NOW, ABOUT ALL THOSE TRAVEL DEALS...
By Joe Brancatelli
January 29, 2008 -- If you think we've seen a lot of airline and hotel deals in the last few weeks, wait until you see what is coming. Travel at every level--leisure, business, luxury, budget--has cratered and a real sense of desperation is setting in. Airline and hotel marketers are frightened and the bargains will come in swarms now.
That said, not everything that the travel industry says is a bargain really is. I see a lot of stinkers masquerading as bargains. And I won't lie to you. It's getting harder and harder to separate the wheat from the chaff, the genuine price break from the phony baloney.
As a bit of context to the parade of price cuts you see at JoeSentMe these days, I thought you'd like to know a little about the thinking and decisions that go into choosing the deals I write about--and the ones I choose to ignore.
One airline you haven't seen on our Steals & Deals page lately is L'Avion, the French all-business-class carrier that is now owned by OpenSkies, itself a division of British Airways. As you can see on the Steals & Deals page, OpenSkies is selling a remarkable all-in roundtrip fare of $1,000 between New York and Amsterdam. (The fare can get down to $750 with a discount code.) The deal is in OpenSkies' prem+ cabin, which is actually better (wider seats with more legroom) than the business class on L'Avion. Yet L'Avion's winter deal on its Newark-Paris/Orly route is $1,479 roundtrip--plus about $130 more in taxes.
Why does Paris command about $600 more than Amsterdam? Well, duh, Paris is Paris. I personally prefer to spend time in Amsterdam, but the rest of the world tends to prefer Paris. So you expect fares to Paris to run higher. But that's not all of the story. Last year at this same time, coincidentally before L'Avion was sold to OpenSkies, L'Avion was offering a $1,319 roundtrip to Paris. Given the state of the economy and the fact that oil is now selling for less than half of last year's price, a $160 year-over-year price bump on its winter "deal" is rather extraordinary. The only conclusion: L'Avion is selling more seats than last year and needn't discount as much.
Don't get me wrong. L'Avion's current fare is good stuff. Paris roundtrip in a decent business class for just $1,600 or so is nothing to sneeze at. But it ain't a "deal" by L'Avion's own standards. And I can't justify writing it up as such.
L'Avion's year-over-year price bump is nothing compared to a gimmick trotted out earlier this month by South African Airlines, a carrier that just doesn't have the discount mojo. It's always been a bit snooty and it could get away with snooty when it was virtually the only carrier you could choose if you wanted a direct flight between the United States and South Africa.
But with new competition from Delta Air Lines and a rotten travel market, SAA has been forced to discount. And I was certainly intrigued when it began promoting a 2-for-1 sale. The deal seemed straightforward enough: Pay $1,399 roundtrip in coach before taxes and surcharges and get a second coach seat for free before the taxes and surcharges. The extras weren't insubstantial ($394), which meant two tickets would have cost $2,187. Pretty good--if, of course, you and a companion could reconcile yourself to dozens of hours of flying down the back.
As I always do before I write up a deal, however, I went searching for trapdoors and gimmicks. And it didn't take long to find one. On South African's own Web site, I was able to book a ticket to South Africa for $1,155 including the taxes and surcharges. Two seats, of course, would total $2,310--or only $123 more than SAA's supposed two-for-one deal.
When I called South African for clarification, one of the airline's executives said the $1,155 fare was a "competitive response" to another airline.
"So how can you advertise 2-for-1 pricing when I can buy two tickets for just a hundred bucks or so more than the supposed 2-for-1 price?" I asked.
"That lower fare is going away soon and our 2-for-1 promotion can be purchased for a longer period of time," she explained.
In fairness, that line of logic made sense to her. She wasn't being evasive or tricky. She believed what she was saying. It's a strange kind of airline insanity that allows airline executives, even well-meaning ones, to ignore the incredibly obvious.
Of course, 2-for-1 pricing is one of the classic traps of deal hunting. About the same time that South African was running its 2-for-1, Qantas ran a 2-for-1 deal. It added the fillip of a short buying window: Just four days to cash in the offer.
When the promotion broke on an early Saturday morning, I went to the Qantas Web site to check it out. And true to its word, Qantas was selling two tickets to Australia from the United States for the price of one. The one problem I found was when I looked at the price of a business-class seat: about $19,000 roundtrip from New York.
Yikes, I thought. (I might have screamed it out loud.) Even when you're getting two seats in Qantas' terrific business class for the price of one, that $19,000 fare will literally take your breath away. So I surfed over to Orbitz.com to check its grid of fares. Since Qantas and United are essentially a duopoly on U.S.-Australia routes, I figured I'd need to look at some unorthodox routings on third-country airlines to get a fair read of the market.
But guess what I found? United, Qantas' direct competitor, was selling business-class fares on a walk-up basis for about $8,900 roundtrip. In other words, two tickets on United at full fare would cost less than one Qantas ticket with a freebie for a companion.
Was Qantas playing a game? No, I don't think so. It has actually been charging 19 grand for a seat and was legitimately giving a freebie if you bought one during the four-day sale. And as anyone who flies the Pacific knows, United sucks and is notably bad on its Australia routes. Its planes are old, they're outfitted with a generations-old business-class seat and the in-flight service is poor.
Here's the question, though: As bad as United is and as good as Qantas is, can any airline really give you enough to charge twice as much as the other guy? Especially when the twice as much is a matter of ten grand.
And that brings us right to the matter of "value." As you can see on the Steals & Deals page, United has now launched a huge business-class sale on flights to Sydney and Melbourne. Now that $8,900 fare from New York is down to about $5,000. From the West Coast, its business-class fares are even lower. In fact, United's business-class sale fares are almost exactly what Qantas is charging for seats in its new premium economy class.
So what's the real deal here? Qantas at two-for-one when it is charging twice as much than its much-less-regarded competitor? The competitor when it cuts its premium fares to the level of the other guy's less-lavish class? I admit I'm not sure. All I can say is that I didn't write up Qantas' 2-for-1 deal. With appropriate caveats, I did flag the United deal for you.
Finally, a warning. As I've been writing for two decades, never assume a great price you see (even one I mention) is the lowest rate that's out there.
Last week, for example, a reader said he would book a weekend hotel package that I covered on the Steals & Deals page. It was, I reaffirmed to him, a bargain: a deep discount on an upgraded room at a lovely hotel; free breakfast; and a free lunch or dinner, too.
The next day, though, the reader E-mailed again. He'd called American Express' Platinum Travel Service and it had an even better bargain: $50 less for an equivalent package at the same hotel. The Amex deal was restricted--you must book through Amex and use the Platinum card to pay--and thus wasn't available to everyone. Still, it is a better deal for those who can get it.
In other words, watch your back--and your wallet. There's no bottom line in travel just now.
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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