Two of the more notable trends in
travel during the last year had to do
with rising prices — specifically rising energy prices.
First, of course, was the spike in
gasoline prices, which dominated the headlines throughout the peak driving season, from
Memorial Day to Labor Day, and not just in the
And as the airlines know well, when regular
unleaded goes up, so does jet fuel. The rising
price of fuel was a principal reason that the
airlines started raising fares earlier this year.
While airlines often fail to match each other, requiring an occasional rollback, most of the increases have been sticking, and the result has
been a steady rise in ticket prices, as reflected
in airline yields.
Yield, or revenue per passenger, is measured
monthly by the Air Transport Association, on
the basis of the results of the seven largest U.S.
airlines (excluding Southwest).
Thoughout the first half of the year, yields
have risen every month compared with the corresponding months of 2005, and the increase
stayed in double digits from February onward.
From January through June, the average
yield rose from 12. 24 cents per mile to 13. 36
cents, which means the average fare (
excluding taxes) for a hypothetical 1,000-mile trip had
risen from $122.40 to $133.60, an increase of
9% in six months.
Part of this increase reflects the usual seasonal variation, but only a part of it. Yields in
June were up 12.4% over the same month of
2005, and July’s increase came to 11.4%.
Clearly, fares are rising.
That’s relatively good news for the cash-strapped airlines, but it could be troubling news
for travelers and travel sellers, because it’s affect-
KWill higher prices
hurt travel sales?
By Marilee Crocker
aren McCrink, vacation manager for Atlas Travel International, a fast-grow-
ing, predominantly corporate agency in Milford, Mass., is one of those
agents who’s beginning to get concerned about rising prices.
One arena that concerns McCrink
is school vacation travel.
“Right now I’m looking at February
school vacations prices. I don’t want
to even call people [because the prices
are so high].
“For a family of five, it’s going to be
expensive,” McCrink said.
HIGH PRICES, LOW COMMISSIONS?
Speaking more generally, McCrink
said that if prices go up too high, “the
people who are on the border of being able to afford a vacation probably
will not travel.”
“The people who have money will
travel anyway,” she added, “just not
as extravagantly. … For people who
are serious about traveling and saving money, it might change the type
of vacation and bring down the costs,
and thus my commission. …
“At the luxury level, we might see
fewer vacations, or we might have
people who usually do a couple of
trips now doing one. I don’t see it as
LEISURE SALES STATIC THIS YEAR
McCrink added that prices could
already be hurting leisure sales more
than she had realized.
High prices could
affect families’ plans
for winter vacations.
She noted that while Atlas Travel
International had grown greatly on
the corporate side, leisure sales were
only slightly higher than a year ago.
AGENT FEES COMPOUND COST ISSUE
In addition to worrying about sup-
plier prices for travel services, some
agents are wary of the impact of their
own service fees, an issue that came to
the fore when airlines imposed $3.50
segment fees for bookings through
nonpreferred distribution systems.
Earl Rogers, owner and general
manager of the Duluth (Minn.) Travel Agency, speculated that many agencies won’t be able to absorb the $3.50
per segment fee and will have to pass
it on to the consumer.
“We’ve already got service fees. At
what point do [consumers] say, ‘The
heck with you; I’m going online?’”
Deborah Mitchell, manager of
Ambassador Travel in Seaford, Del.,
isn’t worried yet. For one thing,
she said, there are still plenty of
“Some air fares are back up to
where they were maybe 10 to 15 years
ago, but they’re not horrible.”
Even if prices go up this winter and
spring, she’s not concerned, Mitchell
“I still see that there’s a lot of value