That may halt a two-year decline in occupancy levels, figures Robert M. Mandelbaum, research director at PKF Consulting Inc. in San Francisco. Travel mania will also be a boon to car rental companies, which hope to build on two consecutive years of record profits. In recent years, most of the major rental companies have been spun off from the auto makers. Anderson sees room to raise prices ''more than just a little bit'' this year. Price wars, in short, are passe, and moderation is the watchword for travel companies.
Consumers can only hope that they're wrong.
Growth in hotel room supply will slow, stabilizing occupancy levels and room rates. Airlines will also try to avoid price wars. Higher fuel prices and labor costs will put pressure on airline profit margins. Attempts by hotels to control staffing and amenities in order to keep costs down could end up degrading the customer experience. The McGraw-Hill Companies Inc. All rights reserved.