Do you expect increase in airfares
Jan 18th, 2002, 05:06 AM
#1
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Do you expect increase in airfares
With increased security, but the gov't supposedly taking over in Feb. do you think airfares will increase, stay the same, or decrease? In other words, should we book flights months in advance or wait for specials? Any finance gurus out there? Thanks
Jan 19th, 2002, 07:18 AM
#9
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We've been watching a certain time period for a trip in March and it almost looks like they went up last week and are sloooooowly coming back down to where they were before the security increase. I do agree with Jim, if you find something that sounds good to you (and you've been doing your "homework") - GRAB IT!
Jan 19th, 2002, 03:23 PM
#10
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I just returned from my travel agent inquiring about costs to Spain in April or May from Edmonton, Canada (Air Canada now flies direct to Madrid from Toronto - a first and I thought cheaper alternative)...
$1400 Cdn (about $900US) with tax. A year ago it was only $1200 with tax. This is just another example what a monopoly does for the consumer. Are these people not supposed to be trying to entice us to travel again?
At this point we aren't going.
$1400 Cdn (about $900US) with tax. A year ago it was only $1200 with tax. This is just another example what a monopoly does for the consumer. Are these people not supposed to be trying to entice us to travel again?
At this point we aren't going.
Jan 20th, 2002, 05:01 AM
#11
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You're so right Serk! For all the whining and complaining from the travel industry, prices are absolutely no different then they were last year on most routes. Just read yet another article about how caribbean travel is down 30% in the Travel section of the times. Called one of the hotels listed in the article whose business is off to negotiate a lower rate, would they budge on their $ 400/night rate? No way. We aren't going there either. Also fights to the caribbean just went up 3 days ago. Go figure. I can't understand why they just don't lower the rates a little if they want the business, especially given the fact that many people are out of work, fearing a job loss or earning less than a year ago and need an incentive to spend.
Jan 20th, 2002, 08:38 AM
#12
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Welcome to the wonderful world of Yield Management. Airlines and many major hotel operations have systems to help them make pricing decisions. To oversimplify, if I have a 200-seat aircraft flying to Madrid from Edmonton on Thursday, May 2, I know there is a certain percentage of the seats that I can expect sell at certain price points. If I reach Sunday, January 20 and I've sold "X" number of seats in relation to a certain target, I can anticipate whether I can get more, less or the same for "X" number of remaining seats, based on historic data or anything else that may play into the mix. No need to add those cheap "K" and "Q" class seats to those I've already sold if things are going okay already.
Between now and the date that aircraft actually leaves the ground, there will be seats sold at a myriad of different prices and the price for a seat you see right now is not a "hard" price. It could change within the next hour. It could change several times this week and it may well do that.
Likewise, a hotel room rate during the Daytona 500 is a much different rate than the very same room and the very same service in the off-season. A number of times, I have booked rooms at a given rate on an online booking site and then gone back weeks or even months later to alter my reservation for the same room at a lower rate. It's worth staying on top of, when you're talking about shaving $20-$30 a night off a rate for all the effort of paying attention and making a few keystrokes at the right time.
Rates and fares are only partially related to the cost of providing the service or accommodation. More importantly, they relate to AVERAGES -- and your job is to end up paying well below that average. It's certainly not my problem if somebody in the suite next to the one I bagged for $89/night paid $450 or in the seat across the aisle put up four digits. If you find a $500 ticket to Madrid, I can guarantee you that is NOT what everyone else on the plane paid to be there.
The more flexible you are with dates and specifications, the more likely you are to be able to find a deal.
Example: I will be flying to a major European destination and staying at a very nice Sofitel this spring. If I booked that EXACT same trip today for the exact same flights I am on and stayed in the exact same hotel, I would be paying more than $1,500 for the airfare and $258/night for the room. I'm paying $740 per person, with 10,000 bonus miles thrown in and breakfasts every day -- instead of the SAME thing for more than $2,000 per person without the bonus miles. Obviously, there are some people who can afford that -- but I'm not one of them!
Between now and the date that aircraft actually leaves the ground, there will be seats sold at a myriad of different prices and the price for a seat you see right now is not a "hard" price. It could change within the next hour. It could change several times this week and it may well do that.
Likewise, a hotel room rate during the Daytona 500 is a much different rate than the very same room and the very same service in the off-season. A number of times, I have booked rooms at a given rate on an online booking site and then gone back weeks or even months later to alter my reservation for the same room at a lower rate. It's worth staying on top of, when you're talking about shaving $20-$30 a night off a rate for all the effort of paying attention and making a few keystrokes at the right time.
Rates and fares are only partially related to the cost of providing the service or accommodation. More importantly, they relate to AVERAGES -- and your job is to end up paying well below that average. It's certainly not my problem if somebody in the suite next to the one I bagged for $89/night paid $450 or in the seat across the aisle put up four digits. If you find a $500 ticket to Madrid, I can guarantee you that is NOT what everyone else on the plane paid to be there.
The more flexible you are with dates and specifications, the more likely you are to be able to find a deal.
Example: I will be flying to a major European destination and staying at a very nice Sofitel this spring. If I booked that EXACT same trip today for the exact same flights I am on and stayed in the exact same hotel, I would be paying more than $1,500 for the airfare and $258/night for the room. I'm paying $740 per person, with 10,000 bonus miles thrown in and breakfasts every day -- instead of the SAME thing for more than $2,000 per person without the bonus miles. Obviously, there are some people who can afford that -- but I'm not one of them!
Jan 20th, 2002, 09:16 AM
#14
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Your explanation is interesting Jim. I'm wondering though if they make pricing decisions based on historic data, just how valid that data is given the unusual circumstances that affected travel this year? Seems like common sense and simple supply/demand economics should over-ride "yield management" in this case. Too many MBA's and not enough street smarts making the decisions if you ask me.
Jan 20th, 2002, 10:45 AM
#15
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Hey Jim - WAY past "oversimplify"! Buy now or wait for last minute bargains and take chances on overbooking, etc.? How brave can you be and still latch on to a seat on an airline? Talk in lay-mans terms please - (actually we LOVE people like you who have learned to beat the system and aren't afraid to pass it along!). Thanks TONS!!!!!
Jan 20th, 2002, 11:12 AM
#16
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Good points and a good discussion! As for post 9-11, keep in mind that the SUPPLY situation changed. It was possible to pick up award seats (even at a discount for miles traded) and low fares with extra spiffs for a period of time after that. For those who had the courage to book at that time, they were rewarded. The other factor entering into it now is that airlines implemented schedule reductions -- often as much as 20% of their early September offerings. With demand coming back now, a lower number of available seats (supply) more quickly translates into higher prices. (Demand being down isn't enough. If demand is down 10% and supply is down 20% -- well, you get the picture...).
As for knowing when to bite, I don't think there is any substitute for a year or more of watching the demand cycles play through. (Seasons aren't the only factor, but they are an important one that can be anticipated). The stockbroker comparison has a bit of merit, but low and high ranges are much easier to define with rates/fares, IMHO. (You're simply not going to most destinations BELOW a certain fare and there is a number ABOVE which you and a lot of other people will not be in the market.) So knowing what "low" and "high" really are comes from paying attention over a period of time. Finally, you don't have to get the absolute cheapest ticket on the plane to have a good deal and a great value. That is your call.
As for knowing when to bite, I don't think there is any substitute for a year or more of watching the demand cycles play through. (Seasons aren't the only factor, but they are an important one that can be anticipated). The stockbroker comparison has a bit of merit, but low and high ranges are much easier to define with rates/fares, IMHO. (You're simply not going to most destinations BELOW a certain fare and there is a number ABOVE which you and a lot of other people will not be in the market.) So knowing what "low" and "high" really are comes from paying attention over a period of time. Finally, you don't have to get the absolute cheapest ticket on the plane to have a good deal and a great value. That is your call.
