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Summer Travel Is Looking Good! Evidence is mounting the bleeding is over and the hotel business has bottomed out. Predictions for summer travel are good with Memorial Day road traffic expected to surpass 2008 levels. Tuesday, May 12, 2009 Glenn Haussman

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Let the healing begin.

While value will continue to reign supreme during the coming summer season, there are more indices than ever the travel business is ready to rebound. Though no one is saying the good times are back quite yet, it does look as if the industry has hit bottom.

A combination of multiple factors is finally aligning, which means this summer should be hot in more ways than one. As the mercury rises, expect hotel rooms to fill up, and in some locations pricing power may even begin to return.

It’s a confluence of real change, pent-up demand and a psychological shift by the consumer that’s expected to propel the rebound, as well as lower gas prices than last year.

In fact, AAA announced this morning that it’s predicting an increase of 1.5 percent in the number of Americans traveling on vacation during the Memorial Day weekend this year compared to 2008. In all, 32.4 million travelers are expected to take a trip of 50 or more miles away from home. Last year, 31.9 million Americans traveled during the same period.

"Last year, soaring gas prices and a deteriorating economy resulted in far fewer trips being taken than had been forecasted," said Robert L. Darbelnet, AAA President & CEO, this morning. "The good news is, sharply lower gasoline prices and plentiful travel bargains have Americans feeling better about taking a road trip this summer, which should help tourism-based economic activity throughout the nation.”

Part of the resurgence in travel is the incredible deals that hotels and airlines are floating to the public in order to get people to travel again. And it seems to be working. Yesterday, at the 5th Annual Leisure Travel Summit hosted by Best Western International, experts continually cited an emphasis on deals and providing value as a way to appeal to vacationers.

“I have never seen the deals I am seeing today in my entire career,” said Betsy Sell, managing director, AAA Travel, at yesterday’s summit. “I saw some cruise deals out of LA for a reposition cruise that cost $119 for three days. Deals plus value with such amenities as free breakfast and WiFi and extra loyalty points [will drive business],” said Sell, noting that many of the best deal days may have passed.

Dorothy Dowling, SVP marketing and sales with Best Western International, agrees. “Consumer confidence numbers are up and lots of hotel companies saw some positive year-over-year results in April. While there certainly will be deals through 2009, they are real destination-specific.”

Dowling said confidence is rising, particularly in two- to three-night stays that total between $300-$400 per stay, Best Western’s market niche. “We’ll see more frequent travel running two to three nights per stay this summer. And they’ll come by car, just like the 1960s.”

Amy Graff, Best Western’s Leisure Travel expert, said since gas prices are so much lower than last year, it’s helping to kickstart the desire to pack up the kids in the family car and hit the highways. “The road trip is back. Predictions are gas will be $2.37 this summer, and that’s significantly lower than last summer [when gas was hovering around $4 per gallon] so a road trip is a great deal. There is a definite segment of the population that is excited about their country. People want to get out and explore the nooks and crannies of America.”

She added that, with the state of the U.S. economy still fuzzy, people are seeking the familiar. And a road trip breeds that sense of familiarity and comfort.

Carl Schwartz, Chief Travel Officer with Cheapflights.com, said there is a sense things are getting back to normal. “There is definitely a return to a sense of normalcy. Last year the message to the traveler was ‘you can’t afford to go’. This year it’s ‘you’re an idiot not to travel’,” said Schwartz, adding that airlines will continue to move to a la carte pricing to lure people to seemingly cheaper fares. He also noted that extra fees for checked bags will continue…a policy he is not against, but seems to be the root cause of traveler consternation these days. He said he’d rather pay less for a ticket and bring a bag with him on the plane.

The average distance traveled by Americans this Memorial Day holiday weekend is forecast to be approximately 620 miles, AAA reported. This is a slight decrease from 2008 when the average distance traveled was expected to be 640 miles. Average spending is estimated to be $1,052 this Memorial Day. Nearly 60 percent of Americans will spend time with friends and relatives over the holiday, and traveling as a family will be the most popular way to go, with 34 percent of travelers making a journey with children or other family members.

According to AAA's Leisure Travel Index, air fares over the Memorial Day holiday weekend are expected to decrease four percent from last year, as air passengers will pay an average $176. Car rental rates will drop lower, with consumers paying an average of $43 per day compared to $45 a year ago, a decrease of three percent. Hotel rates for AAA Three Diamond lodgings are expected to be 12 percent less than last year with travelers spending an average of $142 per night. Travelers planning to stay at AAA Two Diamond hotels will pay an average of $104 per night, seven percent less than a year ago.