Great Places, Great Prices (right now!) Thanks to the discount airlines, it's the best time to Travel in years
(MONEY Magazine) – For travelers, it is the best of times. Discount airlines are rapidly expanding, bringing their low fares, simple pricing, and perks like extra legroom and live TV to dozens of cities and hundreds of routes around the U.S. Major carriers, meanwhile, just back from the brink of bankruptcy, are adding flights, dropping prices and even launching their own low-fare operations to keep travelers from defecting to the discounters. "It's a buyer's market," says Ed Perkins, a long-time consumer travel advocate and founding editor of Consumer Reports Travel Letter.
And the travel bargains of the season ahead won't be limited to air fares. The fight over consumers is intensifying across the travel industry as the economy improves and more Americans take to the road for vacations and business trips. Major hotels are luring travelers with low-price guarantees to fend off discount websites, while an oversupply of hotel rooms in a number of cities will keep rates low. And the cruise industry, suffering from a glut of ships ordered in the 1990s, is offering a sea of discounts, especially on luxury cruises. Cunard, for example, is selling one-week European cruises leaving from England on the QE2 for $999 per person. "It's probably cheaper to go on a cruise than to stay home," says Richard Copland, president of the American Society of Travel Agents.
Before you go, note this: Navigating the increasingly competitive travel landscape requires a few new strategies. You won't, for example, be able to tap into the full range of discount airlines via any one of the travel websites, like Travelocity, which many of us have come to rely on. So we've assembled--with the help of travel experts and industry sources--a guide to what's going on with air fares, hotels and cruises, and how to use that information to get the best deals on each. We've also highlighted seven cities where the recent arrival of one or more discount carriers has lowered fares. Between those changes and the hotel deals that we list, each makes a great base for a vacation this spring or summer. (The fares listed, provided by BACK Aviation Solutions, are the lowest published fares offered for the route in May. Hotel prices assume double occupancy.)
Finally, you'll see that we've peppered this guide with additional advice on making the most of the travel season ahead: how to best use your frequent-flier miles; where in the world the American dollar still packs a punch; what gear to take on your trip; whom to contact if you want to attend the Athens Olympics; and why (and when) it's still worth consulting a travel agent, despite the ease with which one can book travel plans online these days.
And now, read on.
Once focused on out-of-the-way airports and flying short distances, discount carriers are swooping into territory that was once exclusively dominated by the majors. In the process, they're bringing fares down 30% to 50% compared with two or three years ago. For example, last-minute coast-to-coast fares--regularly $1,200 to $2,000 a ticket on major airlines--can be had for less than $200 round trip, thanks to new transcontinental service from carriers like AirTran, America West, ATA, JetBlue and Southwest. A growing number of major cities in the U.S. now have at least one low-fare carrier option, among them Atlanta, Boston, Chicago, Dallas, Denver, Las Vegas, Los Angeles, New York, Philadelphia and San Francisco. And vacation hot spots in Mexico and the Caribbean are being targeted by discount airlines, including America West, JetBlue and Spirit.
At the same time, major airlines, in retreat for the past two years, are aggressively trying to protect their key routes from the fast-growing discounters. A year ago, Delta rolled out Song, a low-fare carrier designed to compete with New York City-based JetBlue on East Coast routes to Florida. Fares from Denver to six cities have been cut in half, thanks to a battle brewing there between Frontier and United's new discount carrier, Ted, which started flying at the end of February. And when JetBlue launched flights from Boston to the West Coast in January, American Airlines matched JetBlue's $79 one-way fares, bringing one-way fares down as much as 50%.
What do you give up by flying low-fare carriers? They don't tend to offer elaborate frequent-flier programs (though, as we explain on page 63, leisure travelers are increasingly being snubbed by loyalty programs anyway). And most have just one class of service: coach. But in general the line between low-cost and traditional airlines is blurring, and flying a low-fare carrier no longer means no frills. Many discount airlines fly brand-new planes, have slightly more legroom in coach and offer nice little perks, like live TV and satellite radio.
The growth of low-cost airlines shows no sign of slowing. They flew nearly one-quarter of all domestic passengers last year, up from 16% in 2000 and 9% a decade ago. By 2006 that number will be at least 40%, predicts J.P. Morgan airline analyst Jamie Baker. The list of new markets currently or soon to be under siege by low-fare carriers seems endless: Southwest will bring its low-fare service to Philadelphia--a longtime US Airways hub--in May with fares as low as $79 each way to Chicago and Orlando, and $99 to Phoenix and Las Vegas. Atlantic Coast, a commuter airline partner of United Airlines, is reinventing itself as Independence Air and plans to bring cheap fares to Dulles Airport in Washington, D.C. with 350 flights a day this fall. Even WestJet, the Canadian low-fare airline, is expanding to the U.S. later this year with flights to Arizona, California and Florida. "It seems like there are no markets that low-cost carriers aren't willing to enter," says Darin Lee, senior economist at aviation consultancy LECG.
How to get the best air fare
The key to finding the best deals is knowing which low-fare carriers serve your destination. They tend to operate in densely populated markets, so you won't find discounters targeting cities like Santa Barbara or Savannah. But with most good-size cities, it's worth starting with one of the big booking sites--Expedia, Orbitz or Travelocity--if only to establish a baseline price. These online travel agents make it easy to see fares from multiple airlines and search for the lowest prices. The problem is that none of them gets you all of the carriers' fares; in fact, two of the biggest low-fare carriers, Southwest and JetBlue, don't release their fares to any independent sites.
The answer is to search for discounts at one of the fare-compare websites that function like travel search engines. The best is SideStep.com, where you can download free software that will scour airline sites (including JetBlue and Southwest) and consolidators, and bring the prices together in one place.
Once you find the best rate and most convenient times, your next step is to visit the most competitive carriers' own sites to compare prices. Many airlines offer special rates on their own sites and often reward you with bonus frequent-flier miles for booking with them rather than a third party.
The improving economy has boosted occupancy, so hotels aren't offering quite the deals that you'll find in the airline world. But there is enough competition to keep a lid on lodging costs. The average daily rate for a hotel room in the 25 largest markets fell 1.2% to $97 in 2003 and is expected to rise a modest 2% this year, according to Smith Travel Research. "There are some cities where there are still extraordinary discounts," says Bjorn Hanson, lodging industry analyst at PricewaterhouseCoopers, citing Boston, Miami, New York, Orlando, San Diego and San Francisco. For example the Ritz-Carlton, Coconut Grove, with views of Miami's Biscayne Bay, offers a deluxe room and breakfast for two for $239 a night, or 40% off.
How to get the best room rate
Start with one of the big hotel consolidator sites, such as Hotels.com or Quikbook.com, which buy or reserve blocks of rooms at a deep discount and then resell them to travelers. Hotels.com has more room inventory but also requires you to pay for your room when you book, unlike Quikbook and hotel companies.
Again, once you find a rate you like, call the hotel directly or head to that hotel's own website to see if you can get a better deal. Most major hotel chains, including Choice, Hilton, Marriott and Starwood, now promise to match the best rate you can find for their rooms at discounter websites. But Marriott takes it up a notch. In January it rolled out its "Look No Further" best-rate guarantee. Find a better price--either at a third-party website or through a travel agent--and Marriott will actually take another 25% off that price. Booking directly with a hotel has other advantages: Cancellation policies are more lenient, and you have a better chance of getting an upgrade or a superior room.
Thanks to rapid growth in the industry--capacity has doubled to more than 9 million berths a year in the past 10 years--cruising is one of the cheapest ways to vacation. A good travel agent can help you sort through the myriad cruise offerings. But if you want to do it yourself, there are a number of online options.
How to get the best cruise deals
The big online travel agencies like Expedia and Travelocity have made a push into selling cruises. But you will often find better deals at one of the specialized cruise discount sites. The largest, and one of the best, for both published and negotiated fares is mytravelco.com. A new site, cruisecompete.com, gives you an overview of available cruises by specific cruise line and ship. You enter a request, and the site shops around at more than a dozen discount agencies, then e-mails you each quote as it is received. Last-minute prices--for sailings within four weeks--are especially low right now. Carnival has a four-night cruise from Long Beach, Calif. to Baja Mexico for just $269 per person.