Lending Club Blog

Recession Travel: Must-Have Summer Tips

Planning on taking a trip this summer? One summer ago, gas prices were at an all-time high, stay-cations were all the rage, and the annual summer getaway seemed like something out of a 1950’s-era Norman Rockwell calendar. What a difference a year makes.

Now, instead of skyrocketing fuel and agoraphobic family outings, the culture of the summer vacation has changed completely. Gas prices have come down by nearly half of their previous highs. Hotels and resorts are desperate to gain customers. License plate bingo is now available as an iPhone app. There’s nothing standing in the way of mom and pop throwing the kids in the car and heading off toward some random national landmark… Oh yeah. There is that whole recession thing.

But even a recession can’t keep down an adventure-seeking, fanny-pack-toting American this summer. There are recession-proof ways of beating the work week blues, even for those people whose work weeks have suddenly involved a lot less work. Cheap alternatives to travel are everywhere nowadays, and most of the credit should go to auction-style vacation websites like Priceline.com and Hotwire.com.

Here’s how they work: Hotels, airlines, and rental car agencies invariably have leftover inventory that doesn’t sell, be it rooms or seats or smelly old Dodge Neons. Their solution is to hand the selling duties over to these auction websites so that they can move some of their stale services. The auction sites, in turn, ask customers to bid on certain packages in their destination city, and then the sites take the highest bidder. It works for the hotels, flights, and rentals because it doesn’t let off the appearance of desperation or price-cutting. It benefits the auction sites because, well, people are giving them money. And it benefits Joe Vacationer because he just got a room in a five-star hotel for $179 a night.

Ah, but what would a deal be without a catch? The auction sites are great, but you have to be prepared to deal with the consequences of a decision. Purchases are nonrefundable. Actual hotel, plane, and rental names are not revealed until after you sign on the dotted line. It’s a big commitment to make, but it’s also a big savings to be had.

The New York Times agrees:

“With published rates already so low, travelers are finding that opaque travel deals are even better than in the past. According to Brian Ek, a Priceline spokesman, users can save 40 percent on airfare (“up to 60 percent at the last minute”), as much as 50 percent on a hotel room and up to 30 percent on a rental car.”,

But which auction site gives you a better bang for your buck? The answer might depend on what you’re looking for.

Bidontravel.com has a thorough post on the differences between the two sites, and its breakdown gives the price edge to Priceline but the security edge to Hotwire. For instance, bidding blindly on a hotel for Priceline might net you a lower price, but your hotel is likely to be chosen from a wider area and there’s no guarantee of where your price will land. Hotwire on the other hand lets you see the price beforehand and narrows its neighborhoods to a greater extent.

“I always compare them,” travel expert Don Nadeau says, “and go with the one that gives the most quality for the money on the dates I need. You should be satisfied with either company, as long as you realize that you can’t change anything once you’ve paid and you won’t get a refund if your plans change.”

Putting the two services to the test with a flight reservation supports the theory of low price versus security. Let’s say you live in San Francisco and want to fly out to New York to surprise your mom for Mother’s Day (replace “mom” with Derek Jeter and “Mother’s Day” with Yankees game, if you’d like). Getting started on both Priceline and Hotwire is simple. The home page of each site will have you surfing curiously through prices in an instant.

The price results offer a bit more separation, though. Hotwire’s featured rate is $247 round trip through something called a “Hotwire Hot Rate,” which Hotwire maintains is code for a good deal on a good airline. The Hot Rate doesn’t tell you for sure how you’ll be flying, though. Its other prices are mostly no more than $20 over the $247 price, and they do reveal the identities of the airlines. Several United flights made the list.

Priceline’s results are noticeably lower than Hotwire’s. The lowest price on Priceline is $218 (plus $20 in fees and taxes) for a roundtrip ticket on a number of different carriers – Delta, American, Virgin, and U.S. Airways. The price point sure is nice. But details for Priceline’s trips are a little more sparse and a lot less guaranteed than they were on Hotwire’s. In one instance, the listed price of $218 was placed immediately above a price for a nonstop flight at $528. Was the lower priced fare making a stop on the LOST island or something?

Still, working with either website can certainly cut down on the expenses of travelling. And if an auction site doesn’t tickle your fancy, there are still many other options to choose from, too. Places like Orbitz, Expedia, and Travelocity claim low-price travel as well.

This summer, there really is no excuse not to hit the road or fly the friendly skies for a little R&R. Gas prices are low. Travel destinations are desperate to have you. And online travel sites have rendered the recession moot…. Well, maybe “moot” is the wrong word. You might have to settle for the three-star hotel at the two-star price.

Thursday, May 7th, 2009 at 6:42 am

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