There is no longer any doubt that airfares are going up, and that hotel rates are firming. In view of the fact that the hospitality industry in


general is just beginning to recover from the 2008 disaster, the suppliers in every branch of the industry are looking forward to rising rates and as many additional fees as can be packed on to the bill.


Airlines


Despite the fact that almost every airline has hedged its fuel supply contracts, there is no stopping the rise in fuel prices over the longer term. The airlines are surely aware of this, but they are reveling in the first real profits in a number of years.


Airline after airline is contemplating a variety of fees, in addition to fare increases, to up the tab each time you fly. Spirit and Allegiant are already charging for carry-on luggage. They are actually charging for the use of the overhead bin. Without naming names of specific airlines because things can change overnight; one or more airlines are now charging for


• Using an attendant rather than a check-in machine


• An Aisle seat • A Window Seat • An Exit Row seat • Snacks • Soft drinks • Expedited boarding • Expedited baggage handling


This is only the beginning, as airlines want to preserve that profit, but will eventually return air travel to a service for the wealthy. Within the next few years there will be a return to train


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and bus travel for the majority of the non-business traveler.


Auto Rental


Rates have been fairly steady, and other than revised charges regarding after-rental fill-ups, there most likely will be very little change. The rising cost of gasoline will have the most effect on the renter.


Hotels


Hotels almost universally are optimistic, as corporate meetings are coming back in a big way. Overcoming the remarks of the President about frivolous meetings, every forecast points to a revived industry representing nearly a quarter of a trillion dollars.


This, of course, is what the hoteliers have been dreaming about. The increased occupancy this represents is leading to a rather steady increase in hotel room rates.


As we predicted nearly two years ago, a steady rise in rates through 2014 or 2015 is the natural cyclical swing from a buyers’ market to a sellers’ market.


This swing is not new, and over the past twenty years we have observed the change on a predictable basis (given a year or two latitude either way). There are too many hotel rooms based on the current capacity for the apparent demand, so rates drop. As demand starts increasing, new hotels are built, old one renovated, rates go up, and suddenly it seems there is an oversupply. Rates drop, and the cycle repeats itself usually in about six years to seven years. Rates started to “hit the skids” in mid-2008, so they ought to peak and then start to fall around the end of 2014, or in the first part of 2015.


For reunion planners, it is a screeching urgency to book as soon as you can, and as far ahead as you can, for the next several years.


Attractions


Rates have already started to go up, at least for the major theme parks. Group rates, so far, have not been affected very much. It appears that the looming inflation will have more of an effect than anything else.


Industry Concerns


The looming problem for both hotels and attractions is whether the increase in gasoline prices, added to increasing fees and charges on air travel will create a drop in activity. A drop due to this factor is expected, but nobody can predict how fast and how far petroleum prices go up.


Rising world demand, even though demand is falling off in the U.S., coupled with rising costs of production as the former rich fields are being depleted, inevitably will cause gasoline to rise much farther and much faster than predicted only a few months ago.


Your Best Actions


Book as early as you can to get the best hotel rates.


Be sure to give the hotel a window rather than a fixed date.


Schedule your reunion so that it uses off-peak days and an off-season time period, bearing in mind that it may be different even in two hotels that are side-by-side.


Make sure you have as precise an RFP as possible, and list those things that you must have, including a list of hotel clauses you insist on having, and a list of those clauses you will not accept.


Any doubts? Take advantage of our Birthday Bash prices to come to a ConFAM©


. The Birthday Bash ends September 1. paul@reunionfriendly.com R E U N I O N F R I E N D L Y N E W S • S umme r , 2 0 1 1


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