The tangled web of travel, part 2: Hotels

In yesterday's column, I explained how relationships between airlines and travel agencies can affect the range of possibilities and prices you see when you conduct an airfare search. But the issue of "display bias" is even more significant when you're looking for a hotel. That's because certain properties are much more lucrative for the travel sellers than others. Companies like Expedia, Orbitz, and Travelocity receive sizable commissions for hotel chains with which they partner; they get much less for so-called "retail" rooms. So these sites are more likely to show you their preferred properties, hoping to entice you to book your stay there.

While price is paramount for the distributors, it shouldn't be your primary consideration. It's more important that you find the right hotel in the right location. Why isn't price king, you ask? Well, most of the major hotel chains, as well as the leading online agencies, have initiated rate guarantee programs. At Hyatt, for example, if you find a better deal someplace else on the Internet than you do at Hyatt's website, the chain will match the lower rate and give an extra 20 percent discount. So because of the existence of such guarantees, you're likely to see the same rate quoted for a particular property on most of the major sites.

But that's not to say you'll necessarily be able to find that hotel on every site. InterContinental properties, for example, are no longer listed on Expedia or Hotels.com. The chain pulled its inventory from those sites earlier this month. It claimed its rooms were listed as "sold out" when Expedia or Hotels.com had sold their preferred inventory, even if there were actually higher rates available (from which the sites would make less money).

Sometimes, the issue isn't that a site simply won't sell a particular hotel chain; sometimes, the bias is more subtle. When I searched for a hotel room in Chicago on Travelocity, the Michigan Avenue Marriott didn't appear on the first screen of listings, which are labeled "Travelocity Picks." It is possible to find that property if you sort the display results by hotel name. But then you still have to click on a second "search" button in order to find specific rates. That's because those prices are Marriott "retail" rates that make Travelocity less profit from your stay. And by making it harder for you to find those rates, Travelocity is lessening the chance that you'll choose to book there.

You should also be wary when you're using a search engine like Google to begin shopping for your hotel. When I typed "Boston hotels" into Google, the first results I saw at the top of the page were links to Hotels.com and Expedia. Those listings are clearly disclosed as paid advertising, in a light-blue shaded box labeled "Sponsored Links." But your natural tendency when searching is to click on the first result, a practice that could take you to a site with inferior inventory or pricing.

A better strategy is to narrow down the neighborhood you want to stay in by using any number of websites, and then select the hotel that's right for you, based on a combination of price, amenities, and loyalty-program points. And be sure to compare rates across a few sites, just to make sure you can't score with a hotel guarantee. (I once booked a room for $19 - thanks to a pricing error on Expedia - and got a $50 credit because the rate was listed higher someplace else.)

It's all too easy to get lured by a website's "favorite" properties. But playing favorites can be like playing with matches. If you're not careful, it's easy to get burned.

I'll be on vacation until December 6. If you haven't yet had the chance, I hope you'll browse through my previous columns.

The tangled web of travel, part 1: Flights

When you walk into a bookstore, you expect to be able to find all the latest bestsellers. But what if "The Da Vinci Code" were only available at Borders, and Bill Clinton's "My Life" could only be found at Barnes & Noble? That's exactly the situation that's becoming more and more common in the travel industry.

Because suppliers (airlines and hotel chains) rely on third parties (online agencies and travel agents) to sell much of their inventory, customers are at the mercy of the deals struck between those groups. For example, if you book on a particular website, you might pay a higher service fee for a ticket on certain airlines. Or, you might see one hotel chain listed first on a results page, even if its prices are higher. While some degree of "display bias" has existed for decades, rules prohibiting certain types of discrimination in computer reservations systems expired last summer. So before you book a trip, you need to be extra-careful that you're seeing the complete range of possibilities at the lowest prices.

Thomas Petzinger, Jr.'s fascinating history of the airline industry, Hard Landing, describes how American developed the Sabre reservations system used by a vast network of travel agents, and programmed it with "screen science" that would invariably make American flights appear first. Since travel agents booked the first option on their computers more than 50 percent of the time, weighting the display in favor of American flights would increase that airline's bookings. As a result of such practices, the U.S. government began regulating these systems in the early 1980s.

But with the Internet making it easier to compare prices, many of these rules were reversed this year. Now, as Scott McCartney of The Wall Street Journal wrote earlier this month, certain online agencies are preferencing particular airlines. For example, for a trip between Chicago and Minneapolis, CheapTickets.com first displayed a Delta flight that connected in Atlanta, instead of any number of nonstop options. (Because of this bias, Northwest says it won't let CheapTickets.com sell its flights at all.)

There are a few things you can do to avoid the pitfalls of paying too much for an inconvenient trip. First, know which airlines fly your route. (Check out Smarter Living's Flight Schedules.) Then, get a benchmark for what your fare is likely to cost. You could use one of the search engines like SideStep, Mobissimo, or Kayak, or compare fares using several different online agencies. (Only Orbitz promises an "unbiased, comprehensive display" of flight options, but even so, will still add lower surcharges for its preferred airlines.) That way you're mitigating the risk of a potential deal between your airline and the booking site you're searching.

When it comes time to purchase your ticket, I'd recommend buying directly from your airline. You won't pay a service fee, and you'll often get extra frequent flier miles. Plus, you won't have to worry about being directed toward an inconvenient itinerary.

Tomorrow, I'll examine the issue of display bias as it relates to hotels. Profit margins are much higher for hotel rooms than they are for flights. So there's an even greater chance that a particular website is steering you toward its preferred properties. Or, worse, that it simply won't show you the hotel you're looking for.

In short, when you're shopping for travel, be sure to read between the lines. That shouldn't be as hard as solving Dan Brown's murder at the Louvre. But you'll still have to decode the clues to find the right deal for you.

Expect Thanksgiving stuffing, but make gravy

Grandma's creamed onions and Uncle Raymond's drinking problem won't be the only thing frazzling your nerves this week. Turkey-trotters can also expect long airport lines and overcrowded planes during the holiday season. According to industry projections, a record 16.2 million Americans are expected to fly during Thanksgiving weekend. Fortunately, although you may feel "squashed" among the hordes of travelers, full flights mean it's possible for you to "turn up" an unexpected treat. Get bumped and your airline might give you money toward your next trip - or even a free ticket.

Most carriers intentionally over-sell their flights, because they know that some travelers won't show up, particularly those who have purchased refundable tickets. And because the airlines' goal is to fill every seat on the plane with travelers paying the highest possible fares, sometimes there are more passengers than there's room for. The result is that some fliers need to be bumped to a later flight. In most cases, the airline takes volunteers, but occasionally, late-arriving passengers will be involuntarily bumped.

Every carrier publishes its rules for denied boarding compensation in its "contract of carriage." American, for example, says that it will pay passengers a maximum of $200 if it arranges alternate transportation that arrives more than an hour after the originally scheduled landing time. In practice, however, most airlines give vouchers for future travel that can be quite lucrative. On a recent flight from Raleigh/Durham to Chicago, American was soliciting volunteers with a $300 voucher. On international trips, the value you'll get for being bumped can be much greater - $500 or more. And of course, that can easily pay for your next ticket.

It's also possible to take your scheduled flight and still get compensation. On a business trip a few years ago, I had upgraded to first class and was "bumped" back to business class. That wasn't much of a problem for me, but American still gave me $200 for my "inconvenience." Another time, I was bumped from a connecting flight to a nonstop flight, arriving an hour earlier than I was supposed to - and I got another $200.

So if you have some flexibility in your travel plans, particularly when you know your flight might be crowded, it's well worth trying for the bump. If that's your intention, the first thing you should do is show up at your departure gate early, and ask the desk agents if they're taking volunteers. Generally, they'll know whether the flight is over-sold or not. And if it is, you definitely want to be the first person on their list.

You should also be prepared to suggest an alternate itinerary. If there's frequent service on your route, like from Chicago to Boston, you'll probably just be placed on the next flight. (However, you'll be flying standby, so if every plane to your destination is full, you could be waiting around a while.) But perhaps your flight has a connection through Atlanta, and if you come prepared, maybe you can suggest an itinerary through Cincinnati that saves you time.

Keep in mind, too, that the compensation you'll get is negotiable. The airlines aren't required to give you a room or meal money if you volunteer to be bumped from the last flight of the day, but you may able to persuade a friendly agent to help you out. (And if not, spending $50 for a cheap hotel room is a small price to pay for a $300 airline voucher.)

My final piece of advice is to watch the traffic patterns if you fly a particular route frequently. The Department of Transportation publishes records of how many passengers are bumped by airline, and you can use that data to increase your odds. (In the third quarter of 2004, for example, America West and US Airways had the highest bump rates.) You may also be able to anticipate which planes are likely to be over-sold, and book those flights with the specific intention of getting bumped. I'll sometimes schedule the second-to-last trip on a Sunday evening, hoping that I'll get bumped to the last flight, which usually has plenty of seats available.

Maybe you don't have that much flexibility with your Thanksgiving plans this year. But if you get lucky with being bumped, you might just be able to afford a trip to a remote island next Thanksgiving. Far away from Grandma and Uncle Raymond.

Frequent flier Friday: Early holiday gifts from Delta

Why spend money on plane tickets when you can take to the skies for free? Even if you only fly a few times a year, it's easier than you might think to travel at your airline's expense. This week, Delta has come out with a couple of offers that will end up saving me $85 - and will put my frequent flier account over the threshhold for the once-in-a-lifetime trip to South Africa I've been saving for. All I'll have to do is spend about $150.

Let me show you how this works. The first offer came through e-mail, offering a 10,000-mile bonus for flying any trip on Delta by the end of January. (This promotion appears to have been targeted to American Express cardholders, but seems to have been widely distributed.) That's an incredibly generous offer, considering that I could get the bonus just by flying to Cincinnati this weekend for $118, including all taxes and fees. For that trip alone, I'd earn 1,000 base miles, plus the 10,000-mile bonus, plus 1,000 miles for booking online: that is, 12,000 miles (or about halfway to a free domestic ticket) for $118. (When I go to Florida, I'll probably spend about $150, and earn about 13,400 miles.)

Gentle readers who aren't eligible for the 10,000-mile bonus could sign up for a SkyMiles American Express card instead. Delta's now offering a 10,000-mile enrollment bonus, plus the first year without an annual fee. So that same flight to Cincinnati, purchased on your new Amex, would earn you 12,236 miles (2,000 miles for flying that trip, and 236 miles for buying it. Psychological bills for spending the weekend in a red state will be priced separately). Then, take an hour of your day for a free consultation with an American Express Financial Advisor, and you'll get an additional 3,000 miles. (If anyone's done that, I'd love to know whether it was worthwhile.) So now you'll be over 15,000 miles, having flown Delta just once.

The last piece of the puzzle is Delta's new mileage transfer program. This allows you to shift between 5,000-10,000 miles to a friend's account, for $10 per thousand miles plus a $25 fee. That's a very good deal, compared to the cost of buying those miles. So if "Rob" (to make up a name) spends $125, "Brian" could give him 10,000 miles, putting him over the 25,000 miles he needs for a free ticket. And his total expenditure for that second ticket would be $243 - much less than the value of the miles if he uses them wisely.

I won't need to use mileage transfer to get my account over 120,000 - where it needs to be for that trip to Africa in Business Class. But I will surpass the threshhold with 13,000 miles for a flight to Florida, plus 3,000 miles for financial advice from Amex. Since I'll have met my mileage goal, I'll be able to cancel my Delta Amex, saving the $85 annual fee. Instead, I'll be hanging out on the beach, planning where to go on my next free trip. And when it comes time to order drinks, I'll be able to earn American miles with the MasterCard I'll start using for my everyday spending. That'll get me closer to yet another free ticket. And the cycle will continue. (Yes, frequent flier miles are like Prada shoes. Once you start, it's hard to stop.)

But piling up miles in your account isn't enough, of course. They're not worth anything unless you can actually turn them into a free ticket. So the other side of the frequent flier equation is how to maximize the value and the flexibility of those miles, given a limited number of seats available for award travel. With my Delta account for example, I could fly to Africa on South African Airways. And with your 25,000-mile balance - remember, you've just flown Delta once - you could take your next trip on Continental or Northwest. For free. Not a bad holiday gift! Just be sure to send Delta a thank-you note.

I never meta travel search like this!

Shopping for travel is fundamentally different from, say, buying clothing. If you want an L.L. Bean cashmere sweater, you typically have to order by mail from an L.L. Bean catalog, visit an L.L. Bean store, or call L.L. Bean and make a purchase by phone. And generally, you'll pay the same amount (except, perhaps, for tax and shipping). But with travel, the same product - the specific United seat or Sheraton hotel room - can be bought from a dozen or more online retailers. And each of those stores could be offering a slightly different price.

As I mentioned the other day, no single travel website always has the best deals on airfare or hotels. While you're likely used to shopping around a bit, you're also probably loyal to a few favorite sites - places where you got a good deal once and expect to do so again. But if you always book your airfare on Travelocity, or your hotel with Expedia, you could be paying more than you need to for the same flight or the same room.

For those of you who think price is the most important consideration (i.e. those of you, ahem, without a Gulfstream at your disposal), a new breed of travel sites might be able to help. These websites aim at becoming the one and only place to start your trip planning. They are often referred to as "meta-search" sites, because they search other websites for deals.

The patriarch of the meta-search sites is SideStep, which I've used for several years as a valuable travel tool. Another, BookingBuddy (affiliated with SmarterLiving.com, a former employer of mine), allows you to choose which sites you want to search, so you can compare the results one at a time. A third site, worth watching out for in 2005, is called Kayak, led by former executives of the major online agencies and backed by an investment from AOL. And the latest of these meta-search sites, called Mobissimo, just launched officially this week.

I used Mobissimo to search for a flight in January between Chicago and Ft. Lauderdale. (Hey, why not dream a little? It'll be above freezing there.) The lowest price I found was for a seat on ATA, for a little less than $149. Instead of selling me the ticket directly, Mobissimo transferred me to ATA's website. Then, in what seems like a glitch in the system, it told me it couldn't find any availability at that price. (D'oh!) However, Mobissimo's search results also included ATA flights being sold by Travelocity, Amex, Cheap Tickets, and OneTravel. But rather than try a different provider, I went to ATA's website on my own, where I found the fare that Mobissimo couldn't.

Though Mobissimo didn't help me with my hypothetical Florida vacation, I think it could be useful to get a sense of what a particular trip might cost. But keep in mind that it doesn't work with every major provider or agency. So, for instance, if Orbitz has an exclusive deal with an airline, you won't find those fares on Mobissimo. And if you're looking for a flight on American, you'll have to book it through a third party like Travelocity or OneTravel. Plus, for hotels, Mobissimo's list of partners is woefully thin, excluding major chains like Hyatt, Marriott, and Starwood. But it's still worth keeping this site - and others like it - on your radar screen. If nothing else, it'll remind you that your "favorite" travel site doesn't always have the best deals.

Update:

JetBlue has "clarified" the Bloomberg report that quoted CEO David Neeleman saying the airline would be interested in purchasing ATA's gates at Chicago's Midway Airport. Apparently, JetBlue won't make an offer now, but "may be in Chicago someday." With an influx of EMBRAER 190 regional jets on the way beginning in 2005, my guess is that JetBlue will spend more of its energy next year expanding its service to mid-size cities. But don't rule out JetBlue one day battling American and United for market share at O'Hare, providing low-fare flights between Chicago and New York.

Fly easy, fly AirTran?

Residents of the Windy City know that it's typically a lot easier to fly from Midway than O'Hare. The security lines are generally much shorter, parking is less expensive, and, most importantly, you're much more likely to depart on time. In fact, flight delays at O'Hare have become so problematic that the FAA has mandated that both American and United cut their schedules significantly there.

If that weren't enough reason to avoid the city's main airport, flying to Midway lets you take advantage of low-fare airlines that don't serve O'Hare, most notably Southwest and ATA. But how much longer will ATA be around? The airline filed for Chapter 11 bankruptcy in October, and announced that it would be selling its flying slots at Midway to AirTran, the Atlanta-based upstart. Now comes word of a definitive agreement between the two carriers. AirTran will assume both ATA's gates at Midway and valuable slots in New York and Washington, D.C., and may also operate some of ATA's planes until June 2005.

However, with Midway being such an important gateway to Chicago (and as we learned on The Amazing Race last night, with Chicago being "the gateway to the Midwest,") don't expect other airlines to give up on increasing their presence at Midway. Southwest has said that it expects to add service from Chicago in 2005, America West has expressed interest in the slots, and JetBlue, according to a Bloomberg report, is also interested in using the Midway gates to begin service between Chicago and New York. So it may be up to the bankruptcy court to decide which carrier ultimately gets control.

What does this mean for you, the budget-minded traveler? The more competition there is in a given city, particularly if the players include low-fare airlines, the more likely that you'll be able to find a good deal.

For example, should you have a hankerin' for Clyde Cooper's barbecue in Raleigh, the cheapest fare from Chicago right now is $158 round-trip. And the reason that fare is so low is because it's part of Southwest's winter sale - which all the majors have matched, both at Midway and O'Hare. (Whether you should choose Southwest or another airline, given the same ticket price, is a topic for another day.)

Without Southwest's sale, it's likely that a ticket to Raleigh would be much more expensive. And you might also expect to pay more if Southwest should one day become the dominant low-fare airline at Midway. (Frontier is the only significant low-fare player in Denver, for example. And you rarely see the kind of deals there that you will to a city with more competition.)

Whether you should root for AirTran, America West, or JetBlue to win ATA's gates depends on where you'd like to fly. Business travelers might hope that JetBlue would begin high-frequency, low-fare service on the lucrative Chicago-New York route. And leisure travelers could cheer on America West, with its hubs in Las Vegas and Phoenix.

But I'm hoping that AirTran will ultimately be able to carry out the agreement that was announced this week. With its substantial presence in the East Coast and Southeast, plus the new slots in New York and Washington that it would acquire from ATA, I think AirTran would be the most successful at keeping competition up and prices down. And who knows - with a second hub in Chicago, maybe a flight to Boston or Washington wouldn't require a layover in Atlanta.

The carrot and the stick

If you're familiar with purchasing travel online, you've certainly heard the time-worn advice to "shop around." In the ultra-competitive marketplace for airfares and hotels, that's even truer today than ever. No single website - despite the advertising that you'll hear on radio or TV - will always have all the best deals.

So it's up to you to compare prices across multiple sites - online agencies like Travelocity, providers like JetBlue, and search engines like SideStep. But what makes doing so challenging is that what you see isn't always what you get. Northwest may tout a $49 airfare on its website, but that price is for one-way travel. And the quoted fare likely won't include additional taxes and fees that can raise the actual cost of that ticket - say, from Detroit to Chicago, from $49 to a little less than $120. (Never mind that the quoted fare is probably for the days that you're least likely to want to fly.)

How you book will also affect the price of your ticket. A couple of years ago, several airlines were promoting an "online booking discount" to entice you to buy on their websites. You could think of it as a carrot (or, if you prefer dogs to horses, a rawhide bone). But a couple of months ago, most of the major airlines began to turn the online discount concept on its head. Now, if you try to book over the phone or even, egads, at an airport ticket counter, you'll be cracked with a stick and forced to pay an extra fee of $5 or $10.

That additional charge is supposed to be included in the advertised fare, according to a new ruling by the Department of Transportation. But you'll have to wait and see how the airlines implement that rule. That's because carriers don't always follow the strict guidelines that the DOT has issued about promoting airfares online, risking fines in the process.

For example, all carrier-imposed fuel and security surcharges are always supposed to be included in the advertised fare. But I've seen numerous cases where "matching" fares on multiple airlines have been promoted at different levels, even though - and here's the important part - the total price you pay will be the same.

(For example, British Airways and Virgin used to always promote fares to London that seemed to be $16 different, with one airline (correctly) considering that $16 security surcharge part of the fare, and the other carrier listing it as an additional tax. The airlines' goal, of course, is to make the price seem as low as possible so you'll be enticed to search for a ticket. With their current sales, both airlines are promoting their fares identically, and correctly. Nevertheless, a "$120" fare from New York to London is actually $344, round-trip and including taxes and fees.)

So it's imperative not only that you "shop around," but that you calculate your total price before you decide where to book. Forget about the fare you see advertised, and be especially wary of any price that starts with the word "from" (as in, "from $49"). If you're serious about finding the best deal, be sure to compare apples to apples. How much will you have to pay on your credit card for flying from A to B? That's the only question worth answering when you shop for an airline ticket.