Travel industry battered by world crises says CNN

A recent report from CNN says that the spate of world crises that have occurred in the first three months of the year has hit the travel industry especially hard. Natural disasters and political unrest have left many travelers rethinking their plans or cancelling trips altogether as they scramble to avoid a host of issues across the globe.

The earthquake and tsunami in Japan, coupled with fears of radiation and a potential nuclear meltdown in power plants there, has significantly reduced demand for travel to that country. It has gotten so bad that Delta Airlines has announced that they are cutting capacity to Tokyo’s Narita International Airport by as much as 20% through May, and suspending flights to another regional airport altogether.

Similarly, travel to Northern Africa and the Middle East has also dropped significantly as political upheaval has spread across that region. It hasn’t just been the airlines that have felt the pinch however, as disruption in travel to Bahrain, Tunisia, and most importantly Egypt, has put a dent in the cruise industry too. According to Carnival Cruise Lines more than 280 of their cruises have seen a change in their itineraries thanks to issues in the Middle East. They estimate a loss of $44 million so far, and the region hasn’t stabilized just yet.

The Middle East unrest has brought another unwelcome side effect to the travel industry as well. Any threat to the distribution of oil means an increase in prices, which is always passed on to the consumer. Soaring oil prices has led to an increase in the cost of airfares, and the dreaded term “fuel surcharge” has reared its ugly head once again too. With the busy summer travel season still ahead, it seems unlikely that oil prices will be coming down again anytime soon.

2011 is certainly off to a turbulent start. If the first few months are any indication, we could be in for one very memorable, but chaotic, year. Has any of the recent global calamities caused you to change your plans? Are you now going elsewhere because of recent events? Worse yet, have you canceled your plans to travel this year altogether?

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: