Fears of deflation (i.e., falling prices) are everywhere, but you might find that surprising if you’ve had to travel lately:
Hotel Room Prices
“To sleep, perchance to dream -ay, there’s the rub.” ~ Hamlet.
The Danish Prince is correct – it’s getting tough to sleep affordably out there.
According to the hotels.com Hotel Price Index (HPI), business travel to many of the world’s economic hotspots increased in the first half of 2011, with hotel prices in many top business capitals rising year-over-year.
Carlson Wagonlit Travel says that because of increase demand for rooms, suppliers (the hotels), not buyers (the tired, sleepy you) have the upper hand with room pricing power. Industry watchers expect prices to increase further in 2012.
Tips To Save Money on Hotel Room Prices
- Book Early. As far in advanced as possible. If you’re booking rooms for your clients or employees, don’t worry about who’s going where when. Just reserve the rooms under any name and then change the name later as your travel plans firm up.
- Avoid the Most Expensive Cities. If you can help it, avoid the high demand cities like New York City for your next business trip. Hotel.com’s Price Index maintains a current list of the most expensive rooms in the country
- If You’re a Small Business, You Can Take Advantage of Discounts Like the Big Guy. Large companies have always been able to swing deals, but now small businesses can too. If you’re a smaller company, you can take back some of the pricing power from the hotels by joining CheckINN Card. If you’re large enough, you can try to take advantages of discounts through CLC Lodging. CLC Lodging also manages all the logistics, paperwork, and billing details, all of which can be extensive and time consuming even for the experienced business travel coordinator.
Don’t expect the overall cost of staying in a hotel to come down anytime soon. Jan Freitag of hospitalitynet.org says the airline industry is teaching the hotel industry to charge for everything. And speaking of the airlines . . .
“If the Wright brothers were alive today Wilbur would have to fire Orville to reduce costs. “ ~ Herb Kelleher, Southwest Airlines, USA Today, 8 June 1994.
Running an airline is tough these days, for several reasons:
One, you’re unlikely to hear the words “cheap” & “oil” in the same sentence unless someone is talking about the way it used to be and never will be again. Oil prices are high and likely to remain there, and this means jet fuel costs (an airline’s second biggest expense) are going up too – the Air Transport Association of America, Inc. (ATA) reports that fuel cost have risen 28% this year, 31% alone last August.
The second reason, of course, is the recession and all the lost revenue for the airlines. A third reason is labor costs.
But the airlines have found a way to both re-coup their losses and handle higher fuel and labor cost: they’re gonna charge you for every and anything. And it’s not going to stop – ever. Airways CEO Doug Parker recently said, add-on & ancillary fees are “here to stay.”
Tips To Save Money on Airfare Prices
- Join’em Rather Than Fight’em. The best way to avoid these fees is to become a member of the club, specifically get elite status with the airline you least hate. Obtaining elite status varies by airline and there are many ways to get it (see SmarterTravel Staff’s article: “Discover the multiple paths that lead to elite status”). Start by asking your airline how it works with them.
- Try flying into and/or out of airports outside the city of your destination. For example, if you’re flying to New York City, look at flights arriving in Newark NJ. Then look at the cost to get to your final destination.
Rental Car Prices
In tough economic times, Detroit could count on sales from the car rental industry, if Detroit offered the right discount. Now that car sales are also up, Detroit doesn’t need Hertz & Avis (so much), so those industry discounts are rare, and car rental agencies are hanging on to their cars for a longer period of time. As a consequence, these older cars have higher maintenance cost and those are passed onto you as higher rental prices. Unfortunately, there’s no real way around these higher prices while cars are in such demand.
If you renting from Hertz, check out The Consumerist.com’s money saving tips from an ex-Hertz employee. These tips may just work with other car rental companies too.
You might want to try Enterprise or one of the outlets it just recently snapped up (National or Alamo) for their customer service. Specifically, you can select any car you want, but if at pick up time they don’t have it, unlike other rental companies (so far), they’ll offer you a more expensive car for the same price. If you’re going to pay higher prices, it might as well be for the best car possible.