TRIPinfo.com - Internet Travel Monitor Newsletter Article

NEW YORK, NY – Skyrocketing prices on everything from gas to food will force many families to look no further than their own backyard when it comes to planning their vacation this summer.

With flight cancellations, exorbitant fuel costs and bankruptcies crippling the airline industry, airfare is getting even pricier and planes more overcrowded. While on the road, gas prices have hit a national average of $3.37 — and they're only expected to go higher. By summer, drivers could pay as much as $3.60 a gallon, with many regions topping $4, according to the Energy Information Administration's Short-Term Energy and Summer Fuels Outlook.

Oddly enough, the pain at the pump may help some summer travelers actually save on their getaways. From big-name hotels to tiny bed & breakfasts, the lodging industry has started rolling out incentives that help guests offset some of the costs of hitting the road. While some properties are offering prepaid gas cards (ranging from $10 to $50), others are extending cash bonuses or reduced room rates to guests who drive a hybrid vehicle, or take a train or bus to their destination.

Subsidizing the price of gas to lure in cost-conscious guests is nothing new for the lodging industry. It's long been used as a marketing tactic to entice travelers to extend the distance they're willing to travel and hopefully prod them into considering pricier room rates. However, in the past these promotions were few and far between until prices at the pump started jumping, says Bjorn Hanson, a hospitality consultant for PricewaterhouseCoopers. Now, hundreds of properties across the country have jumped on board.

"Hotel managers uniformly have incentive to put heads in beds," says Mark Eble, regional vice president for PKF Hospitality Research, an Indianapolis-based industry consulting group. "Hotel rooms are the ultimate perishable commodity — they make eggs look sturdy. If you don't sell the rooms tonight, they're gone forever." Hoteliers' biggest concern is that, should gas hit a nationwide average of $3.50, guests will start cancelling reservation en masse. (A price of $3.50 a gallon is considered the psychological tipping point for consumers. At this price, most drivers will decide to drive less rather than cut back on other expenses, says Troy Green, a spokesman for AAA.)

Hanson and Eble project that, as gas prices climb higher, even more travel incentives will be rolled out.

For consumers who are tempted by gas promotions, a smart strategy is to shop around and consider just how much that $50 prepaid gas card will take off of the final bill. Fees like parking, for example, could potentially offset the discount. "When you get right down to it, a $50 gas card is $50," points out Anne Banas, executive editor for SmarterTravel.com, a travel advice site. "There might be another hotel nearby that's cheaper to begin with, which would give you more to spend on gas and other parts of your vacation." It's also important to call the property directly to confirm details of the offer, including which brand of stations its prepaid card is good at, and whether they require proof of mileage or the amount of gas used during your trip.

Here are a few current deals that can help make your summer road trip more affordable:

Copyright 2008 SmartMoney. All rights reserved. From http://www.smartmoney.com. By Kelli B. Grant.
To view the Internet Travel Monitor Archive, click http://www.tripinfo.com/ITM/index.html.