Budget Travel Trends in 2008

The list of new baggage fees started emerging in 2007. It expanded this year, with some airlines charging for just one piece of checked luggage. But the fees don't end there. Some airlines now charge passengers who want to reserve seats online. You'll also pay for a blanket or pillow with some carriers. Will these fees continue to expand? Most experts think so. Airlines are so strapped financially that they must create new revenue streams any way possible. A few airlines such as Southwest are marketing an absence of fees to attract customers. Best strategies: Pack lightly (one carry-on bag if possible) and be aware of the fees before you travel.

In early summer, I paid $4.21 for a gallon of gasoline. In The Netherlands during that same time, prices topped $10.60 for a U.S. gallon. In early December, using a loyalty club discount, that same gallon sold for as little as $1.49 in the U.S.; down to $6.14 in The Netherlands. By year's end, some predicted gasoline prices in the United States could fall under one dollar a gallon in the months to come. These changing costs can shape the strategy of a budget traveler flexible enough to put the trends to work. Suddenly, that car trip off the beaten path looks much more attractive. For years now, innkeepers have been offering fuel rebates to their guests. That might go away in 2009. Let's hope they're not needed anymore.

For several years, American travelers have been complaining about the shrinking value of their dollars overseas. Europe was the place where it was most evident, primarily against the euro and the pound sterling. Things changed dramatically in 2008, with the pound at $1.47 by December (it had been well past $2) and the euro at $1.27 (from $1.44). The U.S. dollar gained against the Canadian dollar, too. Suddenly, trips to places trading in these currencies became much more affordable for Americans. Trips to America became less affordable for citizens of the EU, Great Britain or Canada. As with fuel costs, these developments are worth watching as you plan trips in 2009.

J.D. Power and Associates tracks customer satisfaction. Their well-read lists have been in the public marketplace for 12 years. So-called Mom-and-Pop hotels (many of which offer fine quality) were not surveyed. But for the chain hotels, there was bad news in 2008: Overall satisfaction with the economy/budget hotel segment declined significantly, "posting the largest year-over-year decrease of any segment since the inception of the study." You can use Internet tools to evaluate individual properties in any category or chain. Many times, the reputation of a chain has little to do with what you might find in a given location.

With a flurry of new airline fees and rising gasoline prices for much of the year, rail travel in many parts of the world gained some renewed popularity among budget travelers. In Europe, people on a tight budget have relied on rail passes for years. They buy unlimited travel for a set time and geographic area. Rail passes are not always the cheapest way to get around, so some planning is necessary to determine if savings await in the rail pass store.

It wasn't the biggest travel headline of 2008, so you might have missed the announcement in March about the so-called Open Skies Agreement. For many years, trans-Atlantic routes were available only between certain (usually large) cities. The U.S. made agreements individually with European destinations. Now, the open market dictates all trans-Atlantic routes between the United States and Europe. This should open more routes, greater competition and (in theory) some lower prices. The first place you'll probably notice change is London Heathrow Airport, where a larger number of carriers are likely to begin service. But look for smaller airports on both sides of the Atlantic to offer new alternatives.

Remember the days when it was easy to redeem reward miles and book tickets? Those days are fading away. Let's say your airline wants 85,000 frequent flier miles for a round trip ticket between North America and Asia. Increasingly, such a frequent flier booking is nearly unavailable. If you want to part with 170,000 miles, suddenly many more options become available. Some carriers offer to let you pay with a combination of cash and miles. One more thing: the very act of redeeming the miles now requires a service fee on many carriers. These developments will put so-called loyalty programs to the supreme test. Travelers without huge frequent flier balances are likely to shop for low fares rather than bother with awards programs.

Many budget travelers are also busy people, and they don't have hours to spend on the Internet in search of available frequent flier award tickets or the lowest airfare. Tracking software for such tasks is improving. For example, Yapta.com enables travelers to tag a given route and receive email notification when the airfare changes or additional rewards bookings become available.

When times are tough, the travel industry's public relations machine works overtime to find new ways for filling tours, seats and rooms. In 2008, with travel to far-away places proving expensive, someone coined the word staycation. The idea is to take a vacation close to home, perhaps even staying in your own bed at night while visiting a local winter wonderland by day. The word is a little too cute for some, but a majority of respondents to our very unscientific poll thought staycations could be a good idea.

Hotel bills are growing more outrageous by the year. In some places, it's no longer all that unusual to spend $400 USD/night for a fairly ordinary hotel room. Naturally, budget travelers find these rates unacceptable. Necessity being the mother of invention, some have turned to the convenience of the Internet to arrange homestays in the locations they plan to visit. This could be a simple hosting of guests that is later reciprocated, or an actual home exchange that involves swapping domiciles for a few weeks. The logistics aren't always easy to work out, and for some it becomes impractical. But if you can make it work, this type of arrangement is budget travel in its purest form.