High fuel prices impact travel industry

July 3, 2008 7:15:28 PM PDT
American Airlines may have to cut 7,000 jobs by the end of the year. The airline said Thursday it's looking at laying off 900 flight attendants. That news came on the heels of another ticket price increase by the major airlines.

The latest hike in airfares was led by United Airlines Thursday morning -- $20 added to every ticket. It's the twenty-first price hike of 2008.

"We're likely to see several more increases in the coming weeks and months," says Rick Seaney, CEO of FareCompare.com, a consumer research group that tracks airfares.

Seaney's advice is to buy your tickets now.

"It's going to get more expensive. Do not procrastinate," says Seaney.

And when you get off the plane, prepare for sticker shock at the rental car counter. At National, Geno Calabresi locked in a weekly price three months ago.

"The price went up over $600," says Calabresi.

Hertz charged Norman and Maria Rickard from England $140 a day.

"I could've bought it. I could've had a good down payment," says Norman Rickard.

Bonnie Frost and her family got off the plane from New Jersey and found their rental car price had jumped as well.

"Yes, an extraordinary amount. Yes, much higher," says Frost.

Two hundred dollars more over five days, but at the end of a long flight what are you going to do?

"Just pay, just keep paying, know what I mean? Badda bing badda bing," says Calabresi.

Last July, Hertz stock was trading near $25 a share . Thursday it was $6.90. Is that why prices at the counter are going up? The company's public relations chief said that information wasn't available Thursday because department heads were taking a long holiday weekend.

The San Francisco Convention and Visitors Bureau reports high prices have not yet hurt the tourist industry here.

"However, if the costs continue to escalate and the airlift continues to be a challenge, we're worried about that," says Joe D'Alessandro, CEO of the Visitors Bureau.

D'Alessandro says he's focusing on marketing the city to China.

"The middle class in China represents a small percentage of the population, but it's about 250 million people, almost the entire population of the United States that have the ability to travel," says D'Alessandro.

So the industry is hoping there will be more Chinese tourists in San Francisco's future and until the economy improves, I'll be taking public transportation to Chinatown.