What to expect in 2008

I see more problems than solutions for travel in 2008. I'm no Alan Greenspan, but my take is that the economy is headed for trouble. The continued high oil prices, federal budget squeezes, erosion of good middle-class jobs, mortgage problems, and weak dollar add up, for me, to a slowdown in travel by ordinary Americans. The upside to this is, of course, the possibility of sales and other price-cutting by suppliers who see a less robust marketplace than in 2007.

Best buys

I still see opportunities to travel without breaking your budget, even if times are tight:

Cruising will remain the best-buy major vacation option—at least for those interested in that sort of travel. Even with fuel surcharges of $5 a day or so, I expect cruise prices won't go up as much as the prices for just about all other travel. And the addition of several more new megaships will keep plenty of cabins available, just about anywhere in the world.

Vacation rentals—especially budget locations—will continue to offer the best antidote to steadily climbing hotel rates. Fortunately, the Internet makes finding good rentals extremely easy, anywhere in the world.

Airlines

As usual, air travel will remain the source of most travelers' woes. I see little relief any time soon.

The good news is that, even after some increases, the lowest rung of airfares will remain at reasonable levels. However, you may find it a bit harder to score seats at the lowest fares, on the flights and routes you want, as the U.S. airlines continue to keep a lid on capacity.

The coach/economy product on most airlines will remain at its dismally low quality level. I don't see anything coming that would lead to fewer delays, missed connections, or lost bags. The focus of competition in the economy cabin will be on in-flight electronics—entertainment, games, and Internet access—rather than improved comfort or reliability.

No airline of importance seems to be interested in a sensibly priced premium-economy option. As before, you'll be forced to choose between a really lousy cheap product in economy and a good business- or first-class product at astronomical prices.

The industry is again talking up mergers among several giant lines. Although the advocates tout improved service to consumers, the real objectives of mergers will be short-term profits for the hedge funds and speculators holding airline stocks and reduced competition, leading to higher fares. Make no mistake: Mergers are not consumer-friendly.

Frequent flyer programs will approach the level of outright scams. Sure, you'll get more miles—but try to use them! Award scales will creep up, and seats will be unavailable, anyway. This situation cries out for some governmental enforcement of truth-in-advertising rules.

I don't see any major new startup lines this year. And the few new all-business-class transatlantic lines will find tough sledding against increased competition from the giants.

My guess is that the airlines will successfully lobby against any federal passengers bill of rights with teeth. Something may pass, but it will be window dressing.

A combination of entrenched interests—the business aviation lobby, misguided general aviation pilots, controllers, and some members of Congress—will again kill any meaningful attempt to fix air traffic control pricing and procedures for the long term. However, the FAA will take what steps it can to reduce delays and congestion.

Hotels

Rates have nowhere to go but up. And look for more hidden extra fees.

Europe

The weak dollar didn't have much of an impact last year, but it will put a major damper on European travel by Americans in 2008. In response, look for high- and medium-priced European hotels to offer some pretty attractive guaranteed dollar rates for this summer. But even half-off an astronomical base rate can still be out of reach for many travelers.