If the travel industry during the boom years was a high-priced boutique hotel with big profit margins and a sense of entitlement to go with it, in the recession, it’s an interstate motel with a neon sign reading, “Cheap rooms! HBO!”
- Think big, luxurious, exotic.
- Take advantage of the strong dollar.
- Be flexible: Go where and when the deals are.
- Use the Web, social networking.
- Drive a hard bargain and negotiate.
- Cash in frequent-flier miles.
The recession has not been kind to the travel industry, to put it mildly. With few Americans feeling secure enough financially to blow a pile of money on a trip overseas and the term “staycation” firmly en vogue, vacancy rates on airplanes and in hotels are alarming.
In mid-May, hotel occupancy fell to 51.6 percent, down 10.2 percent from a year earlier, according to Smith Travel Research, or STR. The airlines didn’t fare much better, with American Airlines reporting an 11.7 percent year-over-year drop in traffic in May.
Hotels and airlines have responded by dramatically cutting prices in a bid to survive. The price of a plane ticket has declined from an average of $358 for domestic flights last summer to about $299, says Jennifer Gaines, contributing editor for Travelocity.com. And the average domestic hotel rate has declined 14 percent since last year, she says.
What does this mean for the average traveler?
“There’s a staggering buyer’s market that I haven’t seen in at least 33 years,” says Peter Greenberg, publisher of PeterGreenberg.com and author of “Tough Times, Great Travels.” “It’s almost totally global. With the exception perhaps of Russia and parts of Japan, I haven’t seen anywhere that’s not on sale.”
Clearly, the outlet mall of world travel is open for business. Here are six steps you can take to make sure you reap the benefits.
Think big. For those who have the money to do it, this is the year to take that international vacation you’ve always dreamed about. Higher-end vacations that would have been out of reach for all but the wealthiest travelers are now looking downright reasonable.
Vince Orza, dean of the business school at Oklahoma City University and a cruise enthusiast, found that out firsthand. He and his wife were planning a 10-day river cruise in Eastern Europe when he found an e-mail from a luxury cruise line he’d always wanted to try. The company was offering 65 percent off Mediterranean cruises. Initially, Orza didn’t believe his eyes.
“You almost have to look and see, well, what are the details? What don’t I understand? And the details made it even better,” says Orza. “Everything is included. And you know, for those of us who really are avid ‘cruisers,’ that’s an offer that’s really worth paying attention to.”
Orza jumped on the deal and ended up booking a 14-day cruise for himself, his wife and his daughter for about the same price as his original cruise for two.
“You kind of get the feeling looking around that this is the great year of travel in general,” says Robert Reid, U.S. travel editor for Lonely Planet, a best-selling publisher of travel guides. “There are so many deals that I probably don’t know about. It’s hard to keep up with them all. I’ve seen luxury safaris to Africa, 2 for 1; $600 flights to Australia; and all the deals that Mexico is doing right now.”
Keep an eye on currency. Currency conversion rates have always had a big effect on how much bang U.S. travelers can get for their U.S. bucks. And the relative strength of the U.S. dollar abroad is sweetening the deal for international travelers, says Reid.
“If you go across Europe, the dollar’s a lot stronger — sometimes up to 30 percent stronger than it was a year ago — and so if you look at it from one point of view, you can stay a third or a fourth longer for the same amount of money,” says Reid.
Greenberg agrees: “The euro’s down against the dollar, the pound is down against the dollar, and then you have outright bargains like Argentina, Mexico, Iceland, Australia, New Zealand. Even the Canadian dollar is down against the U.S. dollar, something that was not the case just a year ago.”
Consider a country’s currency when you’re planning your vacation, and you could ride the stronger dollar all the way to a significant savings.
Go where the deals are. The dismal tourism environment is hitting some areas of the world particularly hard, forcing hotels and airlines to slash prices more deeply. Consequently, those who focus too much on their own set of travel dates and destination may lose out on getting the deal of a lifetime.
“There are destinations that overall are seeing deeper price cuts than others,” says Gaines. “This is the year to let the deal lead the way. Go where you can find the best deal possible if you’re really focused on saving money.”
Reid says the way to take advantage of this phenomenon is to go into your travel plans with a list of acceptable places and dates and see who can offer you the best deal.
“If you’re going to pay the normal prices to one place and another place is 40 percent off based on airfare or the hotel you get, maybe you juggle a little bit before you make a decision where you go,” says Reid. “I would be open to a few options and kind of gauge what’s the best deal right now.”
Leverage the Web. Travel sites like Travelocity and Orbitz allow you to search flights and hotels from a long list of providers, but they aren’t the only way to save on the Web. Social networking sites are getting into the act, too, says Reid.
Every week, Twitter hosts “Travel Tuesdays,” where professionals and amateur enthusiasts from the travel industry get together online to talk about the best deals going. “Listening” in on these discussions is a great way not only to save money but also to get an idea of the state of the industry and whether even better deals will be coming down the pike, says Reid.
Most of the online travel brokers also have Facebook and MySpace pages featuring promotional discounts and discussion boards for users.
“If travelers are on any type of social media networking sites, they can certainly find out about deals through those areas,” says Gaines.
Also, keep an eye on your favorite airlines’ Web sites. Several are currently running promotions that feature rock-bottom prices on national and international flights, and if the economy fails to improve, expect even more.
Drive a hard bargain. The distressed world economy has travel companies willing to deal, says Greenberg. “It’s up to the consumer now to figure out really that the advertised prices that they’re seeing from hotels, for example, are just a starting point of the negotiation; they’re not the end point,” says Greenberg. “The hotel says, ‘Our rooms are $79 a night.’ OK, that’s what they are, but listen, what else can I throw in for that?”
He suggests negotiating one-on-one with a hotel representative to get perks like free parking and free meals for kids. “In Las Vegas right now, there are hotels that will sell you the room for $100 a night, give you two tickets to a show and dinner. And for a hundred and a quarter, you can actually star in the show. I’m joking, but not by much,” says Greenberg.
And while airlines have a reputation for having a pricing system that’s as rigid as it is complex, even they may be willing to cut a deal to fill a seat. When Ashley Hunter, frequent traveler and president of HM Risk Group in Austin, Texas, found that the airline she normally uses was charging $500 more for flights to Dubai, United Arab Emirates, than a competitor, she decided to try to negotiate. She called an airline representative, who looked up her history with the company and asked a manager to authorize a price cut. Not only did her preferred airline match the competitor’s price, it also agreed to give her bonus frequent-flier miles, too.
Hunter attributes her haggling success to good price research ahead of time: “I don’t know that necessarily would have worked had I not been able to tell her that the flight was leaving on the exact same day.”
Cash in frequent-flier miles. Airlines are notoriously restrictive about when and where they’ll allow you to use frequent-flier miles, but this year is different.
“It’s the one time in recent history when the airlines are actually becoming more lenient and letting you burn miles because you’re not displacing a revenue passenger,” says Greenberg. “There are that many empty seats.”
Orza is cashing in frequent-flier miles to get to Europe for his cruise, and he found his airline was willing to negotiate for the dates and direct route he wanted. “If you’re flexible, the airlines would just as soon have somebody in a seat than nobody in a seat,” says Orza. While he didn’t get exactly the route he wanted, “doing Dallas (to) Toronto rather than Dallas straight to London for what effectively is $10,000 or $12,000 worth of airline tickets is not a big inconvenience in my book,” he says.
So strike while the iron is hot. After all, in today’s economically uncertain world, who knows when some airline or bank will go under, effectively negating your frequent-flier miles altogether.
If you are heading to a foreign country, find out the most cost-effective way to get cash once you’re there by reading “Best ways to get cash overseas.”