More Rooms and Surcharges
Still Driving Up Prices
Conventional wisdom: Rental cars will be reasonably priced. Rates will edge up about 3 percent, says Dean Gianoukos, an analyst at J.P. Morgan. Its nothing, he says. I dont think the consumer is going to get taken to the dry cleaners this year. Drivers will continue to pay an average daily rate of about $42 a day an amount, Gianoukos points out, for which you cant even rent a tuxedo.
My prediction: Yeah, the cars will be priced reasonably, but that doesnt mean your bill is going to reflect that. Car rental companies are growing revenues by making their computer systems more efficient and by passing various fees and taxes along to travelers. The very same fees they used to cover themselves as a cost of doing business. I wouldnt be shocked if car rental firms came up with still more creative surcharges in 2000. Hey, what are a few percentage points among friends?
Conventional wisdom: This is the year to cruise. There are more berths available than ever before, says Paul Motter, publisher of the Internet cruise magazine Cruisemates.com. The cruise lines are on a big campaign to build new ships. The shipyards are backed up by four to five years. Put differently, theres lots of new space on ships, which will translate into lower prices. On average, Motter expects rates to fall 10 to 20 percent from 1999 for people who know where to look. It may take a while, but prices will come back up, he adds.
My prediction: Dont be fooled. Even though there will be lots of bargains out there, the cost of a cruise doesnt include extras like air, excursions, amenities and drinks. The cruise industry sure looks generous, practically giving away their floating vacations, but you can bet it will make up for it on the other end. The bottom line is, a cruise remains a big-ticket purchase that enriches an industry with a penchant for polluting the oceans, exploiting workers and dodging taxes.
Conventional wisdom: Airlines have reformed. Humbled by the beginning of a downturn in earnings, theyre putting passengers first and keeping fare increases to a minimum. As load factors taper off and earnings slump, prices are expected to hold steady maybe rise just a little in 2000. Fares will be up 3 percent, predicts Rolfe Shellenberger, an analyst with Runzheimer International. As a whole, I think the year is going to be a buyers market.
My prediction: Expecting the incumbent airlines to change their ways is utter folly. The deregulated carriers modus operandi is profits first. Whatever fare increases they can get away with, they will. Whatever cutbacks they can get away with, they will. You thought 28 inches of seat room was uncomfortable? Wait until the airlines figure out a way to add standing room to their planes.
So will 2000 be a good year for the traveler or not? Wrong question. Its more an issue of which industry segment will torment customers the most. If you ask me, I think the competition has never been closer.
Christopher Elliott, a k a The Crabby Traveler, is a writer based in Annapolis, Md. His column appears on Tuesdays.
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