2009 Business Travel Predicitions

Two months after announcing a series of new routes for 2009, Delta Air Lines canceled them.

Image: Scott Olson/Getty Images

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When I whipped up a bunch of 2008 predictions in the first Seat 2B column of 2008, I knew it was a matter of talking about the trees and ignoring the forest. After all, pundits almost never see the big stuff coming, just the minutia.

As long as you overlook 2008's business-travel forest—the oil-price spike and subsequent fall, the 78 failed carriers worldwide and the late-year collapse of travel demand—I think you'll agree that I nailed the trees. I accurately predicted the rush to London's Heathrow Airport at the dawn of "open skies" over the Atlantic; the merger of Delta and Northwest; the introduction of internet service on jets; the continued expansion of the hotel industry; and even the collapse and umpteenth government makeover of Alitalia and Olympic, Europe's perennially weak sisters of the skies.

So what business-travel trees do I see for 2009? Here are some of the things we're guaranteed to talk about. What the forest will look like in 2009 is anybody's guess.

Hotels: Too Many Beds, Not Enough Heads

Five years of over-development has already begun to haunt the worldwide lodging industry. Guest traffic and nightly room rates have plunged in recent months and the 2009 outlook is grim, not least because hundreds more properties are about to gush out of the pipeline. Although hard numbers are difficult to come by, some experts believe that more hotels are upside-down on their mortgages than residential properties. Business travelers will be the winners on the top line: We're already seeing startling price discounts and value-added offers and corporate travel departments are ringing sizable rate reductions from major hotel chains. The bad news: Hotels will cut back on services, close restaurants, skimp on staff and eliminate perks. Some older properties, even a few well-known resorts, may simply close their doors in 2009. In other words, you'll pay less—and get less.

Airlines: Small is the New Big

Want a measure of how dramatically travel has slowed in recent months? U.S. carriers have cut so much domestic passenger capacity since Labor Day that an airline the size of Northwest, the nation's fifth-largest, has effectively disappeared. But still there are empty seats and fares are falling. That trend will continue in 2009. The big change this year will be internationally. After several years of switching capacity to overseas routes, U.S. and international carriers will be forced to retrench. It's already happening, in fact. Virtually all of the new service originally planned for China in 2009 has been delayed. And on December 23 Delta Air Lines—which has grown its international operation to 50 percent of its capacity from just 20 percent three years ago—canceled a bunch of new 2009 routes that it had announced just two months earlier. Look for sizable cuts in passenger capacity to Europe since most of the new flights in recent years were added over the Atlantic. There will be reductions in service to Latin America too.

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