In a typical year, they confidently pull the levers that make the machinery of the travel industry work. But this year, those who guide some of the strongest brands in travel are struggling to understand what awaits them in 2009. Travel Weekly Editor in Chief Arnie Weissmann interviewed the leaders in 11 distinct industry segments and explored how they plan to approach a year when the only certainty is uncertainty.

Stephen Holmes 
CEO, Wyndham Worldwide

The economy is moving so quickly that we have been going back and forth and back and forth on our 2009 budget. We're going to be highly profitable, but it's a question of how profitable. We've given guidance to the street that EBIDTA [earnings before interest, depreciation, taxes and amortization] will be essentially flat to 2008.

Our focus for hotels in 2009 will be to help our franchisees get more than their fair share of the market and help them find more efficient ways to manage their businesses, help them with their yield management.

You'll see some very active branding efforts; the need for branding becomes more acute when times are bad. We will try to bring them additional hotel room-nights to make them more profitable.

As a company, we've got two structural advantages. One is that we're franchisors. We may not have the upside of ownership when hard asset values are going up, but, for instance, utility costs don't hit us when they go up.

The second is that we're largely leisure dominant. Conferences will be limited in 2009, especially internal corporate meetings. You will, however, see conventions for associations. It's really a matter of survival for them.

But on the leisure side, we think people will endeavor to take vacations or visit family and friends. We have seen some "trading down" going on, and that will be good for many of our brands.

Will there be discounting? Sure there will be discounting. There's no way you can completely avoid discounting. But we hope that it will be thoughtful and moderate. We're encouraging franchisors to do three nights for the price of two or five-for-fours. After 9/11, the online travel agencies were relatively new, and with the merchant model people were saying give me 50 rooms for 10 bucks each and I'll dump them for you. And hotels were dumping too many rooms into the market. I don't think that will happen again.

We may make some acquisitions in 2009. We've always been acquisitive, but it depends on a lot of things: the capital market environment, what our stock value is, what other people's stock is.

In general, I don't think this type of economic environment allows a lot of positive things to happen. But it does really challenge hotels to be smarter and better.

Michelle Morgan
CEO, Signature Travel Network

What's happening today will forever alter the landscape of travel retailers.

The majority of Signature owners have been boldly cutting expenses. They're reducing head count and adjusting compensation models by cutting salaries, reducing staff to three or four work days and urging employees to take time off without pay. Owners of multiple agencies are closing locations and consolidating.

Others have renegotiated their leases with landlords. Several storefront owners are [becoming] home based. Some are merging with larger agencies to maximize yields and eliminate the headaches associated with running a business.

Bottom line: For today's travel retailer, it's about cash flow, cash management. Too many don't have the lines of credit or cash reserves to hold their heads above water for an extended period of time.

For some agencies, advanced bookings have completely stalled or are at double-digit, year-over-year declines. Cash is king in this market. The better capitalized agencies will prevail.

Owners in the business of travel will do better than owners in the travel business. It's easy to get distracted thinking about the next marketing scheme and not move into in-depth financial analysis. But that's precisely what's required in this market.

Supplier default is a concern that keeps us up at night and has us consulting our CPAs and legal counsel. Our members are encouraged to sell third-party insurance and take all steps necessary to mitigate risk. Which products are on the shelves right now is very important.

In 2009, there will be downward pressure on pricing across all segments, even the luxury sector. And the booking curve has changed drastically. Consumers are more reluctant to commit far in advance, making it very challenging for retailers to manage cash flow and predict sales patterns. Clients are "buying down" -- Holland America instead of Regent, a veranda stateroom instead of a penthouse, five nights at the luxury resort instead of seven or three instead of five.

Signature members are aggressively marketing. Ones who are online with compelling all-inclusive, value-packed products like Mexico, Club Med and cruise vacations are harvesting new business. Agencies that continue to market, conduct client appreciation events or upscale product presentations are enjoying moderate business successes. 

It's not all doom and gloom. The hand-wringing owner waiting for the phone to ring will not, sadly, survive this harsh business climate. But agencies that adapt, innovate, embrace technology tools and nurture clients will emerge stronger, more nimble and more resilient than ever.

Larry Kellner
CEO, Continental Airlines

I'm real happy fuel prices are down. The $100-a-barrel drop in oil saves us billions, and provides a cushion against the falling economy.

The economy concerns me; it's not clear that we understand where it's going. But my biggest concern is oil going back up. I always worry about oil going up.

We've slowed deliveries from Boeing, but we have a number of 737s coming next year. The credit markets are an area of concern. This is the tightest I've ever seen them.

We took our domestic capacity down this past fall. We're not planning any more cuts, but we'll always watch capacity and monitor demand. Through the end of the 2009, I expect we'll add more routes than we'll cut. Frequency is important.

But ultimately, this is a network business. Without question, the biggest change for Continental in 2009 will come when we move from SkyTeam to Star Alliance. They don't have a strong carrier in New York, and it will be very complementary. This will set the platform for the next 10 years. We're planning on forming a very close partnership with United.

Regarding fees, we look at what percentage of customers uses something. If it's less than 20%, we consider adding fees. But meals at meal times? Pillows? No.

And we always look at the routes; these fee decisions can be route specific. Most customers will say they don't like fees, but we didn't see share shift when we didn't have a bag fee and others did.

We're looking at what can bring customers the best deals. We just switched the Continental Vacations program to MLT [Vacations] and have seen good results.

Travel agents are a key part of our business. There's a perception that the majority of bookings are done through the Web and that agents aren't critical. But we have a large, worldwide network, and travel agents bring us our highest yielding revenue.

Our strongest and best business customers are assisted by travel agents.

[When asked if 2009 could be a year when Continental restores base commissions for agents, Kellner declined to comment, saying that, for legal reasons, "I have to be careful" discussing or signaling anything to do with future commission rates.]

We have a wonderful team here, and we always grow our reputation with customers. In tough times, others may act in ways that aren't as customer friendly, and we can take advantage of that. In fact, we've seen some of our best performances in down economies.

Stephen Perry
CEO, New Orleans Metropolitan Convention & Visitors Bureau

The No. 1 thing on the minds of my peers is the length and duration of this recession. We're all accustomed to natural business cycles, but this one has people worried.

We are a little more cautiously optimistic than most destinations in the U.S. We're already 7.7% ahead of last year in meetings and conventions. Ultimately, we may even be up as much as 9%.

We don't have the level of the transient business visitation that's dramatically impacting corporate cities; we didn't have that base to lose.

We do expect a softer market for incentive travel. But our meetings are heavily association based, and those meetings are still occurring.

The leisure side, for every city, is the great unknown. Families are making decisions in an environment where their jobs are less secure, disposable income is down, value of homes is down, 401(k)s are down. Their comfort zone to buy high-end products is lowered. They're looking for real value.

This is the year for travel agents to reassert themselves through the development of packages. Consumers will be looking for bargains and real value.

But those who simply discount deeply will not get enough share of market to make up for the depth of the discount. Most destinations will be focusing on preserving reasonable rate integrity, with a focus on packaging.

We think that with the reduction in the price of gas, the drive regional market will become more important. We already have compelling reason-based visitation for Mardi Gras, the Jazz and Heritage Festival, the Sugar Bowl, others.

This year, we'll be adding festivals so that we'll have one every weekend in August and September. The development of new products that create reasons to visit, this will be key when times are difficult.

We're also doing a massive campaign about being a tourist in your own home town. I think you'll see this all over the U.S.

Overseas, there is a tremendous excitement about the election. It has an impact on how people feel about visiting the U.S.

The change in tone has been stunning.

We have an event in Paris that usually brings eight to 10 media and tour operators to a luncheon. This November, we drew 70, and the entire buzz was about the changes that are coming to America.

It was so profound. Obama represents a multicultural person. For travel to the U.S., it's a great image and can be a positive thing for the rebirth of our international visitation.

Dan Hanrahan
CEO, Celebrity and Azamara Cruises

It's hard to get out from underneath the bad news. We're in an economic crisis, obviously, but we still have 90% of the population working, and people are saying that although they're changing their purchasing patterns, they're not changing their plans to vacation. We need to be sure that when they do plan their vacation, we're prepared to help them make the right decision.

Consumers are nervous and reluctant to buy, and between us [cruise lines and travel agents], we need to figure out how to get beyond that. Our guests tell us the value of a cruise is second to none. So I think there's potential for us to have higher occupancy than some of our land counterparts.

When we look at discounting, it comes down to the brand. If you go too low, you're impacting its long-term health; people might think there must be something wrong with the product. Having said that, prices right now are so good that people must realize what incredible values are out there.

I'm not concerned about taking on the new ships [Celebrity's Solstice and Equinox]. I'd rather it was a better revenue environment because we're not getting the rates we should be getting. But we're better off with them than if we didn't have them. They're so much more efficient than the older hardware. They're better yielding than the old ships.

In this environment, some travel agents may choose not to stay in business. I have no idea how many; I wish it were zero. It depends on how long and deep the recession is. We've laid off people, and we've seen reports of leisure agencies closing their doors. I think a number of agencies will reduce costs by becoming home based, and hopefully that will help them with their costs and they'll weather the storm.

As consumer spend is going down, we're more aggressive than in the past in negotiating with suppliers, and we're seeing costs-per-item going down.

And we're being careful about capital expenditures. We might delay, for example, upgrading an accounting system or, as long as things are functioning well, replacing something in the engine room that could go another year with an increased maintenance schedule. Nothing to do with safety, of course.

Here's what won't be changing: We won't be cutting the marketing budget, or changing anything to do with the new ship orders.

We don't have any plans to do anything different regarding NCFs at this time.

But we did launch the Agents Support Action Plan, which raises commissions and increases co-op funding, among other initiatives. We want to help agents get through these tough times.

Richard Launder
President, Travel Corporation USA 

Predictions are very difficult to make. We see and understand very little about what's going to happen with the economy. Every news story requalifies every decision we make.

But if we manage our yields correctly on the tour operator side of our business, I don't see any reason not to be profitable. A lot of operating costs have come down; fuel costs have come down massively. And thank goodness for the turnaround of the U.S. dollar.

Tough times force a lot of efficiencies. We've re-upped the ante in terms of online booking capability for travel agents. There are lots of silver linings, one of which is that there's a willingness among travel agents to consider a wider range of products.

The health and sustainability of the travel agent distribution system is incredibly important to us. Most of our brands depend explicitly on travel agents, and any break in the link would be very troubling.

In absolute terms, the revenue an agent gets selling tours vs. cruises is vastly different on a similarly positioned product. We need to be more aggressive in explaining that commissions can be earned on the air, insurance, pre- and post-hotels, and we don't have the noncommissionable fee challenge that cruise lines have.

The deals that will come out of the cruise industry in the first quarter are going to be great for the consumer, but it's going to be hard for a travel agent to make any money out of it.

And we have a very compelling story to tell consumers. Touring can be 40% cheaper than doing it on your own. That resonates at a time like this.

We'll all struggle through '09, but some of our products will do disproportionately well. Contiki will outperform the market average [because] kids graduating college in 2009 have only that year to take this type of rite-of-passage.

We expect to see some trading down from luxury to premium, which will benefit Insight Vacations, and premium to first class, and first class to cost saver, which will help Trafalgar. And demand for riverboats is high; Uniworld will do well.

In 2009, you'll see a later-booking market, driven by value-adds and discounts. I hope it will be more value-add than discounts, but I expect the first quarter will be an incredible market for people who have cash.

Jeff Clarke
CEO, Travelport

In 2009, we'll have several points of focus and opportunity. One of the most significant relates to the Delta-Northwest merger. Since we run their reservations systems, we're going to spend time ensuring that that aspect of the merger goes smoothly.

We've also augmented the point-of-sale technology we purchased from G2 Switchworks with significant additional investment that will allow us to put nontraditional content into the GDSs.

The low-cost airlines are having challenges selling seats, so we're going to work on increasing content from them. We currently have Southwest and, in Europe, Easyjet. These are important levels of content in a down economy.

And I'm very interested in working with the other GDSs to create industry standards for presenting unbundled aspects of airline fares. It's better for customers and for suppliers. It's a top priority.

On the Orbitz side, we're looking at new ways of packaging. It will be increasingly interesting to do trip advising and destinations searches versus just a booking engine.

For example, before, you could search for a vacation in Hawaii. Now, you'll be able to say you want a beach destination for under $1,000 a week.

Travelers have become resilient in the face of difficult times. The switch of the strong currencies around the world combined with a five-year low in oil prices means outbound customers can take vacations they haven't been able to afford for the past five years.

[Online travel agencies] like Orbitz thrive in both up and down economies. If suppliers have capacity that needs to be filled, OTAs provide them both core distribution and incremental revenue through promotions and specials.

When times are good, higher average daily rates for hotels can drive profitability by markups through the merchant model. On the other hand, we typically earn only per-transaction fees with airline tickets, and when prices are low, it drives more transactions. So at the end of the day, OTAs can benefit from high prices or low prices, depending upon the product.

There may be some fantastic opportunities for acquisitions in 2009. We may pick up technology players who don't have the scale or cash flow to keep up during a down economy.

We currently operate two GDSs, and at this time, we think there's value in keeping both brands alive. Over time, they may evolve into the Travelport GDS, or maybe Worldspan, or maybe Galileo. For now, we plan to continue to operate under the multibrand strategy for most of 2009.

Jay Rasulo
Chairman, Walt Disney Parks and Resorts

What you typically need to do in uncertain times is, No. 1, give people reasons to book now and not hold off on making vacation plans.
So our underlying marketing platform, which we call "What will you celebrate," is all about personalizing a Disney celebration, connecting it to what you are celebrating.

We decided to punctuate that by inviting guests to come to our parks for free on their birthdays. It creates an urgency for them to make a long-term plan to do something they want to do anyway.

We have a great slate of things that we're going to continue with in 2009.

We're going forward with products we've already announced, such as our resort in Hawaii, the expansion of Disney's California Adventure and opening four new Vacation Club resorts. And the two new cruise ships, we're full speed ahead.

We are, of course, reevaluating other things, more speculative plans.

I don't 100% know if we'll be making any announcements in 2009 about new projects. We recognize the uncertainty in the economy and are being circumspect about when we will turn on things we're kicking the tires on internally.

And on the cost side, we're responsibly limiting things that don't affect our guest experience, things in the back of house.

It would be foolish in such unprecedented times to say we know what next summer is going to look like, even what Easter is going to look like.

But some things won't change.

Our competitive set is and always will be other destinations around the world that families want to go to. It's Las Vegas and Europe and Branson and going up to Maine for a summer holiday.

I think we are relatively well positioned. What we've done over the past three-to-four years in terms of reinforcing our brand and our promise to remain relevant in people's lives has really given us a great foundation.

I like to tell our people, "Let's continue to be ourselves. Strange times always create an opportunity to stand out for what you stand for."

The situation will turn, and we want to come out of this with our reputation completely intact.

Economic downturns sometimes do create opportunities for acquisitions.

We try to be opportunistic.

Because of our obsession with designing things from the bottom up, some assets aren't that appealing to us.

But if something appropriate came up, we'd take a look at it.

Robert Salerno
CEO, Avis Budget Group

What happens with the auto manufacturers is important to our industry, and it's important to have a healthy set of domestic auto manufacturers. Every year, we negotiate with 11 manufacturers, and that will go on. It's very detailed and hard fought on both sides. I don't see anything different going forward.

There's a real acceptance on the part of the domestic manufacturers that they need to change, though I will say they've improved greatly over the past 10 years. We will probably stay with our domestic manufacturers even if there are no immediate plans for a bailout.

I've been in this industry a long time, and in 38 years, we've been in a lot of downturns. Any company needs to look at every bit of their costs. We started this early -- we've been doing strategic cost reductions, and now we're looking at tactical cost reductions. Coping with reduced travel, we have to slim down.

Think about it this way: If you can take cleaning a car from six steps to four, when you spread that over 1,000 locations, it really gets to be a number. We've committed $150 million in saving to investors over three years through these sorts of processes.

Beyond the economy, beyond travel, the biggest change I'm seeing is the kind of cars people are interested in. In the past, if we had an SUV sitting around, people would accept it. Now, they're very conscious about the gas mileage and what kind of car it is. That will be here long after we get through the downturn. And we're seeing it in both leisure and commercial. We're seeing the shift in behavior on the fuel efficiency and awareness of environmental impact.

And our pricing has to go up. I don't think there's any doubt about that. I think this industry has been a very good value, and will continue to be, but if you look at our rates, we really haven't even kept up with inflation. We've done well through technology and efficiency.

In 2009, we're going to have a new satellite TV product. Something that goes on the back of the headrest, with an antenna on the roof, for families and groups, anyone who's going on a long drive.

As regards locations, even in good times we would have slowed new-store expansions. I think we'll slow it a little more. But we will work on building business at existing stores.

Doug Anderson
CEO, Carlson Wagonlit Travel

There's a lot of hotel capacity coming on, and demand is falling, but I think it's hard to tell what the dynamic will be in 2009. There are a number of moving parts;  it's city by city. Beijing rates will come down 3.5% to 4%, but Austin, Tex., for some reason, will go up 8.6%. There will be pockets where it's in balance. But this research was done in September, and I'm not sure how current September is any more.

We do still believe that rates will not come down significantly in the first half-to-two-thirds of '09, but as the impact on demand is more broadly felt, buyers will have more leverage. When companies were negotiating their '09 rates in the middle of the third quarter of '08, there were some indicators about the economy, but it wasn't clear how deep the slowdown would be. Some buyers will go back to hotels and will want to revisit pricing, but I'm not sure how that will play out.

Some corporate customers still buy hotels at negotiated rates, but more are moving to best available rate, and we think hotels might become more reliant on that. We're helping clients to look not just at a room-night, but to try to package room-night, wi-fi and other services to improve their position.

Our acquisitions program is alive and well. We made four acquisitions in the last half of 2007 and six in 2008. The opportunity to find strong management teams, strong client portfolios and good technology is self-evident. We're looking at some deals. And multiples aren't quite as strong as a year ago, which is good for us.

But our first priority is to make sure we have a clear understanding of our top line, to generate earnings and cash flow, and maintain the balance sheet of this company. We have to make sure we don't get ahead of ourselves.

An opportunity definitely exists in this time of uncertainty to broaden our base. As things become less certain, safety is a concern, and clients are looking for tracking and alerts so they understand where their travelers are. People are looking for ways to travel smarter and to optimize ground transportation, cars and rail. Compliance is a big deal. Top-line, purely transaction al growth is challenged, but the opportunity to bring in new clients is stronger than ever.

Christopher Rodrigues
Chairman, VisitBritain

We're in uncharted territory. This is the 21st century version of the 1930s. It's bad. But you can't read back to the 1930s [because] in the '30s international travel was the privilege of the few. Now, it's the right of the many.

People will fall into one of three categories: those who can't afford to travel, those who could travel internationally but who think that for appearances' sake, this is not the year to do it, and those who realize that there will be some very keen deals and can do what they've never done before at prices that are the best in the better part of the last decade.

If you had to pick a number for the range of people who might be unemployed or otherwise can't afford travel, you'd say 10% to 15%. The real challenge is to make sure that the other 85% do travel, that the pie shrinks as little as possible.

We all have to work together to make sure people don't fall into the middle group, who won't travel for appearances' sake. As an industry, if we don't cooperate and get people to travel, we're dead. Afterward, we can take off our gloves and have the fisticuffs over market share. Ultimately, two traditional consumer concerns have to be addressed that always need to be addressed: First, are you selling some place on the list of places people want to visit? It's hard to get on someone's short list on short notice, no matter how good the deal is. Then, why should they pick this place, this year?

But how will all the tectonic shifts in the airline industry play out? If there's a lot of capacity and it's being priced right, that's a great incentive to travel. But if capacity is cut and it costs $2,000 to come to Britain, nobody will come, even if our currency offers a 30% discount once someone has arrived.

And this has to be addressed sooner than later to make travel affordable. Killer prices at the last minute may not overcome reluctance to travel.

I think that from the consumer demand side of it, the earliest we're going to come out of this recession, from a travel industry perspective, is spring-summer 2010. It could take longer.

A lot comes down to the issue of whether people will regard travel as a right or a privilege. We'll soon find out the answer.