Travelers Win Some, Lose Some

Hard economic times are proving a two-edged sword for travelers as they face cutbacks in some areas and some enhanced perks in others. Hotels are cutting staff and some amenities to slash spending, for example, while airlines are putting more money into items like food to entice more high-level business-class and first-class passengers.

In the hotel business, the logic is straightforward. As the economy stumbles, fewer people are traveling, making spending cuts necessary. Many of the economies are small, like fewer toiletries and towels in the rooms, fewer selections at the breakfast buffet, and cutting out the all-night coffee bar in the lobby. Other dollar-stretching moves may affect hotel service—staff cutbacks may mean longer lines at check-out and check-in, for example. On the plus side, hotels are also cutting back on room rates to meet the lowered demand. The average daily room rate in the U.S. dropped 2.7% last year, and the drop in rates on luxury rooms was even steeper, at 6.6%.

In the airline industry, food and service is a primary area of competition for high-margin business-class and first-class passengers, so airlines are trying to woo them by beefing up their menus. The six U.S. airlines that fly internationally jacked up their spending on food by 8.5% in the third quarter of 2008, the biggest increase in any spending category besides fuel. In addition, many international airlines are hiring big-name chefs to plan and design in-flight menus. Unfortunately, coach passengers will generally not be on the receiving end of the airlines’ new emphasis on better in-flight food.