Guess what? The travel industry guessed wrong on the economic recovery and travelers' willingness to pay up for rising energy prices. That means you'd better sharpen your travel-buying skills if you don't want to get caught in the resulting backlash and confusion.

When airlines began hiking fares early in January, oil was trading for $88 a barrel on New York markets. Six separate $10 roundtrip increases later, on March 1, oil hit $100 a barrel for the first time since 2008. But four additional attempted increases in the last 45 days have failed, and another potential price hike, initiated Monday by Delta Air Lines, may not survive, either.

The inevitable conclusion: Just as in 2008, when Americans eventually balked at higher oil-fueled prices and stayed home, travelers have probably hit the fare wall. They may have to pay $4 for a gallon of gasoline, but they've apparently decided that $108-a-barrel oil is no excuse for higher airfares.

That's really bad news for the airlines because they'd bet on a rip-roaring economic recovery and gambled that adding more seats and more flights would bring record profits. After contracting dramatically in 2009—the commercial airline system shrunk more than at any time since World War II—the carriers launched an orgy of new flights. And that's already come back to bite them on the tail.

In March, for example, Delta's year-over-year capacity jumped 6.2 percent, but its traffic increased a meager half a percent. American Airlines' capacity jumped 2.8 percent, but traffic increased just eight-tenths of a percent. The combined traffic of United Continental Holdings fell 2.2 percent, even though the capacity of United and Continental airlines rose by 2.1 percent. And OAG, the industry's schedule keeper, says that global airline capacity in April is 5 percent higher than last April and at record levels.

Hotels aren't exempt, either. They've been on a nonstop building binge for years, even during the worst troughs of the recent recession. Occupancy and room rates have been ticking upwards lately, albeit at a snail's pace. In February, according to STR (formerly Smith Travel Research), 45 percent of the nation's approximately 5 million lodging units went unrented. Revenue per available room (revPAR) was only around $55. And Marriott, the global lodging giant, says its revPAR will be at the low end of its guidance for the first quarter of 2011. The culprit: a weak market in North America, where too many beds are chasing too few heads.

With the economy hitting another soft patch, it's wise to remember that business travel is always a leading indicator of a downturn. When business is down, business travel plummets fast and budgets wither. So things are likely to get worse before they get better.

How do you weather what may be coming? Here are some tips for managing your travel and your travel budget wisely.

Beware of Disappearing Flights

When travelers won't pay more to fly and energy costs stay high, airlines slash schedules. For obvious reasons, flights to Tokyo and Cairo have already been sharply reduced. The weakness of the U.S. dollar against the euro makes Europe a high-cost destination, so you can expect some frequency reductions on major routes and the possible elimination of secondary and tertiary routes. Airlines will also scrounge for smaller aircraft to cut capacity without cutting the number of flights. If that doesn't staunch the bleeding, expect reductions in the number of short-haul flights that use fuel-inefficient 37- and 50-seat "regional" jets. Second-tier hubs such as Cincinnati, Cleveland, and Memphis might suffer big cuts too. Also on the block: ultra-long-haul flights from the West Coast to Europe and the East Coast to Asia. Those flights are especially costly to operate because they burn energy just to carry the fuel that aircraft require to traverse the longer distances. Airlines will ground the longest hauls and reroute flyers through hub cities closer to their final destination.

Bottom line: Don't assume a flight you booked weeks in advance will still be operating when it is time for you to fly. Have backup plans.

Wait It Out

Televised talking-head "experts" buffaloed travelers into buying early and buying high back in 2008. When fares began to fall with oil prices later in the year, thousands of travelers were stuck with high-fare itineraries while the carriers discounted lustily to fill empty seats closer to departure time. If you must travel, lock in the fares now and hope for the best. But if you can defer a decision on your trip, wait out the airlines. They might discount if seats are going unsold or if oil prices drop. If they don't, don't fly. That's the definition of "discretionary travel," after all.

Click to go to the second page for more tips on how you can keep your travel costs down.