SEAT 2B | By Joe Brancatelli
Deal or No Deal?
If you think buying travel is tricky when prices are high, you have no idea how complicated life on the road can be when prices are falling.
Tuesday, April 21, 2009; 10:20 AM
I spend an inordinate amount of time tracking airfares and hotel rates and say this without fear of contradiction: This is the best time in a decade to get a deal. Long haul or short, budget digs or palatial stays, leisure and business travel prices have reached comparative, historic lows.
In other words, time to watch your back. If you think buying travel is tricky when prices are high, you have no idea how complicated life on the road can be when prices are falling. The travel industry doesn't lower prices graciously or transparently. There are always trapdoors, tricks, and an endless parade of extras that can needlessly inflate your fares and room rates.
Consider what follows a cheat sheet to avoid getting cheated in the next few weeks and months. We'll revisit this topic as frequently as necessary to keep you abreast of this most extraordinary time in travel buying.
Buy Now, Check Later
Several carriers tried to raise fares over the weekend, their second failed attempt in as many weekends. (Airlines usually try to raise prices on weekends, when bookings are light, so they can rescind the increases by Monday morning if the lemming-like industry doesn't act in lockstep.) You can look at the attempted price hikes as delusional or an indication that at least some carriers see glimmers of hope for a summer traffic bump. Either way, chances are that we've reached a temporary floor in airfares, so now would be a good time to lock in summer flights.
With the requisite 60-day advance purchase and Saturday-night stay requirement, business class fares to Europe are now as low as $1,798 roundtrip before taxes. That's just a few hundred dollars more than you'll pay for a coach seat on shorter notice later this year. Business-class fares to Latin America are falling, too. Up front fares to Asia remain high considering a rapid decline in traffic, but coach prices across the Pacific are lower than across the Atlantic on a fare-per-mile basis. And you can't complain much about domestic fares: We've already seen several $49-$99 fare wars. In fact, Virgin America, the struggling start-up, has cut some transcontinental fares to as low as $79 one-way this spring.
Although I recommend you buy now, you should always double-check prices again before you travel. There are automated fare-watch programs -- Yapta is a current favorite of price-obsessive flyers -- but you can also do it yourself a few weeks before you fly. If you find a substantially lower fare, call the airline and get a voucher for the price difference, minus an admittedly hefty ticket-rewrite fee.
Beware Bogus BoGos
The low price of premium-class tickets has mooted the classic "buy one, get one" (BoGo) promotion, but that hasn't stopped carriers from trotting out the gimmick in hopes you're not paying attention. Earlier this year, for example, South African Airways offered one for coach travel, but the required "buy one" price was just $100 less than if you had purchased two tickets separately. Qantas ran a 2-for-1 sale on business class seats last week, but its buy-one price was literally twice as much as competitors were charging for a single seat. Also rendered virtually useless in the current market: The much-heralded International Airline Program available with certain American Express cards. It will give you a free companion first or business class ticket when you buy one -- but only if your purchase is at full fare, a price that is now often four or five times higher than the current sale rates freely available in the marketplace.
Added Value or Lower Prices
Never as monolithic as the airlines, the hotel industry is split on how to get heads back on beds. As room rates and occupancy levels have plummeted, some chains (most notably Hilton) have indulged in what the industry calls "naked discounting." That's when you simply slash nightly rates as low as required to fill a room. Other hotel players (most notably Marriott and many pricey resorts and independent properties) are trying to keep published rates high, but larding them with "value added" freebies. Sometimes it's free meals or spa treatments, and sometimes it's several hundred dollars worth of resort "credits" that travelers can use as they wish. Other times, the value-added inducement is third-party gift cards. So far this year, for example, Marriott outposts have offered gift cards from Target and Amazon.com as part of the nightly room rate.
Which is better? Depends on you. I prefer the rate reduction because things like a free Sunday brunch "worth" $45 is useless to a guy whose morning intake is invariably a bagel and coffee. But if you like what the hotel is offering -- and understand its actual retail value -- go for it.
The Blind-Buying Bonanza
Blind bidding for flights is passe now that airlines publicly sell seats at give-away prices on their own proprietary websites. But so-called "opaque" operations such as Priceline.com, Hotwire.com and Lastminute.com have gained new popularity with upscale travelers because top-notch hotels around the world now dump their excess capacity into the blind-booking pools. Even four- and five-star properties work with the opaque sites these days and they sell deeply discounted rooms to travelers who pony up payment before they know what hotel they are buying.
I'm not a fan of blind booking -- to me, lodgings aren't a commodity -- but many travelers whose taste I trust recently have secured huge discounts on desirable hotels and resorts using Hotwire and Priceline. And third-party sites such as Bidding for Travel have sprung up to allow bidders to swap intelligence on what they've scored and which properties currently use the opaque sites. There's still another twist on the bidding sites: Luxury Link electronically auctions accommodations and travel packages at deluxe properties around the world. I have used Luxury Link myself for holidays. If you know the property and what it normally charges, you can bid with confidence -- assuming, of course, you want to travel when the hotel or resort is offering rooms.
The Mileage Markdown
Travel is so slow just now -- airline traffic is down around 10 percent compared to last year's already depressed levels and average hotel occupancy has fallen to around 50 percent -- that airlines and hotels have even begun to mark down the price of staying and flying for free via frequent travel programs. A steady stream of private promotions offering flights for up to 25 percent fewer miles and hotel rooms for substantially fewer points -- has hit travelers' email boxes in recent weeks. To take advantage of these private sales, make sure you're signed up to receive the promotional offers from your favorite airline and hotel programs.
And while we're talking about frequency programs, another point to keep in mind: If you're relatively flush with cash, airlines and hotels are offering lavish points and miles promotions when you book paid rooms and flights. After a two-night stay in a Manhattan hotel last month, I earned enough bonus points for a free night in an Italian resort I've been eyeing for a holiday next month. And all of the major airlines are currently running double or even triple "elite miles" promotions through mid-June. Once you register, you receive bonus miles toward your elite status next year. Earning or upgrading your elite status for 2010 will come in handy if the economy recovers next year.
The Fine Print . . .
One notable exception to the fire-sale nature of travel this year is car rentals. If anything, prices have risen compared to last year. The reason: Rental firms have been hit by the credit crunch and have had difficulty raising cash to finance new fleets. The result is a double whammy: Daily rates, especially for midweek business rentals in major cities, are rising -- and the cars you're renting are older, have more cosmetic damage and may not be as mechanically reliable as they once were.
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To contact Joe, visit his Contributor's page on Portfolio.com.