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A chill in summer travel plans

Economic uncertainty is clouding the horizon for vacationers, but the industry hopes enhanced deals get people back on the road and in the skies

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By Katie Johnston Chase
Globe Staff / May 21, 2009
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Despite the recession and fears of more layoffs at their jobs, Patrick and AnneFaye Sullivan are going on vacation this summer.

So what if it's Walt Disney World in the swelter of August? It's cheaper than going next winter, when they had originally planned to go, thanks to off-peak hotel rates, a free dining promotion at the park, and a deal on Southwest Airlines. But just in case the economy ruins their plans, the couple bought trip insurance.

"You never know what's going to happen," said Patrick Sullivan, 26, of Bristol, R.I. Both of the Sullivans have seen fellow employees let go - Patrick Sullivan at the insurance company where he works, and AnneFaye Sullivan at the high school where she teaches math.

In this unstable economy, it's no surprise that Americans are taking fewer summer vacations: A recent poll by the Associated Press/GfK Roper Public Affairs & Media found that more than half of the 1,000 Americans surveyed weren't planning a summer vacation, and a third have canceled a summer trip this year because of financial concerns. And those who are traveling are so worried about their jobs and their depleted retirement savings that they're often not content to accept the first offer they see.

"Everybody's looking for a good deal," said Annie dellaPenna, who owns Touraine Travel in Boston. "Even the wealthy."

And there are deals to be had. The cost of lodging and airfare was down 6.8 percent and 4.1 percent, respectively, in the first quarter of this year compared with last year, according to the US Travel Association, a Washington, D.C., trade group. And Rick Seaney, chief executive of FareCompare.com, which tracks airfare, said prices to Spain, Germany, Ireland, and the United Kingdom are at 10-year lows this summer, with tickets that normally sell for $1,000 going for between $550 and $600.

"If you're taking a once-in-a-lifetime trip to Europe, this is absolutely the year to do it," Seaney said.

But many vacationers are skipping their dream vacations this year and making more frugal plans: driving instead of flying, staying at more modest hotels, and reducing their time away. In fact, with gas prices well below what they were a year ago, AAA Southern New England is projecting a 1.5 percent increase in road trips nationwide this Memorial Day weekend - with an 8.5 percent increase in New England. Air travel, on the other hand, is expected to go down 7 percent this summer compared with last, according to the Air Transport Association of America.

"There clearly is some trading down that is going on," said Pat Moscaritolo, president of Greater Boston Convention and Visitors Bureau. Or as Wendy Northcross, chief executive of the Cape Cod Chamber of Commerce, puts it: "They're going to take a vacation that they're not going to be bragging about around the water cooler."

Short road trips might also become the norm for workers who are anxious about being out of the office for too long - both those with too little to do because business has slowed or too much to do because co-workers have been laid off, said John Challenger, chief executive of Challenger, Gray & Christmas Inc., a Chicago company that helps laid-off executives find jobs.

"People are very much focused on holding on to their seat right now," he said. "They know that the job market is a treacherous place, and the safest place to be is where you're at."

Even though Donna Callaghan's business, Eccoli Hair Design in Lexington, isn't hurting, she is nervous about the economic crisis. So she waited until last month to book a two-week trip to Italy in June with her boyfriend and her two college-age sons and did some research online before booking it through a travel agent. "I wanted to be a little bit more informed," she said.

Regardless, she was determined to take a vacation: "I'm just not going to do the camping and mosquito thing."

Travel agents say they are seeing more of this well-prepared, last-minute behavior, said Karen McCrink of Atlas Travel in Milford, as are home owners who rent out vacation properties.

People usually start planning their summertime travel in January and February, said Jeff Talmadge of WeNeedaVacation.com, a site that advertises home rentals on Cape Cod and Florida, but that wasn't the case this winter as investments dwindled and companies shed jobs in droves.

At the end of February, bookings at WeNeedaVacation.com were down 20 percent from the previous February. People were "paralyzed" by the down economy, said Talmadge of Wellesley. But, as the stock market started rising, so did interest in vacations, and he expects this month's bookings to be up 31 percent over last year. The maximum price people are willing to consider, however, is 10 percent lower than it was last year.

Cara Cantwell of Randolph, who wants to take her daughter to Disney World in August, said if the theme park weren't offering discounts, including free admission on her daughter's birthday and a free dining plan, she'd go to New Hampshire or the Cape instead.

"I could get let go at any time," said Cantwell, 35, who works in accounting at a recruitment firm downtown. "They just let someone go yesterday."

Katie K. Johnston Chase can be reached at johnstonchase@globe.com