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SEAT 2B | By Joe Brancatelli

Summer Forecast: Clear(er) Skies

A passenger enters the arrival hall of Hong Kong's international airport last month. Many airlines around the world are struggling to keep costs down due to the high price of oil.
A passenger enters the arrival hall of Hong Kong's international airport last month. Many airlines around the world are struggling to keep costs down due to the high price of oil. (Philippe Lopez - AFP/Getty Images)

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By Joe Brancatelli
Portfolio.com: Business Travel
Tuesday, May 6, 2008; 10:36 AM

Here is some good, old-fashioned irrational exuberance: I don't think travel this summer will be as arduous or as infuriating as it was last year.

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My comrades in the commentary class disagree, of course. They rightfully point out the dark clouds casting the proverbial pall over the summer travel outlook: Airfares are skyrocketing. Fees for everything from ticket changes to checking bags are jumping. Airports and aircraft are crowded, flights are delayed or canceled, and service levels have deteriorated. Hotel rates are rising. Gas prices are headed to the moon, and the nation's automotive infrastructure is crumbling. And the dollar is in the tank overseas, so we can't even escape by going Over There.

But your curmudgeonly companion here in Seat 2B somehow sees silver linings this summer. A batch of airlines has gone out of business recently, so that should mean fewer flights crowding runways -- and fewer delays. The government has imposed caps on flight schedules at the New York airports, and that will mitigate some of the problems at the national aeronautical choke point. The orgy of price hikes imposed by the airlines this year has probably passed the tipping point. Such a rapid runup is likely to depress demand; I think the airlines will panic and start discounting to get butts in seats. Hotels have pushed up prices a bit too fast also; they're already beginning to bargain to keep heads on beds. Even the weak dollar has shown some tentative signs of a revival in the last week, so international-travel costs this summer aren't likely to be as high as we were predicting even a month ago.

A word to the wary, however: Even irrational exuberance has its limits. This will be a challenging summer, and you'll need some strategies and tactics for maximizing your opportunities. Allow me to be your tour guide.

Watch for Fast Fare Sales

This won't be a season filled with big breaks broadcast via huge newspaper ads. The airlines will probably rely on brief sales that are announced only through select distribution channels. So if you're looking for a sale to a particular destination, sign up for the fare-watcher features from travel agencies such as Orbitz.com or Travelocity.com. Another good choice: The hyperactive alert system from FareCompare.com, which allows you to choose the routes, dates, airlines, and class of service you want to monitor.

Break the Hotel Chain

Hotel-rate rises have been fueled by our own reliance on the frequent-guest programs of the major worldwide hotel "families." We often don't look past the chains when we're seeking a hotel bargain -- and they price accordingly. The solution? Check an independent site such as Quikbook.com. It offers discount rates from thousands of independent properties around the nation. Independents also offer another benefit: diversity. Unlike chain properties, each offers its own quirks and charm.

Look for Dollar-Friendly Destinations

Planning an overseas holiday this summer? Despite the dollar's rapid descent against the euro in Western Europe, it is relatively strong in Eastern Europe. You won't have Paris, but Budapest is a charming stand-in. The Dalmatian Coast, across the Adriatic Sea from Italy, does a passable imitation of the Amalfi Coast. In Asia, the Hong Kong dollar is tied to the greenback, so prices remain stable. (By the way, I don't know a single person going to the Summer Olympics in Beijing.) Closer to home, Argentina is cheap and trendy; everyone comes back raving about Buenos Aires and schlepping a case of Malbec wine. And don't forget Mexico: At 10 pesos to the dollar, it's a terrific bargain. Just avoid the sterile, overpriced resort ghettos like Cancún.

Use Your Loyalty Strategically

Airline frequent-flier miles and hotel frequent-stay points are the Zimbabwean dollars of travel: They are printed with abandon, and it takes millions of them to get the simplest commodity. Planning ahead in hopes of scoring the "best" rewards at the "restricted" levels is a Sisyphean task. But most programs allow you to cash in extra miles or points for virtually any available seat or hotel room. Using the so-called unrestricted option is a terrific strategy when you are traveling at the last minute or on a whim. One example: Continental Airlines is selling advance-purchase business-class seats from Newark to Zurich this summer for as little as $1,800 roundtrip, or 100,000 restricted OnePass miles. That means the miles are worth just 1.8 cents each. But walkup tickets to Zurich this summer will cost about $6,700 roundtrip -- or 250,000 unrestricted OnePass miles. That's a much heftier payout of 2.6 cents per mile.

Stay Home

A summer getaway needn't be far away; consider hanging out in your hometown. Every decent hotel has "value-added" packages that bundle room accommodations with everything from in-room movies and museum admissions to spa treatments and shopping discounts. A package at the Ritz-Carlton, Denver, for example, includes the room, wine and fruit, breakfast in bed for two, and one admittedly practical amenity: free valet parking.

The Fine Print . . .

A followup to our merger column and the potential payoff for outgoing Northwest Airlines chief executive Doug Steenland: According to a Securities and Exchange Commission filing, Steenland has given up his potential merger cash-out package of $7.8 million. He traded it in for a new one worth $18.3 million. It's contingent on the merger with Delta Air Lines closing by the end of the year and his employment terminating on January 1, 2009.

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To contact Joe, visit his Contributor's page on Portfolio.com.


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