2008 Travel Stats Paint Dark Picture

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The first weeks of every year bring a blizzard of travel industry data: fourth-quarter and full-year financial reports, granular traffic stats, analyst pronouncements, and all sorts of statistical minutia.

It's rather dull stuff, frankly, but this year I plowed through it all with a single-minded determination to find the proverbial silver lining to the current collapse of travel. No such luck. The silver linings weren't just elusive. They were non-existent. See for yourselves:

Things Are Bad All Over
If you harbored any lingering hopes that travel's woes were either shallow or segmented, forget it. Travel is in decline across the board.

Forty of the nation's 50 largest airports suffered a downturn in commercial aircraft departures. That's dreadful news considering the most recently released statistics only cover the 12 months ending last June—and the biggest cuts in airline capacity, about 10 percent, didn't come until after Labor Day. Despite that late-in-the-year seat capacity reduction as well as the sharp drop of fuel prices, the fourth quarter was calamitous for the nation's largest airlines. They lost a cumulative $1.5 billion before special charges and extraordinary items like fuel-hedging losses (see below).

Even Amtrak is suffering. It carried 28.7 million passengers in 2008, a record number. In the last three months of the year, however, traffic declined slightly compared with the last three months of 2007, and passenger loads were 5 percent below the railroad's projections.

Worst. January. Ever.
The first month of the year is never a good one for travel, but this January will go down as the worst one in recent decades. The nine largest U.S. carriers all saw traffic declines. The slump ranged from modest (2.2 percent at Delta Air Lines) to huge (8.2 percent at Northwest Airlines) to alarming (11.7 percent at American Airlines and 12.4 percent at United Airlines).

The decline of the hotel industry was even more pronounced. For the week that ended January 31, just 48 percent of the nation's estimated 4.5 million hotel rooms were occupied, average daily revenue fell 7.3 percent, and the all-important revpar (revenue per available room) tumbled a startling 19 percent. Only one of the nation's top 25 hotel markets—Tampa-St. Petersburg, host of the Super Bowl—was able to register a year-over-year increase in all three categories.

Laid Low Up Front
As discussed in last week's column, airlines are disproportionately reliant on revenue from business travelers buying business- and first-class tickets. Unfortunately, that is the part of the airline business unraveling fastest. British Airways, the most carefully watched among international carriers, recorded an eye-popping 13.7 percent drop in premium traffic last month.

"We're seeing a significant degradation in front-cabin RASM [revenue per available seat mile] with a combination of lower front-cabin yields and [passenger] load factors," added Continental Airlines president Jeff Smisek. "Business travelers appear to have shifted their flying from the front to the back" of the plane. Airlines are also preparing for a permanent reduction of up-front flying. United Airlines, for example, says its overall premium-class passenger capacity is being slashed by 20 percent as it completes the installation of new business- and first-class cabins.

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