2009 will be the year of the travel deal

updated 6:30 p.m. ET Dec. 15, 2008

NEW YORK - The value of the U.S. dollar is surging, gas prices are at their lowest levels in four years, and hotel rates are softening. If you can afford a vacation, 2009 will be "the year of travel deals," predicts Genevieve Shaw Brown, senior editor of Travelocity. "As long as the economic slowdown continues, deals will abound for people who do have discretionary income to travel."

Pauline Frommer, the guidebook writer, agreed. "Because of the sharp drop off in bookings, we're seeing some pretty deep discounts to just about everywhere," she said, citing as an example Walt Disney World's offer of seven nights for the price of four. "It's definitely going to be a buyers' market next year."

But even though travel is becoming more affordable, more people are expected to stay home due to the recession. The Travel Industry Association predicts a 1.3 percent drop in 2009 leisure travel.

Here are some details on these and other trends, like increased interest in presidential sightseeing, thanks to events like the Lincoln Bicentennial and the Jan. 20 inauguration of Barack Obama.

Travel abroad
In April, it cost $1.60 to buy a euro. As of mid-December, a euro cost just $1.36, meaning your dollar goes nearly 20 percent farther now.

Travel to Europe by Americans was down 4.8 percent in the first eight months of 2008 compared to the same period in 2007, according to the U.S. Bureau of Transportation Statistics. But now, "prices are coming way down and 2009 may be the year to plan your European trip," said Anne Banas, executive editor of SmarterTravel.com. She cited "two big reasons: the slow economy and the fact that the dollar is gaining on the euro."

The dollar is doing even better elsewhere. An Australian dollar costs just 67 cents in U.S. currency, down from nearly $1 this past summer, and Canadian dollars are worth just 80 (U.S.) cents now. Earlier this year, the Canadian dollar was worth more than a U.S. dollar. And the guidebook publisher Lonely Planet put Iceland on its top 10 destination list for 2009, citing great deals in a country where local currency and the national economy have collapsed.

Cars, trains and buses
Feel like a road trip? Go for it. Gas hasn't been this cheap in four years. A gallon of gas averaged $1.65 in mid-December, down from an all-time high of over $4 a gallon in July.

Between November 2007 and October, Americans drove 100 billion fewer miles than the same period a year earlier, according to the Federal Highway Administration. But Amtrak set a record for train ridership in its 2008 fiscal year — 28.7 million passengers, an 11 percent rise over the previous year.

Bus ridership also surged, with intercity bus departures rising nearly 10 percent, according to research from DePaul University's Chaddick Institute for Metropolitan Development. The study cited "large declines" in air and car travel and "the growing acceptance of bus travel among younger travelers and pleasure-oriented travelers." Bus options have grown beyond Greyhound to cheap Chinatown-to-Chinatown buses and trendy BoltBus, known for onboard wireless Internet service and online deals.

By air
Don't expect lower fuel prices to lower domestic airfares. Richard Seaney, CEO of FareCompare.com, predicts "stable high prices for domestic airfares. We had 30 airfare hikes between the summer of '07 and '08, which raised the price point 20 to 40 percent. I think that price point will stay stable in 2009."

The trend toward fewer flights may continue too. The Air Transport Association of America's outlook for 2009 noted that seating capacity has fallen between 10 and 12 percent nationally the past year, with a 25 to 50 percent decrease at many of the nation's top 100 airports. "All signs suggest that the schedule cuts prompted by high fuel prices in 2008 will deepen in 2009," ATA chief economist John Heimlich said.

Travelocity's Brown says consumers are choosing destinations based on airfare. For example, with fares to Honolulu up 18 percent, the city has fallen off Travelocity's top 10 spring break bookings.

With fewer flights and passengers, the Bureau of Transportation Statistics reported that on-time arrival rates are up, while flight cancellations, passenger complaints and lost baggage are down.

The good news: FareCompare's Seaney says "international travel is going to have the best deals in the last three to four years," due to decreases in fuel surcharges and some new start-up routes with introductory prices. For a peak summer trip to Europe, March is typically the best time to buy tickets, he said, but pricing may be volatile, so sign up for fare alerts.

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