Summer Travel, Now --- Industry Turmoil Changes Rules on When to Lock In Air Fares, Hotels, Car Rentals
The Wall Street Journal
February 19, 2003
By Ron Lieber, Michelle Higgins and Eleena de Lisser
With the travel industry in turmoil, the world is on sale. But one nagging question is stopping many people from pulling out their credit cards: Are prices about to get even better?
It's an age-old question for spring and summer travelers, but the calculus of deciding when to book is even more complicated this year. For one thing, the possibility of war has left travel companies unsure about how to price everything from airline tickets (demand would probably go down in many cases) to car rental (demand would probably go up, as people choose vacation spots closer to home).
In addition, there are a host of new rules that are changing the game for leisure customers. Big-city hotels, which often used to practically gouge last-minute travelers, now routinely unload cheap rooms that don't pop up until just a few days before they are available. Cruise lines, on the other hand, are faring surprisingly well right now -- meaning deals to popular spots like Mexico and the Eastern Caribbean are getting snapped up relatively early.
And that maxim about the best air fares being available more than 21 days before the flight? You can forget about it. Airlines are now unloading so many cheap fares that the same deep discounts are sometimes available right up until a week before departure. This change, combined with the continued growth of travel sites like Hotwire, Priceline and Site59, has led many travelers to assume they can wait until the 11th hour to lock in their summer vacation plans.
But there are a host of factors that determine whether it makes sense to book now. Interviews with dozens of travel agents and executives suggest that the answer varies widely depending on where you are going and how you are getting there. If you are planning to take a flight or cruise to Europe this summer, for example, prices aren't likely to fall much more -- actually, they are more apt to creep higher.
By contrast, major cities like Las Vegas and Orlando typically see a falloff in convention business in the summer; that could mean bargains for families who are willing to wait and keep an eye out for discounts. Even Disneyland and other theme parks, where summer is peak season, could see last-minute deals because of a falloff in foreign visitors.
Here's how pricing in several different slices of the travel industry is likely to play out, and what that means for your booking plans.
Book Now: Europe
Wait Awhile: Caribbean, Hawaii and Mexico
Fares to London, Paris and Madrid have been coming down sharply, partly because of some bad timing: Airlines began to put more seats into Europe just as war jitters started. As a result, while deals are expected to come and go in spurts until the political climate around thewar settles, getting to Europe is about as cheap as it's likely to get.
In past years, transcontinental flights were often priced out of sight during the busy summer vacation season. Tickets for this June, July and August are as much as $700 cheaper than last year, according to Tom Parsons of Internet air-fare discounter Bestfares.com. In fact, you cannow get to Europe and back in the peak summer months for about what it costs to stay in a midmarket hotel in New York City.
On the other hand, if hot spots closer to the U.S. are on your itinerary, it probably can't hurt to hold off. Even though it's still winter, airlines have already started discounting to major warm-weather destinations -- something they almost never do this time of year. That suggests that as spring and summer unfold, and people are less desperate to escape the cold weather, deals to places like the Caribbean, Hawaii and Mexico will only get better. One exception: Florida, which is so popular as a spring-vacation spot that there is a lower chance of a last-minute steal on air fare. However, there may still be some bargains available on travel search engines, such as Orbitz and SideStep.com.
Domestic summer fares will hit the market in the next couple of weeks, with coast-to-coast prices as low as $200, Mr. Parsons predicts. Some travel agents argue that consumers should jump on those early discounts quickly, because they could run out. But new competition may ensure a steadier supply of those deals than in previous years. JetBlue, for example, is adding almost 34,000 more flights from New York to Long Beach, Calif., in the next few months, according to Back Aviation Solutions, a consulting firm.
For people who hate the feeling they are paying more than the guy next to them, there are some new ways to gauge whether you are getting a good price. Expedia's "Fare Compare" feature, for example, allows people to see the best fares other customers are finding on the most popular air routes.
Book Now: Major spas and resorts; for big cities, only if you are seton a particular hotel.
Wait Awhile: Everything else
Hotels used to work like airlines: They penalized late bookers. Now, most will take the business whenever they can get it.
Hotels in major urban areas in the U.S. are still reeling from the dropoff in business travel. They are trying to recoup some of that revenue by offering cut rates to leisure travelers on the weekends. So far this year, rates are down the most in San Francisco, Boston, New York, Miami and Phoenix, according to Pricewaterhouse Coopers. But cities elsewhere -- from Chicago to Washington, D.C. -- are also on sale.
Luxury hotels, too, are softening their prices -- and are likely to keep dropping some rates into spring and summer. Stacey Lewis, a public-relations executive, booked a room last month at the Hotel Majestic in San Francisco for a weekend and got the rate lowered from $240 to $149 simply by asking. "I really just said, `Can you do anybetter?' "
Major convention destinations also offer potential bargains, because conventioneers thin out in June, July and August. In Las Vegas, fore xample, hotel rates are cheaper, Sunday through Thursday and are widelya vailable when major conventions aren't in town. Vegas.com posts a calendar of events to help visitors avoid the crowds when boxing matches, conventions or concerts are in town.
One good strategy on hotels: Keep calling for a lower rate. Once you get a deal, cancel your old reservation and rebook.
Beach resorts on both coasts book up fast over the summer, especially weekends. But mountain resorts start to clear out after the snow melts. The Wydham Peaks Resort & Golden Door Spa is currently going for roughly $480 a night. But come summer, the rate drops. "At the last minute in July or August you will get a rate as low, if not lower, than $150 per night," says a spokeswoman.
Of course, if your heart is set on a particular hotel, don't bank on it being there when you need it. The good news: Rooms in four-star hotels are going at cut rates right now, so you don't have to be plagued by the idea that you are getting ripped off by reserving early.
Book Now: Almost everything
Wait Awhile: Not a good idea
With rental cars, there is a simple rule to remember: book early.
With so many people unsettled by the idea of long-haul travel, demand for rental cars could well spike in coming months. Luxury rentals, in particular, could be in short supply, as some of the people who might otherwise have flown overseas use that savings to upgrade to flashier cars.
The optimal time to book is four to six weeks out, says Jon LeSage,v ice president of Abrams Travel Data Services in Long Beach, Calif. That's typically when you get the best combination of price and choice. Indeed, Budget of Beverly Hills, which operates eight locations in Los Angeles, is offering a Ford Mustang Convertible GT at $59.99 a day through March 16 if you book online, roughly 40% off the usual price.
You may want to get started even earlier for perennial spring break destinations like Daytona Beach, or year-round favorites like Disneyland.
For summer travel, sizeable discounts are usually available through the middle of July, says Laura Rebello, director of marketing at Budget of Beverly Hills. Those prices begin turning up online about 60 days outfrom the travel date. The biggest reason to book early? Most rental-car companies don't have cancellation penalties. You are free to reserve a car even if you aren't sure you will be making a trip.
Book Now: Caribbean, Alaska
Wait Awhile: Europe
Cruise companies made the same unwitting mistake that some of the airlines did. They moved a bunch of ships to Europe just when U.S. consumers were beginning to get skittish about that region.
The upshot: There's absolutely no hurry to book a summer cruise in Europe. If war starts, prices are only going to tumble further. But if you are planning to sail through Alaska or the Caribbean, you may want to reserve earlier. Demand for those tickets could rise as the people who decided not to go to Europe look for cruises closer to U.S. shores.
As for travel in the spring, again, take your time booking. While cruise lines are offering assorted incentives for March and April sailings, they will be even more desperate for business in the event of a war.
If you are looking for something more decadent, ultra-luxury liners are beginning to drop their prices into mass-market range. This week Seabourn Cruise Line, a unit of Carnival Corp., began throwing in free business-class air fare from major North American cities for 26 different two-week yacht cruises in Europe this summer. Fares start at $6,991, about 40% off published rates.
Judging from previous experience (during the Gulf War and after the 9/11 attacks), these fares tend to be short-lived because demand is fairly high.
Book Now: U.S. and Canada
Wait Awhile: Eastern/Central Europe, Asia, South America
Package-tour operators are expected to raise prices as much as 10% this year, mainly because of currency fluctuations, according to the U.S. Tour Operators Association. But that is not stopping them from turning to financial incentives to lock in early bookings. Abercrombie & Kent, for example, has a British Isles vacation that lets two passengers in for the price of one, or $7,995. But it has to be booked by March 31.
In general, you can bide your time reserving spots to Eastern and Central Europe, Asia and South America, but not with trips in North America. Tauck World Discovery, a Westport, Conn. tour operator, scrapped its Bali and "Treasures of Turkey" tours for 2003. But its packages to Alaska, Western Canada and Western U.S., which include stops at landmarks like Yellowstone and the Grand Canyon, are up 30% this year.
Tuscany and other Italian destinations may also be less likely tocough up bargains. Italian travel vendors are holding back offering discounts out of pride, says Ilene Braun, vice president of marketing and sales for tour operator Gate 1 Travel in Glenside, Pa.
Evan Perez contributed to this article
Book Now, or Wait?
Deciding when to book has turned into a giant game of poker with travel providers. Here's how to play your hand:
Jump On It: Only if your heart is set on a specific hotel.
Hold Off: Major cities like San Francisco and NYC, where businesstravel has dried up.
Pillow Fight: Five-stars have more pricing wiggle room -- so hit them up for discounts.
Jump On It: Europe. Prices can't go too much lower.
Hold Off: Wait on the Caribbean, Hawaii, Mexico -- those deals are just beginning.
Buckle Up: Price turbulence means even 11th-hour spring break escapes to Florida may be possible.
Jump On It: Almost everything.
Hold Off: Not a good idea: demand is expected to rise as people stay closer to home.
Wheeling and Dealing: You can always cancel, so keep sniffing around for better deals.
Jump On It: Alaska and Caribbean. They'll be go-to places if war breaks out.
Hold Off: On Europe. Global uncertainty will spawn more price cuts.
Hoi Polloi: Some ultra-luxury lines are charging mass-market prices.