March 4, 2009 / 4:02 PM / 10 years ago

Travel bargains seen in Vegas, Mexico, London

NEW YORK (Reuters) - Cash-strapped travelers should be able to find bargains at destinations that normally cater to business travelers and by taking advantage of foreign exchange rates, online travel agents advise.

Tourists relax on the beach at the resort town of Cancun in Mexico's state of Quintana Roo, as Hurricane Dean approaches, August 19, 2007. REUTERS/Henry Romero

Their top tips for U.S. travelers are Las Vegas, Mexico and London.

The chief executives of the three publicly traded U.S. online travel agencies — PCLN.O, Expedia Inc (EXPE.O) and Orbitz Worldwide Inc OWW.N — see sharp drop in business travel due to the recession, freeing up hotel rooms in places like Las Vegas that depend on conferences.

“There are some great deals out there and you don’t have to spend as much as you did last year,” Expedia CEO Dara Khosrowshahi told the Reuters Travel and Leisure Summit in New York on Tuesday.

He said hotels that rely on business travel were aggressively targeting the leisure travel segment to fill the gap. “That’s a real silver lining for the consumer. The cost of travel has gone down pretty significantly year-on-year.”

Priceline CEO Jeffery Boyd said customers were finding they could get more for their money than ever before — for example a three- or four-star hotel might now be in the same price range as a two-star hotel previously had been.

“In some of the destinations that typically have a lot of business travelers, and in some of the hotels that have a very high reliance on conferences and shows and business travelers, Priceline has received some very, very good deals,” he said.

Las Vegas has been the hardest hit by the collapse in group bookings, but other business destinations such as New York are also becoming more affordable.


Priceline, which allows customers to bid for hotel rooms and flights by naming their own price, is the only one of the three agencies that saw growth in bookings in the fourth quarter — a trend Boyd attributed to its focus on value.

All three companies are increasingly focused on generating travel demand through vacation packages that can cut the total price of a trip, and allow hotels and airlines to discreetly offload extra capacity without cutting their published rates.

Orbitz CEO Barney Harford said some of the best value packages were in Mexico, where the weak peso helps Americans feel richer, and the Caribbean, as well as Las Vegas and Orlando, Florida.

The dollar’s rise against the British pound also makes London a bargain after long being prohibitively expensive.

“Currency fluctuations make different destinations more or less affordable,” said Harford. “That, combined with the savings that the suppliers are putting out there, really has meant that some of those markets really become quite attractive.”

Khosrowshahi said more people were waiting until the last minute to book their travel, and finding great deals.

But he advised consumers wishing to travel at busy times such as public holidays to book early since the deep discounts meant hotels and flights were being snapped up in advance even in the current economic environment.

Reporting by Claudia Parsons, editing by Michelle Nichols

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