How Do You Know When to Book and When to Wait?

AskEd & AnswerEd
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Editor's Note: This story was originally published on February 9, 2009. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: airfare, Air France, AskEd & AnswerEd, booking strategy, car rental, cruise, Ed Perkins, hotel, Hotwire.

Over the years, one of the questions travelers ask me most frequently deals with when to buy their air tickets, cruises, tours, and hotel accommodations. The latest one was typical:

"My brother and I are planning a trip to Scandinavia in June of 2009. We have not made flight reservations yet and are wondering when the best time to buy tickets is."

Deciding whether to buy now or wait for a better deal is one of the biggest crapshoots in the travel business. Nobody knows for sure. My short answer is, "As long as the weak economy persists, wait for a really good sale." But that is a gamble—you could pay more if you wait, but then prices could strengthen.

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The Overall Picture

The most important factor in travel prices this year is the weak economy. As long as demands are weak, prices will be weak. In a weak economy, airlines, cruise lines, and hotels try to keep prices up as best they can for as long as they can, and when they post rates for more than a few months ahead, they generally present what they hope they'll be able to get. But when the flight/sailing/stay dates get closer and seats/cabins/rooms aren't filling up, the usual solution is to post a sale.

Since late last year, I've seen an almost continuous round of airfare sales, in both domestic and international markets. Today, at the beginning of February, SmarterTravel.com's All Airfare Deals page lists several current short-term sales to Europe (as well as lots of domestic deals). Air France is promoting a "sale" to Europe; round-trips from San Francisco (for our West Coast reader) to Stockholm are $789, total, including taxes. As typical with such sales, the buying period is short—until February 15—and you must complete travel by April 2.

I see the same pattern with cruise and hotel rates. As I've noted elsewhere, the big mass-market cruise lines are cutting rates on upcoming cruises, and even the upscale lines are adding extras. You see the same pattern with hotels. Big-chain Accor, for example, keeps the pipeline full with press releases of upcoming sale rates at many hotels throughout its system.

Trying to Outguess the Future

Here's my suggestion for looking at airfares, cruise rates, and hotel accommodations for this summer:

Figure that summer 2008 was a time of high fares and rates. Most airlines and cruise lines had hiked prices (or added phony fuel surcharges) and hotels had raised rates to compensate for the spike in oil prices. There's an added kicker for Europe: The dollar was weaker against the euro than it is now. That means 2009 summer fares and rates shouldn't be any higher than last year's, and should probably be lower.

Check out the fares and rates for last year. The easiest way to follow airfares and hotel rates is to log onto Hotwire's unique TripStarter and enter your origin and destination points. TripStarter then displays a day-by-day graph of the round-trip airfare on the route for all of 2008 (and 2007, if you ask). And it also displays average rates for 3- to 4-star hotels. Figure that you shouldn't pay any more than last year's prices for the dates of your trip. If what you currently see is higher, wait for a sale. If you see something well under last year's prices, grab it—it's probably a good deal.

TripStarter covers most important domestic cities, but international coverage isn't as comprehensive. If you're heading to any of 19 popular European cities, you're OK. If you're heading somewhere else—and, for our reader, TripStarter doesn't yet cover either Helsinki or Stockholm—try someplace closer, such as London, Paris, or Frankfurt.

I don't know of any similar price tracker for cruise rates. But you can generally spot good deals when you see them.

The Gamble You Take

This year's Super Bowl illustrates the "buy or wait" dilemma. As I'm completing this—the Friday before Super Sunday—the cable news networks are reporting on empty hotel rooms in the Tampa Bay area and discounted Super Bowl tickets. It's apparently the classic, "Suppose they gave a ... and nobody came?" The fact is that in a really bad economy, travelers are not willing to pay top price. And apparently air seats are available, too. This year, if you had wanted to attend the Super Bowl, you'd have been well-advised to wait until the last minute to buy tickets and arrange accommodations. But adopting this strategy incurs a risk: If you guess wrong, prices go up, and rooms sell out, you either pay top dollar or you don't get to see the Super Bowl.

The biggest gambles for summer travel are with airfares and cruise rates. Once you buy most cheap air tickets, you're locked in—at best, if fares drop, you face a hefty charge to exchange your air ticket. These days, the exchange charge usually wipes out any reduction you might see. With cruises, too, you're locked in, although some lines may offer a "price guarantee" for early purchase.

Hotels are easier. In most cases, you can make reservations, then cancel and rebook without any penalty.

What I'd Do

Facing our reader's problem, my strategy would be to wait until March or April to buy any air tickets. Then, I'd track available "sales" as closely as possible, through SmarterTravel as well as other sources.

With cruises, I'd wait until a few months ahead, unless I found a deal that guaranteed to refund any reductions after an earlier purchase.

With hotels, I'd reserve as soon as I found something attractive. But I wouldn't buy into a nonrefundable deal until April or May.

(Editor's Note: SmarterTravel.com is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns Hotwire.)

 
 
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