By Joe Brancatelli
December 11, 2008 -- It may be a verbal manifestation of the contentious relations between business travelers and the travel industry, but we always end up talking about who has the pricing hammer.
Over the last few years, the industry has had the metaphoric tool and it has pounded us with big increases in airfares, hotel rates and car rental prices. But guess who has the hammer now? Us. Wherever you look, business is plummeting and the travel industry is suddenly interested in negotiating, keeping our business, making nice and convincing us that it values our loyalty and our custom.
There is a trapdoor here, of course. The downward spiral of the world economy may mean that the passing of pricing power back to the buyer comes too late for you. You may be among the many losing your job or being told that business travel at any price is no longer in your budget.
But if you'll still be on the road next year, here are some of my thoughts for getting much more bang for your travel dollar. And don't be embarrassed to swing the pricing hammer with gusto. They won't be shy when the hammer changes hands again and they've got our heads pinned to the anvil.
KEEPING YOUR ELITE STATUS IN 2009
More than any year since 2001, airlines and hotels seem willing to negotiate to let you maintain your elite status even if you haven't accrued the published number of miles, segments or stays. If you're at risk of losing your status or being busted down a level, pick up the phone and call your program's elite desk. Start with the simplest approach: Ask for a mulligan for 2008. You'll be surprised how receptive the airline or hotel will be. And if they won't give you a free pass, chances are they will negotiate. They may ask you to fly a certain number of miles or complete a certain number of stays in the early months of 2009 to keep your status. Either way, you've nothing to lose by asking and negotiating.
It is also a great time for you to shop your business around. Airlines and hotels are desperate to steal top-level customers from competitors. If you're unhappy with your current airline or hotel, call another carrier or chain and ask them to match your status. Assuming your travel needs match their capability, they'll probably grant you immediate status for 2009. At worst, they'll ask for a few early flights or stays to test your good intentions.
BEATING DOWN NIGHTLY HOTEL RATES
Just today, the leading hotel-industry research firm reported a startling fact: Hotels around the country were literally half-empty during the first week of December. That was a ten-point drop in the average occupancy rate compared to last year. Average daily rates are plummeting, too. And the higher up the food chain the hotel is, the more likely it's suffering: Occupancy and rate declines are most severe at luxury lodgings.
Needless to say, this dreary landscape is a gold mine for us. The thing to remember is that hotels will try everything before they lower their nightly rate. They'll offer all sorts of perks--room upgrades, free breakfasts, free cocktails, gift cards, free Internet, spa treatments--before they offer a rate reduction. And their first offer of a price reduction is likely to come in the form of a free additional night. If the extra perks are valuable to you, take them. If extra nights work for you, also good. If only an absolute rate reduction will work, hold firm for the price cut.
How do you get deals? If you stay with one of the big chains, you'll see the best rates at its proprietary Web site. Make sure you ask the site to display all of the available rates at all properties in the chain's "family." Keep in mind that hotel pricing now mimics the airline fare structure: The further ahead you can book, the bigger the discounts. Don't forget your AAA, AARP or other affinity-group discounts. And watch your E-mail: The special promotions and rate reductions are coming hot and heavy as hotel chains woo their existing customer base in hopes of convincing you to stay a couple of more nights or book a few extra trips.
If you prefer independent hotels, you have two strategies: Check out the specialty booking engines like Quikbook. They will often have special deals you can't find anywhere else. (I especially like Quikbook because most of its rates do not require pre-payment.) But don't ignore the independents' own Web sites. They often have value-added and perks-laden packages that they don't give to third-party sites. Alternately, call the property directly and ask to speak to a manager on duty and negotiate with him or her. Finally, if you expect to visit a property several times next year, make sure to introduce yourself around during your first stay. Get their business cards and pass yours around. Then call ahead before you arrive the next time and find out what deals may be available--or may be invented just for you.
WINNING THE AIRLINE FARE WARS
As I explained in last week's edition of Tactical Traveler, load factors are falling even as the airlines have slashed capacity by double digits since Labor Day. And looking past the holidays, bookings are extremely weak, especially internationally, where the Big Six have moved so much capacity in the last few years. It will be a buyer's market in 2009, especially if oil stays around $50 a barrel.
We'll learn a lot about the exact contours of the fare landscape in January and February. These are the weakest months for both business and leisure travel and the deals are almost always the best of the year. If you see $99 one-way fares on transcon routes or fares in the $129 one-way range to London from the East Coast, you know it's going to be a banner year. There should be big deals on business-class travel to Europe, too.
Generally speaking, I'd "short" the market. Wait the airlines out wherever possible. This may not be the year for booking early. There is nothing on the horizon to indicate that there will be a rush of traffic in 2009. The longer those seats stay empty, the more desperate the airlines will become--and the more creative they will be with pricing. That said, do keep in mind that international business-class fares are now yield-managed, too. Thirty- to 60-day advance-purchase fares with a Saturday stay can be as much as 75 percent off the walk-up price.
It will be most interesting to watch how fares to Asia move in 2009. Until now, traffic and prices had held up (at least compared to Europe), but transpacific business is suffering now, too. We've already seen some moves from traditional pricing hawks such as Qantas and Singapore Air, so indications are that there will be noteworthy bargains next year. It may also help that Delta's pricing team will be in control of Northwest's extensive Asia route network.
GRABBING THE CHEAPEST FREQUENT FLYER AWARDS
It should be a decent year for frequent travel award availability. Airlines and hotels have jacked up award levels for 2009, of course, but I think we'll see more availability at the most restricted levels than we have in recent years. And we're already seeing something unique: "Sales" on frequent travel awards. British Airways recently offered 50 percent off the price of all awards and hotel chains have been peppering their frequent stayers with specially priced awards, especially in slumping resort destinations like Hawaii. Make sure that you've signed up for your programs' promotional mailings, then examine them carefully. You may be very pleasantly surprised in 2009.
Finally, a general tip: Don't be greedy and remember the value of your time. There's almost always a way to knock $20 off a room rate, $50 off an airfare or a few thousand miles or points off a frequent flyer award. But what's the value of your time? At a certain point--and only you know where that point is--the value of the time you spend looking for a further discount will outweigh the additional money or mileage you may save.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
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This column is Copyright © 2008 by Joe Brancatelli. JoeSentMe.com is Copyright © 2008 by Joe Brancatelli. All rights reserved.