Spring break in full swing, budget considered

Around the world, concern over rising prices is high on the list of concerns with travelers, but with spring break in full swing U.S. college students take to the beach. Somewhere. Maybe not where they initially had planned.

If the price of gas at the pump is cutting back on spring break travel you’d never know it at Miami’s South Beach, a perennial favorite among spring breakers. Crowds of party-goers are clogging the beaches by day and streets by night as thousands stream in. But higher fuel prices and a recovering economy are having an effect whether they come by air, land or sea.

Skyrocketing prices at the pumps are modifying plans and adding on additional costs for travelers. Gas prices nationwide are averaging right at $3.53 a gallon right now, up from $2.75 a year ago says GasBuddy.com who has been tracking prices since 2000.

As much as spring-breakers want to get away from world events, they can not escape the effects of a world in turmoil on several fronts. It’s been nothing but bad news coming from the middle east starting with Egypt unrest then Libya and the potential threat to oil supply that could result. As the massive earthquake then tsunami rocked Japan yet another wild card was thrown into the oil game.Airlines too are adding on or increasing fuel charges. In a revised profit forecast, the International Air Transport Association said it was downgrading its airline industry profit outlook for 2011 to $8.6 billion from the $9.1 billion it had estimated just last December.

Cruise lines, with a system in place to recoup rising fuel costs, are holding off on adding back in their rabidly unpopular fuel surcharges for the most part. Based on the price of crude oil, while the threshold for when a fuel surcharge can be added has already been exceeded, cruise lies are not anxious to pull the trigger in fear of slowing down solid bookings that are filling ships at a record pace.

Yesterday, we were in Fort Lauderdale at the premiere of Royal Caribbean’s short film series Ocean Views (#Oceanviews) where packed ships were full of spring breakers and their families at Port Everglades.

The Ocean Views series itself, directed and starring Jenny McCarthy and James Brolin along with some other big-time Hollywood stars is a comment on a world in transition. In the well-done 10-minute films, available on YouTube and the cruise line’s website, top names in entertainment are, well, working on a cruise ship, something none of them would have imagined a short time ago. Still, it’s where the future is headed and the social nature of a short film is right on track. In a question and answer session following the premiere, 40-year veteran Brolin admitted being a bit hesitant to take on the project in the beginning but acknowledged that “it felt right” after production began.

Filmed on Royal Caribbean’s Allure of the Seas, the largest cruise ship in the world, Brolin’s film has to do with multi-generational (3G) family groups, a segment much sought-after by travel sellers. 3G travel groups, backed by grandparent’s secure funding, have a better ability to weather unanticipated increases in travel costs. The all-inclusive nature of a cruise vacation is appealing too as grandparents get out the checkbook to pay.

Still, with spring break in full swing for many, bringing along the parents and grandparents is about the last thought in a spring-breakers mind. Adjustments in the budget category for students on South Beach this year means maybe another person or six in a car coming down here or in the hotel room, not always a bad thing.

Flickrphoto by Gubatron

Surge in oil prices signal talk of cruise line fuel surcharges

Financial experts are talking about oil prices that could surge to $220 a barrel. Political unrest, mainly concern over a violent power struggle in Libya, could disrupt oil supplies. As oil prices rise, airline, cruise line, and other transportation sectors consider taking action.

Most cruise lines have held off adding fuel surcharges but all have implementation plans in place once the decision is made to add them back on. Most have set somewhere between $70 and $100 per barrel as the mark at which the unpopular fee can be added on to bookings. The price of oil has risen above that level on several occasions but cruise lines have held back from adding the fee last charged in 2008.

Still, even before the current situation, speculation began on the possibility of more fuel surcharges late last year.
Some airlines, already increased fuel surcharges earlier this month and Jet Airways announced an increase today. Will others follow?

“Brent crude, one of the key benchmarks for crude oil, was up 3 percent to $109.70 a barrel in European trading Wednesday. CNBC reported that some traders think oil could surpass $200 a barrel if disruptions continue” reported the South Florida Business Journal.

Yesterday saw a fall of 8 to 13 percent as Royal Caribbean Cruises Ltd and Carnival Corp, among others were affected by tumbling stock prices.

Flickr photo by nestor galina

Oil prices and unrest in Egypt: Will they affect travel?

Airlines and Cruise lines have been watching the price of oil for quite some time. Fuel surcharges are unpopular fees and neither wants to add them on again if they can possibly avoid it. Some say fuel surcharges are inevitable and quite possibly the least of our worries.

Cruise lines, almost universally, have a ceiling of between $70 and $90 a barrel for oil. If the price reaches that point, they can add on a fuel surcharge. Prices have actually exceeded that threshold recently and cruise lines still did not add on the extra fee, fearful that the fee combined with the recovering economy could drive buyers away.

American Airlines added fuel surcharges of as much as $5 each way on many routes with United Continental Holdings Inc. adding a $3 each-way surcharge. Just Friday, British Airways said they would increase the fuel surcharge they already have in place.

“British Airways will increase its fuel surcharge on long haul services from Tuesday, February 8,” it said in a statement but not on short haul services.

How it will all play out is up for grabs right now but US Secretary of State Hillary Clinton is concerned about additional factors that could affect travel far greater than a fuel surcharge.

Flickr photo by ayman_ay17

Saying the Middle East “”is being battered by a perfect storm of powerful trends,” Clinton is concerned about unrest in the region.

“Leaders in the region may be able to hold back the tide for a little while, but not for long,” she said. “This is what has driven demonstrators into the streets of Tunis, Cairo and cities throughout the region. The status quo is simply not sustainable.”

If danger presents itself, travel warnings issued by the US Department of State could be extended to neighboring regions as well. If that happens, tour operators, airlines and cruise lines would probably react similarly to how the have this week, canceling service to Egypt.

On the other hand, tour operators in Spain can see an up side to the whole issue, as alternative ports of call and destinations found for booked travelers. This week, the German divisions of Thomas Cook and TUI Travel said they were seeing a trend for customers to switch Egypt holidays for ones to Spain or Turkey.

While a safe alternative is a good idea, it will hardly fulfill the lifelong dreams some have had for visiting Egypt, a trip that probably won’t happen any time soon.

The Travel Channel offers these tips for traveling overseas:

Cruise line to raise fuel surcharges. Others to follow?

It’s not just gas at the pump rising in price, cruise lines too are paying more for fuel and some are passing along the cost to passengers.

Cunard Line, already charging a fuel surcharge since last May, today announced an increase from $3.85 to $6.00 per person per day on new bookings made on or after December 31, 2010. The supplement is capped at $200 per person on longer voyages and includes all guests traveling.

Cruise lines have resisted adding back on the unpopular fuel surcharge even though fuel prices have exceeded the threshold they commonly notify guests it would take to resume the fee. Fuel surcharges started in 2007 when oil went above $100 per barrel but were removed in late 2008 after pricing went down below $70.

The current price of a barrel of crude oil is about $90.

Other signs point to seeing more of cruise line fuel surcharges too. Earlier this month, British Airways raised their fuel surcharge for the first time since 2008 on long-haul flights by 10 pounds (about $16) each way.

Still, the cruise industry does not want to add the fee back. When speaking of fuel surcharges earlier this month, Carnival Corp Vice Chairman and COO Howard Frank told USA Today, “I don’t see that in the cards … not based on where we see fuel for this year.”

Photo courtesy Cunard Line