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Economic fears, weak dollar leads vacationers to scale back

Dena Feldstein Brody and her husband, Edward Brody, of Cambridge, Mass., display postcards from a 2006 trip to Italy and a 1996 photo of Edward with their daughter, Anna Brody, on Martha's Vineyard. Associated Press (Associated Press / The Spokesman-Review)
Associated Press The Spokesman-Review
Dena Feldstein Brody and her husband, Edward Brody, of Cambridge, Mass., display postcards from a 2006 trip to Italy and a 1996 photo of Edward with their daughter, Anna Brody, on Martha's Vineyard. Associated Press (Associated Press / The Spokesman-Review)

BOSTON – Dena Feldstein Brody sketched out an $8,000 budget for a 12-day family vacation this summer in England, France and Spain. But she made those plans two years ago. Since then, the dollar has plummeted and air fares have soared.

So Brody, her husband and their daughter are setting their sights closer to home, renting a vacation home on Martha’s Vineyard, the popular Massachusetts tourist destination for presidents, celebrities and others looking for a seaside getaway.

“I just think that the dollar is better spent here for the time being,” said Brody, an independent staffing consultant.

Despite recession worries, weakness in the housing market and rising fuel costs, travel trend watchers say Americans aren’t giving up their vacation plans. But they’re definitely scaling back.

Vacationers are paring the number of days they plan to spend at exotic locations abroad, buying all-inclusive foreign travel packages to cushion themselves against currency exchange shocks or just planning trips closer to home.

“They are trading down, but they are not trading out,” said Peter Yesawich, CEO and trend analyst for YPartnership, a marketing company specializing in travel.

Money is tighter for travelers. Gas prices are near record highs – averaging $3.32 a gallon compared with $2.59 this time last year – and analysts expect prices could jump by as much as 75 cents a gallon over the next two months. And the dollar is struggling against the euro, valued at almost $1.60 now compared with $1.33 this time last year.

Nationwide summer travel booking figures compiled by AAA show most of the leading destinations this year are not linked to the British pound or the euro, said Mike Pina, the association’s national spokesman.

The top spots included Orlando, Fla.; Cancun, Mexico; Honolulu; and Punta Cana in the Dominican Republic.

The number of Americans booking trips to Ireland dropped by at least 20 percent, a decline rivaled only by that following the Sept. 11 terrorist attacks, said Brennan Breene, reservations manager for VisitIreland.com. The trend hits particularly hard because Americans are the biggest-spending visitors to the country, he said.

Tour bookings to Europe through the AAA, however, are up nearly 5 percent for summer travel in 2008 compared with 2007, Pina said.

The cruise industry has been reaping business from vacationers attracted by the value of seeing several destinations in one trip and the ability to pay for the package in dollars before leaving.

Still, some cruise lines are adding surcharges of $5 to $10 a person per night to offset fuel prices, said Christine Fischer, a spokeswoman for the Cruise Lines International Association.