PHILADELPHIA — College students Natalie and Robert Kelly are forgoing their annual Christmas trip home to Utah this year because of the shaky economy and higher airfares.

Natalie, 22, and husband Robert, 27, a graphic design student at the Art Institute of Philadelphia, in previous years flew to Salt Lake City for $300 or less each. The same roundtrip ticket this Christmas costs $400 and up.

"It's just too much money and too much stress associated with the money," said Natalie Kelly, a history major at the University of Pennsylvania. "We're going to get our own Christmas tree and hang out in Philadelphia. We're not upset about it. We've made our decision."

The Kellys are not alone. People are waiting longer to book vacations in hopes of finding deals — and some won't be traveling at all.

"Christmas and almost all holidays are times of rather extreme peaks and valleys in demand," said American Airlines spokesman Tim Smith.

While airplanes are still expected to be near full on peak travel days, fewer people overall will travel this Thanksgiving and Christmas, said David Castelveter, spokesman for the Air Transport Association, an airline industry trade group.

The reason: Rising unemployment, an erratic stock market and higher fares have made consumers uneasy about spending money.

Add to that a 10 percent cut in airline capacity from a year ago — a decision the industry made during the summer, when crude oil cost nearly $150 a barrel and gasoline cost $4 a gallon.

The airlines express optimism and say their advance bookings are in line with last year.

"There's no softening around Christmas," US Airways spokesman Morgan Durrant said.

JetBlue Airways said its Christmas-New Year's bookings are "still looking favorable." But "we see a bit of softening for Thanksgiving, and I think other carriers do as well," said JetBlue director of revenue management, Roger Johnson.

To entice passengers who are on the fence, Northwest Airlines became the first major carrier last month to offer holiday airfare sales. Other airlines matched the lower fares.

"The bargains aren't going to be on the peak travel days, but on the periphery days you'll see some pretty good deals," said Peter Yesawich, chairman and chief executive officer of Ypartnership, a marketing services firm specializing in the travel industry.

"Consumers in my view will continue to travel roughly in the same numbers, but they will be far more value conscious than we have seen," Yesawich said. They will spend less on hotels, gifts and retail buying.

Rick Seaney, chief executive officer of the airfare-research site www.FareCompare.com, said there are "awesome" airfare sales now because airlines have empty seats, although the cheapest tickets are not available on the busiest holiday travel days.