Get a Break on Rising Hotel Prices this Fall

Get a break on rising hotel prices this fall – courtesy of airline cutbacks and high gasoline prices. Airlines’ service cuts and rising fuel costs are dampening travel demand to many destinations. Some hotels are offering deep discounts to temper rate increases and attract vacationers. This is a reversal of the trend in recent years, which saw rapidly increasing and record room rates.

U.S. hotel room rates are still forecasted to rise modestly this year. That is partly because of continued strong demand in urban markets and the weak U.S. dollar, which has been attracting more travelers from overseas. Average room rates are expected to rise about 2 percent this year. But this is in stark contrast with what €™s been going on in resort areas. Resort properties across the U.S. last month saw a half-percentage point decrease in daily rates from a year earlier, the first decline since 2003. Occupancy rates are lower also.

Bargain hunters traveling to popular vacation spots in Florida, Arizona or Hawaii should have good luck finding deals over the next few months, since leisure-travel destinations are expected to see flight-capacity cuts, and airfare increases. Some hotels are cutting rates and throwing in extras (like a fourth night, or meals, free). Other are deferring their typical annual rate increases for the first time in years.

In places like San Diego, an influx of new hotels is partly to blame for falling room rates, as are rising gas prices and weak housing markets in nearby cities like Phoenix and Las Vegas.

In the coming months, major airlines will be announcing a number of flight cuts, leaving some hotels and vacation destination’s worrying. In Orlando, the local visitors bureau has formed a task force called Air Team Orlando that will meet with the airlines, partly to lobby against declines.

The travel slump has caused demand for flights to ease. The Air Transport Association of America predicts a 6 percent decline in travel on U.S. airlines this Labor Day Weekend, the first drop since 2002.

So, if you €™re looking for travel deals and opportunities, keep an eye on resort-type properties. These will likely be the first to drop their rates in response to the economy and travel trend changes.