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Summer travel: Fares, room rates spike
For the first time since 9/11, the peak travel season looks to be hitting on all cylinders.
May 4, 2005: 4:56 PM EDT
By Les Christie, CNN/Money staff writer

NEW YORK (CNN/Money) - The message from the travel industry this spring: Americans are on the road again.

"Despite terrorist threats, fuel price rises, and a weak dollar," says Amy Ziff, roving editor for Travelocity, "Americans feel free to travel again, especially to Europe, where they've been going in increasing numbers."

According to the European Travel Commission, a record 14 million Americans will visit Europe this year, surpassing the 13.5 million who ventured there in 2000.

This is good news for the travel industry. For travelers, though, heightened demand has pushed up prices across the board.

An annual AAA survey of domestic travel costs reports that per diem prices are up 5 percent over last year. The story is even worse overseas. The dollar has lost 6 percent of its value against the euro, and that doesn't account for other price increases.

So far, high fuel prices have had little impact on fares, but just last week American Airlines announced it would add fuel surcharges of $5 a ticket for domestic flights, more for international ones. Other airlines will likely follow suit.

Hotel prices are up already. John Walsh, spokesman for Marriott International, reports that average daily rates (ADRs) at Marriott (domestic and international) are up an average of 7 percent this year. The AAA reports that domestic lodging for a family of four costs nearly 4 percent more this year and now average $129 a night.

Lower room inventories also means chains offer fewer bookings to such Internet bidding sites as Priceline.com.

"When the economy was not doing well you could find great rates there," says Walsh. "Now, it's hard to find bargains."

Heavy demand for airline seats and hotel rooms has many travel professionals advising vacationers to book well in advance. Procrastinators may have to pay more or settle for an inconvenient flight.

In the past, prices tended to drop as the departure dates grew near as airlines scrambled to fill empty seats. This year, prices are rising as travelers compete for scarce berths.

Sean Comey, spokesman for AAA of Northern California, Nevada, and Utah, reports that the best air deals are available 90 to 120 days in advance. He himself was stung by not booking early; it cost him an extra $300 each for two cruise tickets because he waited too long.

Ultimately, vacationers may have a tough time finding big savings this year, but that will not necessarily discourage the search.

"Some travelers are such bargain hunters," says Ziff, "that if the price is $25 different between Paris and Rome, they change their destination."

Savings strategies

Pay in dollars. The dollar's weakness has proved a boon for companies offering European tours and cruises. Americans can pay in dollars for a complete package. Other than shopping, they incur few other expenses -- or surprises.

Explore alternatives to the euro-zone. The dollar has held up better against some national currencies outside the euro-zone, making a beach vacation in, say Croatia, more reasonable than one just across the Adriatic in Italy. U.S. neighbors Mexico and Canada are comparative bargains.

Stay at business hotels. Comey says some destination cities in the United States are more affordable than many realize, compared with many of the country's main tourist centers such as Las Vegas and Orlando. San Francisco, for example, has many excellent hotels that charge less than $150 a night. In cities that cater to business travelers, downtown hotels lure leisure travelers with generous weekend rates.

Travel to off-season destinations. You can save on summer travel by staying at winter resorts. "Many ski reports have great summer programs," says Ziff, "with terrific facilities and wilderness at your door, but much less expensive than in ski season."

Use the Internet to plan and book. Travel planning online continues to grow in popularity; nearly 45 million Americans booked at least one service on the Internet last year, according to the Travel Industry Association (TIA).

Ziff says Travelocity, like other online vendors, offers what she calls "dynamic packages." These take advantage of excess inventory at hotels or airlines, who will sometimes offer rooms or airplane seats in bulk to Travelocity at a much lower prices than those they advertise to the public.

Trends for 2005

Educational excursions. Many Americans are opting for vacations that incorporate learning. Literary tours, anthropological travel -- even cooking lessons -- are all gaining popularity.

Short trips. A three-day weekend can refresh and renew almost as well as a week off. These are perfect for the hard-charging executives who just can't tear themselves away from their responsibilities.

Getting the family together. Family reunions account for an increasing share of travel. The TIA reports that 34 percent of Americans have traveled to a family reunion in the past three years. But increasingly, families are not just getting together, they're traveling together.

Multigenerational travel takes several forms: Three generations may tour or cruise together, rent out a house as a family, or settle in en masse at a resort. Such trips enable everyone to "vacation at our own speed, but come together for meals," says Ziff.

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For a look at the ins and outs of renting a villa, click here.

Looking for the best places to vacation, click here.

Click here for some great family vacations.

Click here for some vacations where you can learn about different cultures.  Top of page

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