Is now the right time to ignore the prophesies of economic doom, open your wallet and book a holiday? Yes, say travel agents, tour operators and independent observers.
Prices take a nosedive
Is now the right time to ignore the prophesies of economic doom, open your wallet and book a holiday? Yes, say travel agents, tour operators and independent observers who are looking on at the embattled airline and hotel industries and wondering open mouthed at falling prices. But they warn, the bargains may not last. "We are at historic lows right now," Rick Seaney, the chief executive of farecompare.com, an airfare comparison shopping site, says. "It's a buyer's market worldwide." Madness is how another travel industry insider describes the current, highly competitive environment. "If you are canny," Gloria Ward, a spokesperson for The Ultimate Travel Company, a tailor-made holiday specialist, says, "you can have exactly the same holiday as you had last year and perhaps pay £1,000 (US$1,564; Dh5,740) less, per person ... I think that some deals that are around at the moment are not going to come around again." And if you are more lazy than canny? You could still find a bargain as reductions in air ticket and hotel prices - the latter by 10 to 50 per cent - become commonplace. "Drops in airfares and the drops in hotel rates are [being] translated into package prices," John Felix, a senior vice president at Emirates Holidays, a local tour operator, says. We can all thank the economic recession, which has hit tourism and the airline industry particularly hard, for the potential savings. Last week, British Airways (BA) announced a loss of $628m (Dh2,306m); its biggest in 25 years. The UK flagship carrier, which flies to London from Dubai and Abu Dhabi, partly blamed plummeting business and first-class passenger numbers; those travellers in the comfy seats, who typically pay two to six times more than leisure travellers and boost the carriers' bottom line. BA currently has a sale on business class tickets to worldwide destinations to lure customers up to the front of the plane. The number of business travellers picking up the phone rather than hopping on a red eye means that a number of airlines are also offering discounted fares to what were once popular business destinations. "I am amazed that there are sales [on flights] to South Africa," Ward says. "Normally places like Johannesburg, like Rio, you never get deals. Flights are always booked by business travellers." Some of these deals may only be available through tour operators, she says, so it is worth comparing the like-for-like cost of booking independently versus through an operator. Back in economy class, passengers can also expect to find promotions reducing ticket prices to destinations around the world for the next few weeks at least. Whereas last year, some airlines cut the number of flights in response to rocketing oil prices, and in doing so pushed up seat prices; this year supply and demand is firmly back in the consumer's favour. In the US, for example, airfares to European destinations are down by 30 to 50 per cent as airlines compete to secure bookings. Here in the Middle East, airlines are facing the same turbulence in a market that was once a sure bet for good business. According to the International Air Transport Association (IATA), although local carriers are predicted to buck the wider recessionary trend and experience a slight growth in passenger numbers this year - up 1.2 per cent compared with a predicted fall of 7.8 per cent globally - this is being undermined by the aggressive expansion of carriers such as Etihad Airways, Emirates, Air Arabia and Qatar Airways. The resulting empty seats should mean lower prices close to home. "The present circumstances of a drop in traffic and increased competition would offer consumers very good opportunities to get very good deals. So, they should do their homework, and grab the deals as they come along," Dr Majdi Sabri, the regional vice president (Middle East and North Africa) at the IATA, says. Etihad Airways is one of those carriers offering promotions on selected fares. At the beginning of May - traditionally a quiet month for sales - it started selling cheap last-minute return fares online to both short break and long haul destinations such as Moscow for $412 (Dh1,515), Doha for $214 (D785) and Geneva for $464 (Dh1,705). The rates vary and are only available for a 48-hour period. The lucky few will be able to get up to 50 per cent off standard economy fares. Emirates also has a host of special offers on return flights available now, including: Delhi for $330 (Dh1,215); Los Angeles for $1,224 (Dh4,495) and Manila for $396 (Dh1,455). For travellers who take advantage of these cheap deals the discounts don't stop at airport check-in. The most expensive resorts are among those having to work extremely hard to attract guests, who are reluctant to splash out these days, Ward says. "So many of the hotels are saying pay for three nights and stay for five and these are hotels where you were looking at £200 [$315; Dh1,150] per night." Parts of Asia are particularly good value at the moment, she says: "There are a lot of very good deals happening in Thailand and Indonesia." Not all destinations are equally desperate. This year's prices remain more or less unchanged in India and resorts in the Maldives according to tour operators. The best deals can be found when people are flexible about the palm-fringed beach or upmarket hideaway to which they want to escape. "If someone comes in and says, I am looking for a great beach hotel and I just want to relax for a week, and they are prepared to be flexible... they should be able to get some great prices," Nathan Adams, the general manager at Dnata Holidays, a tour operator, says. All good things, however, must come to an end. The summer months of July and August are typically peak times to travel and many such offers are likely to disappear - recession or no recession. Etihad is warning passengers to book their flights as soon as possible. This week it claimed that flights to Cairo, Beirut, Amman, New York, Toronto, Singapore, Bangkok, Geneva, London and Munich are selling fast as people make plans to escape the heat. This warning is echoed by Adams: "Clients need to take advantage of the deals that are out there now," he says. "They really do represent some of the best deals that have been offered in the Middle Eastern market for many years. As the economic situation begins to improve, I would predict that offers such as 50 per cent off will quickly disappear." In September, it is likely that prices will begin to level out as the larger flagship airlines take the necessary steps to reduce capacity in line with reduced passenger numbers, but there should still be some offers around according to Seaney. "Typically you see quite a few sale periods during the fall. It's a time when kids go back to school and parents are not concerned with leisure travel." In the longer term, the increase in the number of local low-cost, no frills airlines means that airfares to short haul destinations should become more competitive. Dubai's first low-cost carrier, flydubai, is due to commence services this week and is currently advertising introductory discounted fares to Beirut, Amman, Damascus and Alexandria. It, like Air Arabia, Jazeera Airways and Nas Air, is hoping to persuade travellers to take weekend breaks as well as longer summer holidays by making air travel more affordable, as Ghaith al Ghaith, its chief executive explains: "Our objective is to always offer the lowest fare possible and whenever there is any opportunity to reduce fares, we will try to reduce them ... ". Local low-cost carriers, however, still only represent five per cent of the Middle East market, compared to Europe for example - where these airlines account for 37 per cent of air travel - so attention-grabbing fares of $10 (Dh37) are probably some way off. This is perhaps why bookings on Air Arabia, which launched five years ago and flies to 46 destinations, remain buoyant while low-cost European carriers such as easyJet are feeling the pinch. EasyJet recently scrapped free tea and coffee for its air crews although it is still allowing them to use hot water free of charge. In the first quarter of this year, 81 per cent of Air Arabia's seats were full so prices have not been discounted, a spokesperson says. "When we sell our tickets we sell at a certain price ... if we feel that the price is not working, [we] have to by nature drop it down. But because of the [passenger] numbers that we are achieving, and the demand on our flights, we are doing what we usually do." He advises customers to book early to get the lowest fares - under the pricing model of most low-cost carriers, what you'll pay increases as flights fill up. Booking patterns do change according to destination - some fill up quickly as flights are released, others in the last few weeks prior to departure - so it's worth doing some research well before you want to travel. The simple lesson that can be drawn from the pricing see-saw, is precisely this: boom or bust, in summer or autumn, do your homework. As Seaney says: "Buying an airline ticket is sort of like picking a stock; you don't want to buy it on its high, you want to buy it on a dip."
* If you fly with Singapore Airlines and book a stopover in Singapore before Sept 30, you could pay just US$1 (Dh4) for your first night's hotel accommodation, including airport transfers and admission to some tourist attractions (www.singaporeair.com) * Etihad Airways commences flights to Athens, Istanbul and Larnaca in Cyprus in June. You can book a two-night break in Athens from $700 (Dh2,575); Cyprus from $313 (Dh1,150) and Istanbul from $500 (Dh1,835) per person, including return flights, breakfast and tourist excursions, with car hire gratis in Cyprus. Book this month for travel in June/July at www.etihadholidays.com (800 2324) * Stay at Le Méridien Fisherman's Cove in the Seychelles for three nights, half board from $3,400 (Dh12,494) per person, including flights and transfers. A saving of nearly 20 per cent on a similar package last year. Offer valid from July until September at Emirates Holidays (www.emirates-holidays.com) *Under a two nights for the price of one offer at the Six Senses Hideaway Zighy Bay, Oman, a pool villa costs from $396 (Dh3,014) per night, including taxes (www.sixsenses.com; 00 968 26735 888) *Save around 40 per cent on a three-night break to Pangkor Laut in Malaysia, which now costs $428 (Dh1,575), and Hua Hin in Thailand for $480 (Dh1,770) per person. Both packages include breakfast and transfers but exclude flights, and are available through Dnata Holidays (www.dnataholidays.com; 800 8118)