Arthur Frommer: Growth brings good, bad news in travel

10/10/2010 12:00 AM

10/10/2010 12:38 AM

The news in travel is of growth. Southwest Airlines has agreed to acquire AirTran, which gives it a major presence in Atlanta; the city of Las Vegas is about to acquire a new (and totally unnecessary) 3,000- room hotel; and airfares for Thanksgiving and Christmas periods are zooming out of sight.

Though Southwest's growth is regarded as scary by some observers (they fear the aggressive Southwest will no longer have to compete as fiercely as before), the acquisition also means that passengers will no longer have to pay to check luggage aboard the flights formerly operated by AirTran. The chairman of Southwest has announced that if the acquisition goes through, he will eliminate luggage-checking fees from the flights operated by AirTran, and both airlines (now merged into one) will be free of baggage charges. Since those costs have now been raised by all other airlines (except JetBlue) to a punishing $25 for the first bag and $35 for the second one, on one-way flights, there will now be an extra reason for cost-conscious passengers to fly on Southwest and JetBlue. Let's all reward the airlines that refuse to charge those pesky fees!

Las Vegas hotel glut

Growth in the hotel capacity of Las Vegas is now becoming ridiculous. Last year, just before Christmas, Las Vegas acquired several thousands of new hotel rooms (in the Aria, Vdara and Mandarin Oriental hotels) in a project known as City Center — and Vegas went into a serious condition of hotel glut. Occupancy rates plunged, and so did hotel prices.

Would you believe that this Christmas, Las Vegas is about to welcome another new 3,000-room hotel, the Cosmopolitan? Owned by Deutsche Bank, which picked it up when the former owners could not pay their mortgage installments, and financed in construction by the giant German financial organization, the Cosmopolitan is totally unneeded in Las Vegas. Its opening will dump another 3,000 deluxe rooms on a city that is awash in hotels. After a "slow" opening in mid-December, the Cosmopolitan will open for good on Jan. 1, 2011, when you will be able to obtain (because of over-capacity in hotels) some of the lowest prices for high-quality rooms in the history of tourism. When, in 2011, you call for a reservation at any Vegas hotel, bargain hard — you're in a buyer's market of unimaginable proportions.

High holiday airfares

What else is growing in travel? Answer: The cost of airfares on the popular dates for Thanksgiving and Christmas flights. In these times of economic slowdown, the airlines have cut their capacity so drastically that many of the most popular dates are on the brink of being sold out, and remaining seats are being priced at levels that we've never before seen in travel. One of the cost-cutting carriers (out of sensitivity, I won't name it) is charging a whopping $1,400 for a round-trip flight between New York and Aruba for the Christmas period. Another is charging $1,300 for round-trip between Los Angeles and Orlando. Still others are quoting $1,000 or so for Thanksgiving weekend round-trips within the U.S., to people whose jobs or college schedules require that they travel on the most popular dates.

Starting now, an increasing number of financially hard-pressed Americans will either have to stay at home or schedule their holiday travels for many, many days before and after Thanksgiving and Christmas.

I hate to be the bearer of bad news (and there's considerable good news in other fields of travel), but it's important to be forewarned.

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