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Bargain bin: 2009 may be year of the discount

2009 is shaping up to be the worst year for business and leisure travel since 2002. But there's an upside to this, with big discounts all around.
/ Source: Portfolio.com

Hoteliers and airline executives have hit the panic button, and that means price breaks and bargains travelers haven't seen in years.

Demand for airline seats and hotel rooms is traditionally weak in January and February, and the travel industry always discounts lustily. But 2009 is already shaping up as the worst year for business and leisure travel since 2002, when U.S. markets were suffering from a post-9/11 slump. “We're no different than any other industry,” the general manager of a swanky Florida resort told me last week. “There's no business and no immediate prospect for business. So I'm doing anything I can to fill my rooms. If I have to throw in free breakfasts or slash my rate, I'll do it. What choice do I have?”

Actually, travel is different. Business is much worse, reflecting its status as a leading indicator of economic hard times. The airlines, for example, thought they had prepared for the worst last fall when they cut about 10 percent of the nation's seat inventory from the schedules and grounded hundreds of older aircraft. But that has proved insufficient: Passenger demand has fallen even faster than the schedule cuts. Plummeting oil prices have helped carriers trim expenses — at last year's peak prices, energy represented half of an airline's costs — but it also means there's more room to slash ticket prices.

Within hours of each other last week, half a dozen domestic carriers launched domestic fare sales — and the others promptly matched. Besides fares not seen in years — JetBlue Airways, for example, cut prices from the Northeast to Florida to as low as $74 one-way and AirTran Airways posted a $64 price between Atlanta and Chicago — the sales are unusually long. If you can purchase tickets within the next week, some prices are valid for travel through June, a startling break since post-New Year's sale fares usually end in late March. And there is every indication that deeper price cuts are coming. Although Virgin America advertised a $139 one-way sale fare on its transcontinental routes, I found several days during February when prices on New York-San Francisco flights were as low as $109.

International fare sales are also coming fast and furious. Just before Christmas, British Airways cut business-class prices to Europe to as low as $2,000 roundtrip. And BA's boutique carrier, Open Skies, is selling seats in its terrific prem+ cabin between New York and Amsterdam for just $1,000 roundtrip. If you buy during the next two weeks, the fare is valid for travel through the end of May.

Last weekend, Qantas Airways unleashed a four-day sale to Australia. Qantas rarely discounts, so it was surprising to see the airline knock about 20 percent off its lowest coach fares — and absolutely shocking to see that it was offering the discount for travel through mid-September. Two other well-regarded Pacific Rim carriers known as pricing hawks are discounting too. Cathay Pacific Airways has knocked as much as 60 percent off the price of business-class seats between San Francisco and Hong Kong if you book seven days in advance and travel by March 31. On some days, the fare is now as low as $4,700 roundtrip. And Singapore Airlines has even posted 20 percent discounts on the world's longest flights: Its 18-hour-long, all–business class nonstops to Singapore from both Los Angeles and Newark are selling for $5,995 roundtrip when you travel during the week and book 14 days in advance.

Unlike the airlines, hotel inventory continues to grow even during the recession because properties planned two or three years ago are now gushing from the construction pipeline. The result of the growing supply and falling demand? A frenzied round of price cuts, promotions and value-added offers.

Five of the leading global hotel “families” — Hilton, Hyatt, InterContinental, Marriott and Starwood — last week announced rich, prime-the-pump promotions for their respective frequent guest plans. Hilton, for example, is offering double points to members of its HHonors program for every stay until April. The HHonors program permits “double dipping” (earning points and frequent-flier miles for each stay), so many Hilton properties are also offering sextuple miles for guests who participate in Delta's SkyMiles plan.

Meanwhile, to build occupancy at its hotels and resorts on weekends, when business travelers are scarce, Marriott properties in the United States, Canada and Latin America last week began offering rates that include free breakfast for two adults. And when value-added deals just won't do, hotels are slashing rates. One example: The new Fairmont Battery Wharf in Boston. Facing stiff competition from another newly opened luxury hotel (the Mandarin Oriental) as well as Boston's existing deluxe digs, the Fairmont Battery Wharf has literally cut its rate in half. Prices usually start at $299 a night. Until April 15, however, $299 will get you a two-night stay.

Here's another example. Need a romantic getaway for Valentine's Day? How about a night high up in the Roman hills at the lavish Cavalieri hotel? It's part of the Waldorf-Astoria Collection now and rooms are going for just 222.50 euros, quite a discount from last Valentine's Day, when the hotel was called the Rome Cavalieri Hilton and I priced accommodations at 650 euros.

If there's a caveat to this unprecedented series of travel discounts and bargains, it's this: There is no single best source to score the deals.

To find the lowest airfares for any particular route, you'll probably have to cross-check the airlines' proprietary Web sites against third-party booking services such as Orbitz.com and traditional brick-and-mortar travel agents. (In general, however, Tuesday and Wednesday are the cheapest days to fly; Saturday stays and seven- to 30-day advance purchases are required for the lowest fares.) Hotel chains usually reserve the lowest room rates and the best promotions for their own sites, although Quikbook.com offers great rates at independent properties in large cities. And it never hurts to call direct to the hotel and see if you can score a better deal at the last minute.

One final thought: If you spend hours doing research, you can almost always save an additional $30 on a fare or another $10 on the nightly room rate. But is that really a cost-effective use of your time? Over the years, I've found the “best” price is the one that balances a fair fare or room rate with the time it takes to find it.

The fine print ...
About the only time you'll pay premium prices for travel in the next few weeks is in Washington for next week's presidential inauguration of Barack Obama, and for the Super Bowl in Tampa on February 1. And even the Super Bowl isn't drawing the crowds it did in 2001, the last time the game was played in Tampa. I found rooms at a major chain hotel 20 miles from Raymond James Stadium for less than $120 a night.