high oil prices. The precipitous fall in energy gave further impetus to the downward price trends which are prevalent throughout the economy. Travel suppliers, cruise and otherwise, recognize the interdependence between room counts and secondary income streams and will reduce prices to record low levels to ensure high occupancy. This radical price reduction is most apparent in the cruise industry and in resort cities such as Las Vegas, where visitor expenditures place such a key part in the profit formula.

2. Government Tourist Office Intervention – Various countries and regions will create and advertise massive incentives to entice tourists to visit their respective areas. These incentives will not be isolated to third world venues such as the Caribbean but will include Europe and Canada as well. Every visitor staying a specified period of time will be eligible for the government based bonus packages.

3. Dollar Strengthens – As the banks of the other major industrial nations reduce their interest rates to spur lending and economic activity, the dollar will rise. Some predict that the US Dollar and Euro will be at par in 2009. European tourism will benefit from a stronger dollar.

4. Economic Uncertainty Fuels Late Booking Trend– The trend of late bookings which has been growing in recent years will reach a crescendo in 2009. The late booking trend will force suppliers into even greater price reductions to fill space and the traveling public will be trained to wait for the lowest price. Additional cruise capacity planned years ahead for a brighter economic scenario will further exacerbate the problem. More cruise ships will be relocated to other geographic areas such as the Middle East, Orient, and South America in an attempt to find greater demand and higher revenue.

5. Obama Presidency Re-Establishes US Prestige – Obama presidency to increase popularity of US as a tourist destination barring a series of Bush-like missteps, Obama’s global popularity will encourage US tourism. The love affair between the US and much of the rest of the world will be renewed.

6. Reconciliation Begins With Cuba – A multitude of factors both within Cuba itself and in the US result in an opening which will eventually lead to the end of the isolation and embargo in place since the early 1960s. When Cuba finally opens, the cruise industry in particular will be the primary initial beneficiary of the huge pent up demand which exists.