Last-Minute Trips Are Taking Off

Feb. 25, 2003 -- When Paula and John Conway know they have free time coming up, they surf travel Web sites to look for last-minute bargains on trips to anywhere from Dallas to Istanbul.

"Literally we'll get to Monday of a given week and we will just decide that we want to go away the coming weekend," says Paula Conway. "So I go online to the various search engines and look for deals."

The Westport, Conn., couple takes as many as a dozen trips a year — often with only a few days notice. In the process, they and others like them are changing a travel industry more accustomed to advance bookers than to last-minute ramblers.

Amid economic uncertainty and the threat of war with Iraq, last-minute travel has become an increasingly popular option for many consumers looking to save money and leery of booking their vacations too far ahead of time.

And a travel industry still suffering from the economic downturn has been only too happy to oblige. Many airlines and hotels are offering deep discounts to try to sell any available flights or rooms at the last minute.

"It used to be that if you were traveling six from days from now you either paid through the nose or you didn't go," says Jared Blank, a senior analyst at New York-based business and technology research firm Jupiter Research. "Now there's a feeling from consumers [that] if I wait for a while, it's not the end of the world."

A Growing Trend

Around 64 percent of travelers in the year leading up to November booked at least one trip at the last minute, with about 34 percent booking within three to seven days of the trip and 41 percent planning within eight to 14 days before, according to a recent survey from the Washington, D.C.-based trade group Travel Industry Association of America.

The beneficiaries of this trend have been the many Internet travel Web sites that allow flexible travelers to book on short notice. A number of specialized sites — like Site59.com, LastMinuteTravel.com and 11thHourVacations.com, some of which allow travelers to book up to just hours ahead of time — have sprung up in recent years. Sites like Expedia.com, Orbitz.com and Travelocity.com also offer last-minute deals.

Site59.com, named for the 59th minute of the hour, was purchased by Travelocity.com last March and has seen rapid growth in demand. In 2002, sales volume of last-minute deals grew around 250 percent from the previous year, and the company expects 2003 to see growth of around 80 percent or more, says Travelocity Chief Executive Officer Sam Gilliland.

Along with the deals offered on its Web page, Site59.com also provides last-minute offers for Orbitz.com, CheapTickets.com and Travelocity's Web site.

"It's turning into quite a big business for us," says Gilliland.

Atlanta-based LastMinuteTravel.com is also posting positive growth. The site saw a revenue increase of 250 percent in January compared to the same month last year.

"I think it's just change of lifestyle," says Bob Wendling, LastMinuteTravel.com's chief operating officer. "You have so many two-parent households that are working and there are so many things going on in people's lives, that the era of taking the two-week vacation to the beach, going the same weekend every year, is gone."

Bargain Hunters Troll for Cheap Tickets

People's hectic lives may be one of the forces behind the trend, but some analysts say it's simply a matter of supply that's fueling the demand. Airlines and hotels need to fill seats amid a travel downturn, and the Internet provides a quick and efficient opportunity for travel providers to get their deals to the customers.

"The booking pattern has been affected not by customers' lack of willingness to plan, but based on the prices that are available," says Tom Underwood, equity analyst at Baltimore-based investment firm Legg Mason.

Indeed, many of these sites can offer substantial savings for travelers ready to go at a few days' notice. On Feb. 14, a four-night vacation to Freeport in the Bahamas leaving the following Friday cost $1,151.60 for two people on Site59.com, including flight and stay at the Holiday Inn Sunspree Hotel — a savings of $318.68 when compared to booking the flight and the hotel separately.

Intrepid travelers can also find last-minute bargains on airline and hotel Web sites as well. American Airlines has been offering NetSAAver weekend fares on Tuesday through Thursday of most weeks for travel during the first and second weekends following the purchase period.

A recent sampling showed fare savings of more than 30 percent for routes like Boston to San Diego and San Francisco to Honolulu (these flights did require a seven-day advance purchase). American Airlines says it has seen a significant increase in traffic for weekend fares, but would not provide specific figures.

The one drawback for the truly spontaneous is availability. A few of the package deals offered on some sites were not available for at least three weeks from the booking date.

For example, a recent attempt to book a last-minute trip to Vail, Colo., on LastMinuteTravel.com showed that the package wasn't available on many dates, but Wendling says the company will be working to improve the availability of its packages over the next year.

Travel Prices May Never Be the Same

While all of this last-minute discounting might be good for consumers, some analysts say in the long term, this trend could hurt the travel industry because hotels and airlines may have a hard time getting travelers to pay full price once the economy does turn around.

"There's almost like there's an over-discounting because guests are waiting so long," says Bjorn Hanson, PricewaterhouseCoopers' hospitality industry analyst.

For example, Hanson says that after comparing hotel prices on numerous Web sites, many consumers end up calling the hotels themselves and asking the hotel if they can offer them an even better deal. Hanson estimates that hotels will give a lower rate about half the time.

"The Internet has been the best thing and the worst thing for the travel industry," agrees LastMinuteTravel.com's Wendling. "It's turned the consumer into somewhat of a vigilante because he's out there comparing prices and he's looking for the best price."

As for a potential war with Iraq, many travel industry insiders say they're not concerned that an actual conflict will affect last-minute travel greatly, except travelers might be more reluctant to travel abroad. Some even say that with uncertainty over a war behind, some travelers might even travel more, barring any unforeseen attacks within the United States.

But despite the uncertainty, die-hard travelers like Paula Conway say they will still continue to travel — and troll for bargains.

"I'm leaving for Australia at the beginning of March, and I'm going to go," she says.