Foreigners are still spending less in the U.S.

by Tom Johansmeyer on

Visitors from outside the United States came in and spent $9.9 billion in August … which sounds like a lot. Unfortunately, it’s down 21 percent from what they spent in August 2008, according to the U.S. Department of Commerce, as the travel slump continues to clamp wallets shut. The good news, though, is that spending by foreign visitors to the United States edged 1 percent higher from July.

Spending by visitors to the United States has fallen every month since 2008, but the really severe declines began in May. Year-over-year drops have been 20 percent or worse every month since then: -23 percent in May, -22 percent in June and July and -21 percent in August.

Most of the money came from “travel receipts,” which the Commerce Department defines as just about everything except the planes, trains, boats and so on that take travelers into and out of the country. This was good for $7.8 billion in August and includes food, lodging, gives and entertainment, among other categories. “Passenger fare receipts,” the travel money, brought $2.1 billion into the U.S. economy in August — off $700 million from the previous August.

So far this year, foreign visitors have poured $79.4 billion into the U.S. travel and tourism industry, which is $16.4 billion less than we saw at this point in 2008 (a decline of 17 percent).

In an unsurprising application of the “golden rule” — screw unto others, as they screw unto you — American travelers haven’t been spending as much abroad, either. Those of us heading out of the country this year have only spent $65.9 billion so far, down 12 percent ($9.3 billion) from last year. The result is a $13.5 billion trade surplus, which is $7.1 billion less favorable than it was at this time last year.

With the next monthly report from the Commerce Department, the numbers should start to change a bit — in fact, they should start to look better. Don’t be deceived by this subtle shift, which will gain momentum next year. After Septmeber, and the worldwide financial crisis, the travel industry was battered. So, as we cross the September threshold, we’ll be comparing current results to lower benchmarks. But, it will be nice to see something that at least looks positive.

British Airways computer glitch posts super low cost flights to India

by Katie Hammel on

Late Friday night, an alert went out on Twitter. Fares to Mumbai, India, from locations all over the US were being offered at rock bottom prices on British Airways. Flights from Chicago to Mumbai were just $550 per person.

I quickly logged on to Orbitz, selected my dates, and clicked purchase. I received an email from Orbitz confirming my purchase and then got to work planning the trip. My husband was out with friends and had left his cell phone at home, so I was hoping he’d come home just tipsy enough to not mind that I’d just bought $1100 worth of plane tickets without discussing it with him first. Besides, he is accustomed to me buying plane tickets on a whim, just because they are on sale.

Luckily, he was just as excited as I was….until Saturday morning, when I received an email from Orbitz saying that due to “limited quantities”, our order could not be fulfilled. As it turns out, it’s because the fare never should have existed. Someone at BA obviously messed up (how’d you like to be that person come Monday morning?) and entered the wrong number. The fare should have been more like $1550 per person. The fat finger fare was corrected, but not before several people, myself included, had bought tickets at the faulty price.

Word on the web is that tickets bought before the error was discovered will be honored, if they were purchased on British Airways. So far it seems that those of us who used Orbitz will be out of luck. Christopher Elliott posted the story on his blog, along with a response from the company. They say British Airways didn’t honor the purchases made with Orbitz ,so people who tried to book that way will not receive tickets.

This isn’t the first time a technical error has crushed some budget traveler’s dreams. In February, Northwest refused to honor $0 fares that were “purchased” online in error. So next time you see a fare that seems to good to be true, watch out. It might not be.

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Share your travel deals with friends with Yapta’s Frugal Travel Flaunts

by Katie Hammel on

Yapta, a website that tracks prices and helps you figure out when to book your airfare, has launched a new Facebook application called Frugal Travel Flaunts. When you find a deal on a flight and add it to “my trips”, you can choose to publish it on your Facebook page, alerting all your friends to your great find.

The idea behind the app is pretty solid. How many times have you found out about the amazing low-cost flight a friend found, but too late? Hearing that my friend spent just $300 on a round trip ticket from Chicago to London after she gets back from the trip doesn’t help me take advantage of the same deal. And likewise, I feel bad when friends ask why I didn’t share the news of my cheap fare purchase with them. The Frugal Travel Flaunts application allows you to use social media to alert your friends to good deals and helps you score your own with a few easy clicks.

Yapta will also help you get a credit if a flight you’ve already purchased drops in price. The site will alert you to the fare decrease with a link that sends you to the page on their site with credit info. You can also “flaunt” that on your Facebook page, though I see that as a less useful tool. Sharing news on killer deals is one thing, boasting about refunds is another – there’s a fine line between a flaunt and a taunt.

Vermont cab driver offers “pay what you want” fares

by Katie Hammel on

Websites like eBay and Priceline let consumers pay what they want for everything from designer gowns to airline tickets. Now, if you live in Essex, Vermont, you can exercise that same financial control when it comes to taxi fares. Eric Hagen, a part-time cab driver has been offering “pay what you want” rides in his Recession Ride Taxi since June.

Hagen not only offers passengers the right to pay whatever they feel is fair for the ride, he also applies his unique pricing model to cold drinks available in the cab, and offers a “frequent rider” punch card. After 7 paid rides, your next trip is free.

The local Days Inn now uses Hagen to transport guests to the airport whenever possible, and Hagen says he has been so successful that he’s thinking about expanding and hiring more drivers. He says no one has undercut him, though he has been paid with items like a $10 grocery card and a music CD.

Unfortunately, I doubt this business model could become widely popular, as taxi companies are strictly regulated and drivers are required to turn on their meters for every fare. But perhaps a few intrepid private cab operators will follow Hagen’s lead and bring “pay what you want” fares to more locations around the country.

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[via CNBC]

Favorable fares may be coming to a close

by Tom Johansmeyer on

In past years, Memorial Day signaled the end of sweetheart flight prices. This year, a sinking economy stretched the deals a bit longer, but experts say the good times may be coming to a close. Remember the problems last summer, with higher prices blamed on jet fuel? Well, we could see the cost of oil work the same dismal magic this summer.

Rick Seaney, CEO of FareCompare.com, cites recent fare increases of $10 to $20 per roundtrip as an indicator that we are the brink of an upswing. But, these are counterbalanced by new lows elsewhere. A recent survey by Travelocity shows ticket prices down 17 percent for trips between Memorial Day and Labor Day. So, buyers and sellers are locked in a silent struggle to determine how much your next vacation will cost.

With an eye out for possible deals, customers are waiting, booking their flights 86 days ahead instead of the usual 90. While this doesn’t seem like much, it takes a lot of last minute purchases to bring the average down.

Even if airline fares are coming back, you can still take advantage of the lows now. If you’re thinking about taking a vacation, stop … and take action instead.