More people opt to stay put for the holidays

The Philadelphia Inquirer (MCT)- College students Natalie and Robert Kelly are forgoing their annual Christmas trip home to Utah this year because of the shaky economy and higher airfares.

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Natalie, 22, and husband Robert, 27, a graphic design student at the Art Institute of Philadelphia, in previous years flew to Salt Lake City for $300 or less each. The same roundtrip ticket this Christmas costs $400 and up.

"It's just too much money and too much stress associated with the money," said Natalie Kelly, a history major at the University of Pennsylvania. "We're going to get our own Christmas tree and hang out in Philadelphia. We're not upset about it. We've made our decision."

The Kellys are not alone. People are waiting longer to book vacations in hopes of finding deals _ and some won't be traveling at all.

"Christmas and almost all holidays are times of rather extreme peaks and valleys in demand," said American Airlines spokesman Tim Smith.

While airplanes are still expected to be near full on peak travel days, fewer people overall will travel this Thanksgiving and Christmas, said David Castelveter, spokesman for the Air Transport Association, an airline industry trade group.

The reason: Rising unemployment, an erratic stock market and higher fares have made consumers uneasy about spending money.

Add to that a 10 percent cut in airline capacity from a year ago _ a decision the industry made during the summer, when crude oil cost nearly $150 a barrel and gasoline cost $4 a gallon.

Even so, the airlines express optimism and say their advance bookings are in line with last year.

"There's no softening around Christmas," US Airways spokesman Morgan Durrant said.

JetBlue Airways said its Christmas-New Year's bookings are "still looking favorable." But "we see a bit of softening for Thanksgiving, and I think other carriers do as well," said JetBlue director of revenue management, Roger Johnson.

But some travelers are deciding whether they can afford to travel at both Thanksgiving and Christmas. "There are certainly people priced out of taking two trips," Johnson said. "To the extent that is occurring, I think more people are choosing Christmas."

To entice passengers who are on the fence, Northwest Airlines became the first major carrier last month to offer holiday airfare sales. Other airlines matched the lower fares.

"The bargains aren't going to be on the peak travel days, but on the periphery days you'll see some pretty good deals," said Peter C. Yesawich, chairman and chief executive officer of Ypartnership, a marketing services firm specializing in the travel industry.

"Consumers in my view will continue to travel roughly in the same numbers, but they will be far more value conscious than we have seen," Yesawich said. They will spend less on hotels, gifts and retail buying.

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"What people will save by not shopping will go to fund those almost obligatory trips to grandma's house," Yesawich said.

Rick Seaney, chief executive officer of the airfare-research site www.FareCompare.com, said there are "awesome" airfare sales now because airlines have empty seats, although the cheapest tickets are not available on the busiest holiday travel days.

"Airlines have traded the oil crisis for an economic crisis," Seaney said. "A lot of people were shopping a month and a half ago and seeing very high prices. They said, 'This is out of my budget this year.' "

International travel is down during the Christmas period, said Jennifer Urbaniak, spokeswoman for Lufthansa German Airlines. "We are remaining hopeful that things will turn around, but right now, unfortunately, it is a decline for us in December."

Potential travelers are waiting to see the effect of Sen. Barack Obama's election as president _ "how the stock markets respond, and if there is going to a rally towards the end of the year," Urbaniak said.

Airlines are worried that demand will drop off in 2009 as the realities of a recession set.

Delta Air Lines chief financial officer Edward Bastian told investors last month that "while near-term demand remains solid, we are keeping a very close eye on booking trends. Internationally, we are starting to see a little bit of demand softening." He said passenger bookings are down 2 to 4 percent for November and December from a year ago.

Industry revenue growth is likely to diminish in coming months, said JP Morgan Chase analyst Jamie Baker in a recent research note.

The holiday airfare sales are "neither unusual nor remarkable," he wrote. "In fact, holiday price points appear broadly higher than last year _ not to mention you'll be paying for that suitcase."

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That's why people are looking for better deals.

Waiting for bags at Philadelphia International Airport, Mark and Patty Edelstein of Princeton, N.J., said they hope to take advantage of the sagging economy to find bargains for a ski vacation in Vail, Colo.

"We are actively looking for hotels, specials and good fares to go away at Christmas," Mark Edelstein said. "I think people are going to be hurting."

The family of four, which includes Megan, 10, and Josh, 5, usually go skiing in February. With the teetering economy, the parents are scouring the Internet for bargains _ even in primetime.

"Now I'm saying we might as well go Christmas week," said Patty Edelstein.

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© 2008, The Philadelphia Inquirer.