The world's largest air carrier, Delta Airlines, has hinted it may have to cut its payroll as the tanking global economy takes a bite out of the travel industry.

Delta disclosed in an investor conference that it will reduce its system capacity by 6-8 percent in 2009, compared to the current year.

Delta said domestic capacity in 2009 will be reduced 8 percent to 10 percent compared to 2008, while international capacity will be reduced 3 percent to 5 percent next year compared to this year.

The news comes as a global financial crisis hits airlines hard by reducing demand for seats.

Executives from the major airlines may discuss reductions in capacity at a conference on Tuesday in New York City.

Their pain is also being felt in the hotel industry and other sectors that cater to tourists.

The International Air Transport Association said international passenger traffic declined 1.3 percent in October compared with 2007. That follows a 2.9 percent drop in September.

North American carriers' traffic declined by .8 percent in October compared to the previous year, IATA said. That's only a small change from the .9 percent drop in September. Asian-Pacific carriers' traffic was off by 6.1 percent.

European carriers saw slight improvements in October, as did those in South America. But that performance stands in contrast to double-digit growth rates in the first half of the year, IATA said.

African carriers suffered the largest drop -- 12.9 percent -- in international traffic for the month. IATA said the decline is part of year-long trend of Africa being the weakest market for air traffic.

According to the IATA, the number of passengers traveling on premium airline tickets -- who tend to be business travelers -- dropped 8 percent in September. That's a bad sign because business travel helps drive airline profitability.

Airline analyst Ray Neidl with Calyon Securities said he thinks it's going to be "a very cold winter" for the industry.

Accompanying the pain in the airline sector, hotels are suffering too.

Hotel occupancy across Europe fell 4.9 percent in September compared to the same period last year, and 6.3 percent in October, according to industry analysts at STR Global. Occupancy in Rome, for example, fell 17.5 percent in October compared with the same month last year.

The U.S. hotel industry also posted October declines in bookings and revenue, according to data from STR.

Luxury hotels in financial centers like London and New York appear to among the hardest hit, according to trade group The Leading Hotels of the World Ltd.

The organization said there was some good news among the gloom: Hotels in emerging markets such as Moscow and major cities in Latin America continue to experience strong demand.