When Should I Book?

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More often than not, getting somewhere and staying there is the most expensive part of traveling. With so many conflicting instructions for booking hotels and flights, I weighed the evidence and my own experiences to determine how to save the most money on transportation and accommodations.

Flights

There’s an old legend among travelers that you’ll get the best fare seven weeks out from your trip. After monitoring more than 4 million flights, CheapAir.com has confirmed that there’s some truth to that advice. The company determined that passengers get the best deals on air travel between 29 and 104 days prior to their trips. Customers found the ticket prices, on average, 54 days before their departure (or seven and a half weeks).

CheapAir.com’s study had some other interesting nuggets:

For most domestic trips, we found a similar pattern. The worst time to book your trip was the last minute. No big shocker there. The day before was the single worst day, two days before was the second worst, etc. etc. all the way up to 13 days in advance. Our data completely debunks the myth that if you wait until the last minute, there will be big price reductions to take advantage of, as airlines dump empty seats. That simply doesn’t happen, and buying a flight with less than two weeks advance purchase is the last strategy we would recommend.

Besides not buying at least 14 days in advance, however, the next biggest mistake was usually to buy too early. On most airlines, flights open up for sale 331 days in advance. That is the earliest you can book a flight – about 11 months in advance. We found that for about four months from that time, domestic fares tended to stay pretty steady, and pretty high. That makes sense. Airlines just don’t get aggressive about offering fare sales for flights that far in advance. (Note, we are specifically referring to fares within the U.S. here. The pattern for international flights is different and we’ll discuss in a follow up post.)

According to the data, sometime around 225 days out (7 1/2 months), on average, fares started to drop and by 104 days out (3 1/2 months) they had fallen to within $10 of their low point. From there they continued to drop, slowly but steadily, until reaching a low 54 days before departure. After 54 days, fares started to climb again, remaining within $10 of that low until 29 days out. Then, the increase began to accelerate and once you were within 14 days the fares really shot up dramatically.

There are also travelers who swear that it matters when in the week you book. Yes, it’s true, that airlines post their best deals overnight on Mondays and the lowest prices are often found on Tuesdays and Wednesdays. Fares tend to rise the further into the week you wait.

But these rules only work for domestic travel within the U.S. Flying internationally has its own set of standards. The Wall Street Journal explains:

International sales are seasonal, not weekly, fare experts say, and often route-by-route rather than global. A major sale for fall travel often kicks in about the end of July or early August. The cheapest prices of the year are for travel in February, fare experts say, and those deals usually show up in November and early December.

For peak-season travel, fares start fairly high and then come down. Airlines start more-actively managing pricing on flights about three-to-four months before departure. That’s also when shoppers start getting more active.

For every route, airlines load a dozen or more different fares into reservation systems and then pick which one applies to a specific flight at a specific time, usually based on how well that flight is selling and what the airline expects in future demand for seats, including demand from business travelers who book later.

Harrell Associates compared 100 different routes to Europe and found the highest prices for peak-season fares were in October, on average, so buying that early for summer would have been a mistake. The cheapest time to buy that peak-period fare: April.

Hotels

Now, with hotels, there are two facts that are equally true:

  • The further out you book from your arrival, the more money you will save. Hotels want to sell as many rooms as possible, and without a complete understanding of their demand in the distant future, they want to entice a customer to book now to guarantee that room will be filled. To them, losing a few bucks is worth the risk of not filling the room all-together. Many of these great deals are non-refundable, because the hotels want to avoid losing your booking at the last minute if you find a better deal elsewhere. Booking refundable rooms in advance may still be cheaper than waiting, but it’s nearly always more expensive than a non-refundable room.
  • Alternatively, waiting until just before your arrival day can also result in steep price cuts. Since hoteliers want to minimize the number of vacancies (read: maximize profit), they often offer rooms for half off or more from the list price of the room just days before. Most of these deals are on websites like Priceline, where consumers merely select their desired neighborhood(s) and star level, then make a bid for the price they’d like to pay for a room per night. These deals are also non-refundable, so it means you’re stuck with whichever hotel you’re assigned by the third party booking service. Because hotels would not want other potential customers to simply wait until prices were at their lowest, a customer cannot see where he’s assigned until after he’s booked.

When I take a last minute trip to New York from Washington, the second option works in my favor. I can stay at a four-star hotel in a great neighborhood for $140 a night if I book the day before or en route on the Acela. When booking my travels to Europe later this year, it makes better sense for me to reserve a room in advance. This ensures that I’m staying where I want, guarantees my arrangements are properly confirmed and allows me to take advantage of early booking deals.

Unfortunately, what seems to be the most reasonable amount of time from your reservation to book is also going to be the most expensive. I’ve never had luck booking accommodations between 2 weeks and 3 months before travel. My best deals have always occurred by booking far in advance or waiting until just before my trip.

So, if you don’t want to book a year out, but you don’t want to wait until the last minute either, how do you know when’s the right time? There’s a great new website, The Suitest, that will do the work for you. Currently, it’s only available for accommodations in the U.S., but it’s a great tool for determining whether or not the current list price of a room at each hotel is a good deal, based on an algorithm that considers availability and price fluctuation. It gives each hotel deal a grade, so you know if you’re seeing the best possible or fairest offer for the room you’re considering. If it’s rated a C or below, you would want to wait until the price dropped or consider other accommodations. Their “time machine” tool next to each listing also tells you the likelihood of getting a better price or the hotel selling out of rooms based on a time frame you select (7 days from now, 5 weeks from now and so on).

In short, the key to saving money on accommodations and transportation is to do plenty of research and to monitor rates as often as possible. Being a good traveler starts before ever leaving home.

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