Travel Industry Worried about '09
Wednesday, November 26, 2008
Travel industry leaders are looking at the state of the global economy for an indication about how travel companies, airlines and hoteliers will fare in 2009. The outlook is mostly negative for the short term, although some experts are pointing to some of the changes as positive steps in new directions. These changes might improve the travel industry in the mid and long-term.
Higher airfares and a weakening demand for travel will continue in the short term. The financial crisis is worldwide and will most likely keep the industry’s growth to a minimum and will also force travelers to keep their number of trips to a minimum. In Asia, many airlines and travel agencies are shifting their focus from international tourism to regional services. This will lower operating costs and also help to curb some of the risk of substantial loss of profit.
On the positive side, many development companies are seeking to provide new alternatives to travelers. In India and China, for example, hoteliers and real estate developers are trying to make new ways to draw customers in tighter economic times by constructing and operating mid-range and budget hotels aimed at business travelers and tourists. These low-cost inns fill the void in between high-end hotels and low-end guesthouses and hostels.
Also, as airlines compete to gain customers, prices to different destinations have become more comparable. While it used to be cheaper to travel from the US to East Asia, now, fares to East Asia are very similar as fares to India and Australia. This opens up new options for business travelers as well as tourists. In the long term, travelers will be able to take advantage of cheaper prices on routes frequently used by businesspeople (i.e. to Hyderabad, India or Shenzhen, China) to get into a country cheaply and explore destinations not often visited by tourists.