You Can Take it With You

You Can Take it With You

residentinskyWhy are air fares going up so fast? Because travelers are rich.

Air fares have been used by all of us in all areas of the travel industry as predictors or leading indicators of travel in general. That’s because they are bought more through reactive responses to instant offers than the considered thinking of some measure that usually goes into planning a vacation.

That type of reactionary buying reveals the nature of you, the consumer, better than anything.

“Air fares are high, because planes are full,” reports a frequent flying expert.

Fuel prices are at historic lows, but air fares are up 17% over last year according to the LA Times and there’s absolutely no indication they’re going to go down anytime soon.

Why? Didn’t you recently hear from your favorite media pundit that the “recovery” isn’t widespread? What about Europe’s “new recession?” Isn’t China in a muddle?

Yes to all the above, but planes are full, because flying is expensive, and the rich are doing just fine thank you.

This is capitalism at its sweetest. What it illustrates is a turf war between the bullies. American Airlines versus GE Capital. Cathy versus the Chinese Communist Party. There are a lot of very rich people in the world, and air travel and vacations are becoming their exclusive purvey.

The reaction is widespread in all the industries that make vacations. In the one I know the best, East African safaris, prices are going up after a ridiculous dip caused by the now widely accepted irrational fear of ebola.

Before the ebola scare our industry prices hit a new high. That wasn’t because there weren’t good deals, there were and still are. But just fewer of them. The excellent mid-market companies like Sopa and Serena in East Africa and the Drifters and Kwandos and lower end Sun Internationals and Proteas in the south are still offering excellent prices.

But there’s many fewer of those than there used to be. Fewer in capitalism means less capacity and less capacity in a balanced market means higher prices, but that isn’t happening to the lower ends of the travel market in Africa.

Rather, there are more and more luxury, high-end properties whose prices are moving upwards.

The low and midmarkets are struggling.

If you’re a budget consumer looking to go on safari, you better move fast, because your choices are diminishing and in the current climate might not even exist in a few years!

But if you’re one of those Etihad Airlines passengers who just spent $20,000 (one way) for a 3-room suite on a flight from London to Dubai … no worry. You really don’t have to know how to work your personal wide-screen TV or microwave: you get a butler, too.