CANCUN, Mexico -- ALG Vacations president Ray Snisky said airfares are headed upwards in 2025 for most Caribbean and Mexican destinations because of airline capacity cutbacks.
Speaking at the ALG Ascend 2024 conference in Cancun last week, Snisky told about 1,300 attendees to plan for fewer seats to all-inclusive destinations next year.
"We're driving advisors and their clients to try to book as early as possible. I think the idea that there are going to be a lot of last-minute, low-priced deals is going to be tough," Snisky said.
Snisky's comments jibe with what Delta Air Lines said in its Q3 earnings report. Delta said Q3 overcapacity in the industry put downward pressure on its operating margin, but that things started turning around in Q4 because of reduced capacity.
In July, U.S. airlines flew 5.8% more capacity, measured by available seat miles, than they had a year earlier, Cirium flight schedule data shows. But in September, capacity growth from the prior year was just 1.2% as airlines, especially discount carriers, curbed schedules to counter sagging summer airfares.
Struggling Spirit Airlines is one of the discount carriers cutting service. Spirit said that its fourth-quarter capacity will be 20% less than a year earlier.
ALG is one of the larger buyers of airline tickets to feed its all-inclusive resort operations.
With the exception of the Dominican Republic and Puerto Vallarta, every major destination in the Caribbean and Mexico has a capacity reduction next year, he said.
Airline capacity has been ample this year, Snisky said, with the number of seats going into Cancun, for example, up 20% in the first quarter.
Despite rising airfares, Snisky said that "the value of the all-inclusive experience will continue to ring true."