If FareCompare readers were to consult a Magic 8 Ball about whether travel costs will rise in 2012, the answer would be, “All signs point to ‘yes.’” But that doesn’t mean the news is all bad. Here are some air travel and related trends to bet on for 2012.
Listen as FareCompare’s Rick Seaney tells Editor Anne McDermott what shoppers should know:
Technology for Crews and Passengers
Wireless inflight entertainment is a cost-efficient solution that American, Delta and several others are rolling out in 2012. Besides doing away with miles of on-board cabling, wireless inflight systems will allow passengers to take advantage of fun features like real-time travel information and seat-to-seat chat. Airlines are also using the iPad in numerous ways, including in the cockpit. Airlines will increasingly make use of iPads in self-service kiosks, and Delta plans to make iPads available for passengers to rent and return by prepaid shipping box. But it’s not all about hardware. Loyalty programs and great deals will increasingly be showcased on social media sites, particularly Facebook.
Higher Fares With Occasional Targeted Fare Wars
Airlines are merging and cutting capacity, so those looking for the cheapest airline tickets must be ready to act swiftly in 2012. Look for more airlines to offer fare hedging options for travelers, such as the ability to “freeze” fares for up to 14 days when booking. Allegiant hopes to sell tickets that would cost less than a normal ticket, but that could rise or fall (with the customer accepting the risk) depending on oil price fluctuations. As for fare wars, they will probably be rarer, but look for American to protect its lucrative turf in Miami, with possible fare wars to follow. JetBlue and Spirit now fly to Dallas, so fares to or from there could drop.
Increasing Asian Influence Worldwide
Rapidly growing demand for air travel in Asia will make itself evident in 2012, with new low-fare Asian airlines as well as new high-end business service from Hong Kong Airlines and competitors. Market deregulation in Japan makes it likely that several Japanese airlines will introduce new low-cost routes there. Additionally, Qantas expects to add an Asian hub to make its flights more competitive internationally due to intense competition from Asian airlines.
Higher Ancillary Costs
In the U.S., increasing demand for hotel rooms should result in hotel rates rising by around 4 percent in 2012. New hotel construction has lagged, and as travelers recover from the worst of the recession, demand should increase. As is usual in the summer in the U.S., gas prices should peak during July and August, when more family vacations take place. Additionally, cruise lines are cutting back on last-minute deals and encouraging early booking by offering early-booking discounts.
What’s the best way to cope with expected increases in travel costs in 2012? Book early. Use FareCompare Fare Alerts so you can grab low fares before they sell out, and keep an eye on your favorite airlines on Facebook and Twitter so you’ll be the first to know about fare sales and promotions. With higher prices, the importance of travel insurance is greater than ever, so evaluate travel insurance options for every trip. If nothing else, book travel with one of the many credit cards that offers automatic travel insurance.