A Cheaper Vacation on the Horizon

May 28, 2008 — -- Here's a thought: The total cost of travel could soon be coming down, and you can help make that happen.

Notice I said, cost of travel — not airfare. We are going to look at the big picture, and I think you'll be pleasantly surprised.

What's required of you? Just sit back and watch the economy do its supply-and-demand thing, while learning to be as flexible as an Olympic gymnast. Actually, it won't even be that hard, and you can still win the gold medal for travel smarts.

First of all, let's look at the cost of airfare over the years: Back in the fourth quarter of 1997, the average domestic airfare cost $392. In the fourth quarter of 2007, that cost was $331. So things are better, or at least they were until the airfare increases started going crazy this year (the Bureau of Transportation Statistics does not yet have figures for 2008).

But let's look at the '97 figure again: In today's dollars, that $392 is the equivalent of $508 — so, you know you're at least somewhat ahead of the game on airfare.

And here's something else to consider: When it comes to vacations, it's not all about the airfare.

When you factor in the cost of hotels (and never mind dining, shopping, tours, etc.), airfare starts to look like a mere trifle. For instance, say you're planning to visit New York City this summer. I hope you've checked out hotel prices there, so your head doesn't explode.

Yes, it's steep: A middle-of-the-road hotel chain has rooms in midtown Manhattan during weekdays in June for $499 a night. And you can pay much, much more elsewhere. In other words, the cost of a room for a single night can be more expensive than the airfare.

Now, maybe you can't lower the room prices, but the forces of economics can. And likely, will. You see, demand for flights is already softening as the price of oil continues to careen out of sight; and don't think the airlines didn't notice how record numbers of drivers sat home this Memorial Day weekend.

Meanwhile, as the airlines keep raising prices and nickel-and-dime-ing us with inanities like a fee for a first checked bag, watch for more fliers to stay home.

And then watch hotel room rates drop, too. Best illustration I can think of is what happened after 9/11: No one wanted to fly, so no one stayed in hotels. And room rates sank like a stone. And yes, it is happening again right now: Just look at Hawaii. Since the demise of Aloha Airlines and ATA, hotel rates in Honolulu and elsewhere have dropped dramatically (and so have prices for shopping and touring), all in an effort to spur more traffic.

Another way to bring the cost of travel down? Ground transportation. If you're visiting family, see if you can borrow someone's car for the week. Or use mass transit where possible. You don't need a cab or a rental car if you're heading to midtown Manhattan; use the reasonably priced buses that take you right into the city. And by eschewing the rental car, you've just saved yourself another $25 a day in hotel parking charges.

OK, at this point, airlines are still raising prices, but we believe our hotel rates will come down, so we may soon achieve something akin to equilibrium. Can we do better?

That depends on you. You've heard me say again and again, you must be flexible to get the best air travel deals, and that, my friends, is truer than ever now. The great deals flit across your computer screen only to disappear in seconds. But how to be flexible? The key is preplanning.

Unless you are self-employed or retired, preplanning means talking to your supervisor well ahead of vacation time, and asking if you can give little or no notice when it comes to the traditional two weeks off. You have to work with your employers to sketch out what dates, months or times of year can be immediately available to you. Position yourself so you can go when the going is good.

And here are some examples of why preplanning pays off: In an unusual move this past weekend, Continental Airlines (quickly followed by United Airlines) dropped prices to Hawaii. Continental, for example, had a Pittsburgh to Honolulu flight for an incredible $228 roundtrip (all taxes and surcharges included) and United featured a Newark to Honolulu steal, at just $245 roundtrip. A few days later, these airfares are likely to be gone.

Can't find great deals? Then look for "mega mistakes." United recently blew it big time with a "clerical error" that deducted $130 from the price of many of its tickets. Stuff happens, and you have to be ready to pounce.

So when you're planning a trip, don't let airline ticket prices rule your vacation economics; consider all the costs of the trip and the things you can do to take advantage of everything within your power. Don't give up and stay home — use technology and change your purchasing habits, and you may wonder why you got so worked up over airfare in the first place.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations, including ABC News, The New York Times, The Wall Street Journal, Reuters, The Associated Press and Bloomberg. His Web site FareCompare.com offers consumers free, new-generation software combined with expert insider tips to find the best airline ticket deal.