The Other European Crisis

THE MIDDLE SEAT

• April 12, 2012

   

  Olympic-Sized Airfares to Many Summer Destinations; Hotel Room Rates Also Rise

 

Summer vacationers planning a trip across the pond are seeing sky-high prices in many European cities, with airfares 11% higher, on average, than 2011, according to searches on online travel agency Kayak.com.


Ticket prices to Europe this summer have averaged double the price of last year so far, according to Kayak.com. Summer travelers are in for real sticker shock this year. Scott McCartney on Lunch Break looks at how early bookers are coping. Photo: AP
Tickets from the U.S. to Paris this summer priced in January were 22% higher than the same time the year before, according to Kayak, which searches airlines and online travel agencies for the best prices. London was up 14%, and travel experts say prices will go much higher as we get closer to the Summer Olympics, which run July 27 to Aug. 12. Some trans-Atlantic round-trips are currently $3,000 or more.
The Olympics always yield lots of interest and lots of sticker shock for travelers, says Steve Danishek, president of TMA Travel in Seattle. "It is worse than the Super Bowl," he said.
It's the same story with hotels. The average price found in Kayak searches for London between Memorial Day and Labor Day was $241, up 24% from the same period last year. Munich and Stockholm are both up more than 20% compared with last year.
Big events like the Olympics are pushing costs up, but a combination of high oil prices, an improving economy and reduced airline capacity also play a role.
The number of trans-Atlantic airline flights is expected to be down about 2.5% this summer, says Craig Jenks, president of Airline/Aircraft Projects Inc., a consulting firm. Airlines made deep cuts in winter because of high fuel prices, he says, and don't have all the planes they might want in summer to meet demand. Fewer seats to sell means airlines can push prices higher.
Instead, smart shoppers are looking at traditionally less-popular cities than the typical "Grand Circle" stops such as London, Paris and Rome. Airfares and hotel rates in Istanbul are down about 4% to 5%, according to Kayak. Economically troubled countries offer some hotel bargains—rates are down in many cities in Spain, Portugal and Ireland, for example.
Athens, epicenter of the Greek financial crisis, offers particular bargain-hunting opportunities. Hotel prices are down 22%, crowds should be smaller and businesses are particularly hungry for tourist euros. That said, airfare may be higher because airlines have reduced the number of flights between the U.S. to just 14 a week from 26.

Some of the planes were moved to other markets. One beneficiary is Zurich, Mr. Jenks found, where seat capacity is up 11% this summer.
Travel agencies say consumers have started to balk at sky-high airfares and increasingly opt for cheaper destinations. That may spur some pullback in air prices. If so, perhaps now is the best time to buy if you do want to go to Europe this summer. While it is hard to find a trans-Atlantic ticket for less than $1,000 round-trip-something possible before oil spiked—plentiful flights can be had under $1,500.
Still, American Airlines and Virgin Atlantic prices for New York-London summer trips run up to $1,800 for some dates in June and July. Delta's prices for an Atlanta-Paris round-trip run as high as $3,339 in coach in June, though most itineraries are still around $1,500 to $1,700.
Keep in mind that Europe has extensive regional service from ultracheap discount airlines. You can often save by flying to a city with cheaper airfare, then booking a ticket on a discounter such as easyJet, EZJ.LN +4.33% Ryanair or Vueling. But plan carefully: Baggage charges on discounters can be far higher than full-service airlines, and out-of-the-way airports can mean long bus rides and added expense. Both can wipe out savings and add considerable travel time.

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José Luis Merino
Travel agencies say many summer travelers keep to a pretty consistent budget. When they are offered discounts, they tend not to spend less but to trade up to something nicer that is still within their budget. And so with prices higher this year, that may mean trading down. Mexican beach destinations are cheaper than Florida, for example, and budget-minded travelers head where the deals are.
Affordable Destinations Closer to Home
Forget Paris. We'll always have Philadelphia.
With sky-high airline prices to Europe, Steve Danishek, president of TMA Travel in Seattle, says many of his customers are instead inquiring about California, Arizona, Las Vegas and Hawaii for summer getaways.
Overall, flights within the U.S. are priced about 3% higher than last year, according to Travelocity. But travel agencies say that in markets where airfares have declined, popularity for summer vacations has increased. Ticket prices between Los Angeles and Philadelphia for this summer are down about 20% compared with summer bookings at this time last year, thanks in part to new flights from Virgin America. Popularity of summer travel on that route, based on bookings, is up about 80%, Travelocity said.
Chicago to Boston has seen fares drop 29% on average, and bookings are up 33% for summer, Travelocity said.
"People are being more careful," said Joe Megibow, Expedia.com EXPE +0.25% .'s general manager. "We're seeing a shift in behavior to some of the more resort-y markets where there are deals to be had."
Among routes where sales have grown as ticket prices have declined for summer: New York to San Francisco; Orlando to Los Angeles; and New York to Orlando; as well as trips to the Caribbean and Cancun.
Expedia says it has seen hotel-room sales outpace airline tickets, suggesting that more travelers are opting to stay closer to home and drive to destinations this summer. Among destinations seeing more interest, Expedia said, are Ocean City, Md., and Myrtle Beach, S.C.
One age-old trick of finding low fares seems to be making a comeback: using alternate airports in cities, Mr. Megibow said. Particularly in New York and Los Angeles, there has been growing disparity in pricing between primary and secondary airports.
Another old-school way to save: Check prices for air and hotel packages. Hotels and occasionally airlines offer cheaper prices when actual rates are bundled together so competitors can't see and match the discounts.
Write to Scott McCartney at middleseat@wsj.com

A version of this article appeared April 12, 2012, on page D1 in some U.S. editions of The Wall Street Journal, with the headline: The Other European Crisis
COPY : http://online.wsj.com/