The Year That Travel Changed

By just about any measure, 2008 consisted of two completely opposite periods: the first two-thirds dominated by skyrocketing fuel prices and all the resulting fallout, and the last third by a massive economic contraction. Are we better off now than in December 2007? Just about all of us who travel are worse off, as is the overall travel industry. Here's my take on the year's biggest stories.

Oil Prices/The Economy. During the first part of the year, the skyrocketing prices of oil and the products based on it hit just about everything and everyone in the travel industry. The overall economy mirrored this movement. Airlines, in particular, felt a big squeeze, resulting in increasing fares and at least contributing to the failure of several small lines. Suddenly, however, the oil situation—and the economy—completely reversed, and 2008 ended with the lowest oil prices and levels of economic activity in years.

Everything on Sale. The big story at the end of the year is that just about every travel supplier is hanging out a sale sign. My inbox has been stuffed with announcements of fare cuts, price reductions, package promotions, and, of course, the ubiquitous claims of savings on everything. Airlines that adopted the ruse of fuel surcharges to disguise fare hikes started announcing corresponding reductions. All year, I touted cruises as a best buy, and by now, some last-minute rates have fallen to $50 per person per day, and lots are under $100.

Nickel-and-Dime Fever. Most airlines caught on to the idea that rather than increase fares, they'd add a laundry list of separate fees for services that used to be free. Most travelers seem to hate the idea; a few think new fees beat higher fares.

Airline Consolidation. The Delta-Northwest merger kicked off the long-awaited consolidation of the big U.S. airlines. So far, the merger hasn't produced either any clear gains or losses for air travelers, but it's still in its early days. I have no doubt that when the dust settles, consumers will again get the short end of the stick. So far, Delta-Northwest is the only big domestic merger. Currently, the main focus is on Europe, where British Airways and Iberia are in a mating dance and several lines are looking to swallow ailing Alitalia.

Reduced Air Service. Both the early fuel-price squeeze and the later economic downturn pressured domestic airlines into cutting capacity. As a result, some communities lost air service entirely and others were downgraded to smaller planes.

Airline Disappearances. Aloha, ATA, and Skybus failed and went out of business, as did several small low-fare lines in Europe. And the idea that very small jets could provide cheap "air taxi" service between small cities and on demand—an idea that looked cockamamie to me from the beginning—officially bit the dust.

Dollar Resurgence. Last year's big news stories bemoaned the weak dollar, and this year, it's the reverse. The U.S. dollar is up against most major foreign currencies: The pound, once over $2, is now below $1.50; the Canadian dollar, once flirting with par, is now at $1.22 to the U.S. dollar; and the euro is down from over $1.60 to less than $1.40. Clearly, other areas are feeling the economic pinch at least as much as we are. And although today's rates don't turn Canada, Europe, or the U.K. into bargain paradises, they do take the edge off costs for current visitors.

Security/Safety. Domestically, the big news is no news: Despite widespread reports of TSA ineptitude and long airport delays, the U.S. did not suffer any serious problems with travel safety and security, and the national safety record was outstanding. Overseas, however, local problems made travel questionable to several normally attractive areas: the big terrorist attack in India, political unrest in Thailand, and cruise-ship piracy off the coast of northeast Africa.

All in all, 2008 is not likely to be remembered as anyone's favorite year for travel. Maybe 2009 will be better.