Rick Hudnett recently pulled into a Chevron station near his home in Orlando. He wishes he hadn’t.
Groupon is a bargain website that promises daily deals and “unbelievable” customer service. But Stuart Lord says he got neither when he bought a VIP wine package in California’s Sonoma Valley — a deal he later discovered was significantly overpriced.
Here are the specifics: The offer was for two people for two nights at the Sonoma Valley Inn and two “VIP” wine tastings. Total price: $169.
“The advertisement said it was worth $320 — a 47 percent discount,” he remembers.
Only, it wasn’t.
If you thought the travel bargains were unbelievable this year, just wait until 2010.
I’m fully aware that this prediction flies in the face of conventional wisdom. I mean, how many travel experts have you seen on TV lately, warning that the deals are going, going, gone?
They’re everywhere. But they’re probably wrong.
Q: Can you give me an idea of the kinds of rates you’ve seen, compared with summers past?
Bason: It’s truly an amazing time to travel if you’re a bargain-hunter. Hotel occupancy rates have plummeted along with the economy – more than 55 percent of the hotel rooms across the US were empty on any given night in July. And this translates into deep discounts for consumers. Opaque rates in New York City have dropped 32 percent. San Diego is down by 29 percent and Orlando is off by 22 percent compared to last summer, just to name a few.
Traffic to the three major online travel agencies — Expedia, Orbitz and Travelocity — is trending upward, as bargain-hunters snap up discounted airline tickets, hotel rooms and rental cars. It helps that the agencies eliminated some of their booking fees a few months ago.
Expedia’s bounce (in blue) is the most dramatic, with traffic levels markedly higher than it was at this point a in 2008. The other two OTAs (Orbitz in yellow and Travelocity in green) are holding steady, versus last July’s levels.
You might think that rebounding traffic would translate into an upward stock price. Not necessarily.
Carol Hodes thought the “special” $209 room rate offered as part of an upcoming convention at the Bellagio Las Vegas was a reasonably good deal — about $10 a night off the regular price.
“Then the group holding the event announced two weeks ago that the price had been lowered to $159,” she said. Skeptical, she ran an online search and found that rooms were going for as little as $119 a night.
All across the travel industry, people who thought they were getting deals are discovering that they aren’t. As airlines slash their fares, passengers with advance reservations are finding that their tickets weren’t bargains. The “low” hotel rates? Turns out they had a lot lower to go. Ditto for cruise tickets and rental cars.
Fortunately, Hodes hadn’t booked her room at the Bellagio yet, so she easily locked in a lower price. “I’m almost afraid to look and see if the price has been lowered again,” says Hodes, a writer who lives in Old Bridge, N.J.
Others aren’t so lucky. Many hotels refuse to refund a rate difference once a reservation is made. Most airlines balk at giving cash refunds when their prices fall, preferring to offer a credit and sometimes adding a hefty change fee, too. Maybe the only exceptions are car rental companies, which still allow you to cancel and rebook your reservation without penalty.
Erik Hastings, a syndicated talk show host who declared 2009 the “year of the travel deal” says most of the bargains are on the up-and-up. “There’s been a tremendous increase in packages and deals since the beginning of the year,” he told me. “I think 90 percent of them are the real thing.”
But how do you know? Here are a couple of tips:
1. Be a deal-watcher
“One of the best way to know what a deal is — or isn’t — is to monitor specials over a period of time,” says Matthew Cheng, the founder and president of eCoupons.com. For example, if you want to go to Jamaica, you might sign up for the Air Jamaica and Sandals electronic newsletter a few months before making your reservations. If you did, says Cheng, you would see that one-way fares from New York to Montego Bay have fallen from $164 in November to $119 in December to $92 in January. “Meanwhile,” he adds, “Sandals has offered promotions of up to 60 percent off and three nights free.” By getting an idea of what is — and what isn’t — a bargain, you can steer clear of the non-bargains.
2. If it looks too good to be true, it is
This is the cardinal rule for deal-finders. Many fake bargains are literally incredible. When a travel agent offered Lee Houskeeper a “deal” of $100 a night at a bed-and-breakfast near the end of the Light Rail during the presidential inauguration, “I said, ‘Book it, Dano’ — without looking at a map,” he recalls. Housekeeper, an editor who lives in San Francisco, had scored last-minute tickets to the inauguration and was grateful to get any accommodations close to Washington. Big mistake. It turned out the inn was a little bit further out of town. He had to pay a $100 cab fare to take him to the train station. Lesson learned? If it looks too good to be true, chances are, it is.
3. Beware of the bait-and-switch
It’s a favorite game of travel companies that are desperate for your business. “Look for phrases like ‘certain restrictions apply’ or ‘subject to booking fees’,” says Ellie Kay, author of “Living Rich for Less.” For example, one restaurant Web site offered a $25 gift certificate for only $2. Unbelievable? Yes. While some participating restaurants had only a few stipulations — like “dining in only, not good for carry out” — others were far more restrictive. In extreme cases, they limited the coupon to “one per party, per month, per restaurant” or “valid with a minimum food purchase of $40, excluding alcohol, 18 percent gratuity added to full bill,” according to Kay. That’s no deal. It’s an elaborate way to get you in the door and then hit you with a full-price meal.
4. Pay attention to the details
The fine print is where you’ll find the line between a true bargain and a bogus offer. For example, Barbara Hakala was quoted a $33 per night rate at a Ramada property near Disney World recently. “That wasn’t the problem,” she says. “The problem was the hotel charged a mandatory $5 per night fee for parking, use of the in-room microwave and refrigerator,” says Hakala, a massage therapist from Springfield, Va. So her total rate was $38 a night, which is still pretty decent, but not the same deal she thought it would be. Never mind the fact that the hotel probably won’t remove the fee even if you don’t have a car and don’t need to use the refrigerator or microwave. The point is, the rate is deceptively low, and you wouldn’t know about it unless you reviewed the fine print. So read up — or pay up.
5. Use the right tools
Social media is a terrific way to determine if an offer is right for you. Shooting a message to an online forum or a microblogging site like Twitter when you have a question is one of the best ways to find out if a bargain is a bargain. I also like Yapta which can show a trend-line for air fares. “You can see the airfare pricing history on a number of flights between various city pairs,” company spokesman Jeff Pecor told me. Of course, Yapta can also monitor your flight and notify you if the price drops. But airlines make it difficult — sometimes impossible — to get a refund. One Yapta user, Mary McInnis, recently e-mailed me when the price of her United Airlines flight to Hawaii dropped from $1,332 to $857 per ticket. United deferred her refund request to United Vacations, through which she had booked her trip. United Vacations hasn’t responded to her request for a refund.
6. Assume nothing
Even basic terms like “free” and “discount” can mean one thing to you but an entirely different thing to a clever marketer bent on selling you something. Edgar Dworsky, who blogs at the site consumer Web site Mouseprint.org recently found an interesting definition of “buy one, get one free” on the Spirit Airlines Web site. You would assume anyone who takes advantage of a “buy one, get one free” offer would be able to book two flights for the price of one, right? Not right. “Spirit had a very different idea,” he says. “The free trip had to be taken separately from the paid trip, by the same person, taxes and fees had to be paid again, and the free trip had to be months later than the paid trip.” And that assumes Spirit is still in business when he qualifies for the second flight, he adds. Bottom line: ask the travel company to define its terms before you buy. Don’t make any assumptions.
Remember, behind every bargain there’s a smart travel marketer who is often using sophisticated technology to determine how much you’d be willing to pay for your next airline ticket or hotel room. Many of these people know where the line between a deceptive ad and one that’s legit is, and they dance on it — now more than ever.
“Your best bet,” Stuart MacDonald, the chief executive of the Canadian travel site Tripharbor.com, told me, “is to be an informed traveler and let common sense rule the day.”
Couldn’t have said it better myself.
Here’s more evidence that hotel rates may be about to fall off a proverbial cliff. Earlier this week, experts predicted some modest rate declines. But after Wall Street’s meltdown, it became a more significant downturn. Now there’s evidence that the trajectory was already set long ago.
Here are average daily room rates from last summer, according to our friends at Travelocity.
Now, the idea with any business is to increase rates over time. But that’s not what happened last summer …
Rates in these cities were off by anywhere from $2 to $5 a night. That’s the wrong direction.
Let’s go to the tape. Here’s Travelocity’s Genevieve Shaw Brown:
Hotel average daily rates in many cities have remained relatively flat year-over-year and in some instances decreased. Travelers are able to find value in their hotel stays and keep a vacation within reach. The hotel stay is typically the most expensive part of any trip, so a discount on your room can offset other costs, whether it’s an increase in airfare or higher gas prices.
From where I’m sitting, I see hotel rates heading south in a pretty dramatic way.
For the sake of the hardworking men and women in the lodging industry, I hope I’m wrong. For the sake of the travelers who have been priced out of an affordable vacation for the last four years, I hope I’m right.
Can’t wait for those hotel bargains I predicted a few days ago? Thanks to this week’s Wall Street meltdown, you don’t have to.
They’re already here, according to one hotel executive. And they’re probably going to get better.
Larry Cohen is a senior vice president at Lake Buena Vista Resort Village & Spa, a two-year-old condo/hotel/resort a mile from Walt Disney World in Orlando. “Even though we are so close to all the major attractions in Orlando, we are feeling the effects of the stock market downturn a great deal,” he told me.
Before I continue, a disclaimer. I love a deal as much as the next guy, but no one benefits from a fire sale in the long term. So what’s happening to Cohen and his colleagues nationwide isn’t good news, strictly speaking
According to Cohen, the stock market meltdown isn’t solely responsible for the turn. It helped, though.
It’s not just this one major day that has caused the downturn, but it certainly has created more cancellations, shorter stays and a great deal less spending by the people still traveling.
Another problem has been the financial stress the fuel costs have caused with various tour brokers that normally deliver thousands of international and domestic clients to our area. One main operator recently went into bankruptcy and stranded thousands of passengers in Orlando and in the UK.
Clearly, the traveling public both domestic and international, are tired of all the bad news they read and hear daily in all media. A day like yesterday just takes them over the top, even if they are not directly affected, they feel like they better cut back on leisure type expenses and either postpone, shorten or stay considerably closer to home for their vacations.
But it isn’t just the guests who are creating deals by canceling their trips. Hotels are part of the problem, too. When faced with a downturn, they panic.
Most immediately start dropping rates, giving food, beverage and gas away, and in some cases offering two-for-one stays.
Rate integrity goes away and it becomes a tremendous buyer’s market.
This, of course, is wonderful for the travelers, but devastating for the operators. It also signals more negative news to potential travelers that the market is becoming desperate, so there must be something really wrong. And there goes the vacation.
In our case, you can add to the problem the real estate aspect, with the lenders going away, very few people are willing to buy a second home type product, even though it is a tremendous buyer’s market right now.
Bottom line: a week like we’re having is enough to take prospective hotel guests “over to the negative side” and it takes a lot to get them back.
But for those who come back, the reward is an inexpensive vacation.