It’s a new year and that means it’s time to make some travel predictions. Based on trends from last year and recent developments, we can expect a few changes.
1. Historically Low Asian Airfares
As Chinese carriers continue to pump capacity into the market, there has never been a better time to visit Asia. Fares are lower than they have ever been. This is likely to continue into 2019, especially given the slowing Chinese economy.
Fares are even low to traditionally expensive destinations such as Japan, provided you’re willing to possibly take connecting flights. The wildcard? If China and the US negotiate a trade deal that reduces the number of flights between the two countries, this could change.
Take advantage of these historically low fares and book now.
2. Lower Priced Premium Cabin Fares
Many airlines have been experimenting with discounted premium cabin fares. The fare rules are designed to attract leisure travelers while not interfering with their bread-and-butter business class revenues. Generally speaking, airlines would rather sell a business class seat than give it away as a frequent flier redemption or upgrade.
With that said, expect to see more sale fares. The flip side? Read the fine print! Unlike in the past, not all business class fares are fully refundable or easily changed.
3. Expect Another Round Of Devaluations
How much can frequent flier programs be devalued? We’re about to find out. In 2019, Singapore Airlines was the first to lead with a new round of devaluations.
Airlines have been pushing the envelope as to how far they can devalue frequent flier programs while maintaining consumer interest in them. I think they’re on the verge of killing the golden goose.
4. More Targeted Loyalty Promotions
Airlines and hotel loyalty programs have already gone too far in sucking the value out of their programs. I expect them to go even further. In response, more of the highest-valued business travelers are becoming “free agents” and end up booking the most convenient flight schedule and hotel location.
I expect to see targeted promotions attempting to lure these travelers back. Will they work? Probably not. Frequent travelers most highly value upgrades, and these are the benefits that have been pared back the most.
5. More Targeted Bank Promotions
It takes a generous sign-up bonus to convince people to sign up for yet another travel loyalty credit card. However, banks have been tightening the screws on allowing customers to sign up for cards to receive a new bonus repeatedly. They have probably over-corrected at this point, so I expect to see more targeted “win back” promotions in 2019 waiving the usual restrictive terms around repeat signup bonuses.
6. Rise Of Award Booking Services
Airline loyalty programs, such as frequent flier programs, are so complex that they have given rise to an industry of award booking and points consulting services. These inexpensive personalized concierge services, usually charging under $200 per ticket, help you navigate the complicated process of finding and booking award flights.
Why are these services likely to become more popular? They’re so good at securing the most desirable inventory for their clients that it’s hard for anyone who doesn’t do this full-time to compete.
7. More Sneaky Bundling
Online travel agents make almost no money selling plane tickets and the profits from selling hotel rooms can be marginal. This is why they have branched out into travel insurance, “experiences” such as city tours and other high-margin items. Watch carefully when you check out to ensure that no unwanted services have been unexpectedly bundled with your purchase.
8. More Junk Fees At Higher Costs
Resort fee. Destination surcharge. Premium location fee. When you travel, the price advertised is never actually the price anymore. Deceptive pricing that makes comparison shopping impossible is technically illegal, but the FTC is pretty toothless these days and has taken a laissez-faire approach to regulating the market.
This practice started in Las Vegas but has crept into most other US markets. The upshot? You can still buy a $19 hotel room in Vegas, plus a $35 nightly resort fee, a $4 energy surcharge and $15 per night for parking.
9. Easier Airline Comparison Shopping
Online travel agencies such as Expedia make very little money selling airline tickets, but bear the brunt of the backlash when consumers are blindsided by sneaky airline tricks like basic economy fares that don’t include a carry-on bag. The industry has responded by agreeing on a draft set of standards for how tickets are listed online (so consumers can effectively comparison shop and know what’s included). I expect this will be rolled out toward the end of next year.
10. Hawaii Fare Wars
With Southwest beginning service to Hawaii in 2019, I expect to see fare wars on these historically expensive routes. Fares might even drop so low that they drive a competitor out of the market (my money is on American Airlines, who has limited service from Phoenix and Los Angeles). Southwest typically starts small in a new market but rapidly scales routes when they are doing well.
Southwest is also taking delivery of new 737 aircraft in 2019, so they’ll have the ability to do this. Expect average fares to Hawaii to drop by as much as 30% as United, Delta, Alaska, and Hawaiian Airlines defend their market share from the West Coast.
11. Higher Hawaii Hotel Costs
Although it’s getting less expensive to fly to Hawaii, it’s getting more costly to stay once you arrive. Hawaii has limited capacity to absorb additional visitors, so be sure accommodations are available in your price range before you book.