LAS VEGAS — The drawback to a recovering economy is higher prices, travel industry executives cautioned during Tuesday’s keynote presentation at Travel Weekly's LeisureWorld 2011 and Home Based Travel Agent Show and Conference.
"Keep in mind, as the economy gets better, prices go up and the discounts start to disappear," said Jack Richards, president and CEO of Pleasant Holidays.
Vicki Freed, Royal Caribbean International's senior vice president of sales and trade support, concurred that prices will rise but that "it’s going to be gradual."
In an environment where customers are "always going to seek the deal," said Freed, "there will always be seasonality and specials."
Freed said that Royal Caribbean remains bullish on Europe, with 11 ships sailing there in 2011. She said that despite an anticipated rise in transatlantic airfares, "people will find air. They’re not going to give up their vacation."
But Scott Nisbet, president and CEO of the Globus family of brands, warned that if airfares get too high, some may decide not to travel to Europe.
"If people expect to spend $1,000 to fly to Europe and it’s $1,400, they might decide to do something else, like travel domestically or off-season, or defer travel," said Nisbet.
He said that international travel is up in 2011, but that it would be up more if airfares were lower.
The presentation, hosted by Arnie Weissmann, Travel Weekly's vice president and editor in chief, featured five travel industry executives discussing where the industry is headed in 2011 and beyond.
Among the bright spots for 2011 and beyond is that the "cost of technology is coming down," said Greg Kott, president and CEO of Passport Online, a provider of website tools and e-marketing services for travel agents.
Inevitably, talk turned to the value and opportunity in social media.
"We’re not looking for social media to be a booking tool," said Freed, advising agents on how to take advantage of Facebook and Twitter. "We’re looking to stay engaged with the customer."
Another challenge on the technology front, noted Richards, is achieving direct connectivity with the reservations systems of airlines and other suppliers.
"We cannot afford to spend half a million dollars to have direct connectivity with each airline," he said.
Over the past three months, American Airlines' disputes with Expedia, Travelport and Sabre have been big stories in travel.
Steve Tracas, president and CEO of Vacation.com, noted that it's not the first time that airlines and GDSs have gone head to head.
"The airlines have tested the power of distribution a number of times," said Tracas.
So, asked Weissmann, "The GDSs are not going anywhere?"
"Not as far as Steve Tracas can see," he said.