Why travel price protection doesn't fly
Travelers can save in the rare instances prices drop after booking -- but maybe not without a fight.
This post comes from Kelli B. Grant at partner site SmartMoney.
At face value, the pitch is an attractive one. Book airfare, a hotel stay or a vacation package, and -- if the price drops -- get a refund for the difference.
Most big travel booking sites now offer such price-protection policies -- CheapAir.com is the latest, launching a program earlier this month offering up to $100 back. MasterCard became the first major credit card brand to offer price adjustments on airfare last summer. And as of late January, the U.S. Department of Transportation requires airlines to allow penalty-free changes and cancellations within 24 hours of booking. "It's basically a 24-hour lemon law," says Rick Seaney, the chief executive of fare-tracking site FareCompare.com.
The problem is, prices aren't likely to fall in the current economic environment, experts say. Smith Travel Research expects U.S. hotel prices to rise about 5% this year, to an average $107 per night, and rising oil prices have already prompted domestic carriers to push through three $10 fare hikes this year. "The likelihood of a price drop happening is fairly low," says Seaney. (Post continues below.)
Shoppers find it isn't always easy to get sites to make good on their promises, either. Airlines charge change fees of up to $150 to process price drops discovered after that 24-hour window, and policies often include restrictions on which new, lower prices are considered.
Traveler Kaylen Silverberg, for instance, received just half the $284 price decrease he spotted after booking on Hotels.com, due to what his lawyer calls an "arbitrary and undisclosed limit" in the site's policy. "Our investigation into this has led us to conclude that he's not the only one this has happened to," says Gary Eisenstat, a partner at Dallas law firm Figari & Davenport, who is pursuing a class-action lawsuit. Hotels.com declined to comment.
Despite the hassles, best-price guarantees are still worth paying attention to after you book, says Anne Banas, executive editor for SmarterTravel.com. "It's free money," she says. And prices do, on occasion, go down. CheapAir.com chief executive Jeff Klee says the refunds claimed thus far average $52. Here's how to take advantage:
Book smart. Travelers' best shot at getting a great price is still finding one at the time they book, says Seaney. Generally, that means booking at least three weeks prior to departure, comparing prices on a few travel sites and individual airline sites, and pulling the trigger on a Tuesday -- which is when prices are cheapest. If several sites offer the same rate, then it's worth looking at which ones include a best-price guarantee.
Watch prices immediately. Many travel price-adjustment policies -- including those from Expedia, Hotwire, and Priceline -- cover just the first 24 to 48 hours after booking. The same holds true for the new Department of Transportation penalty-free cancellation regulations, which only cover the first 24 hours after purchase. Make sure to do at least one more search before that clock runs out.
Set up alerts. For sites and airlines that offer price adjustments until departure, travelers can set up fare alerts on sites like Airfarewatchdog.com, Bing Travel and FareCompare.com. That way, one can be notified of a lower price without conducting daily searches, says Banas.
Peruse the fine print. There's usually a lot of it to follow when claiming an adjustment, Seaney warns. The new, lower price often has to be available on the same site the traveler first booked. (Orbitz requires that another traveler book the trip at that lower price to trigger a refund.) And it absolutely has to be the same trip, down to the travel dates and ticket class. Sites may also require screenshots of the new deal for proof, or nix any offers it can't independently confirm -- which knocks out coupon codes and deals on members-only sites.
More on SmartMoney and MSN Money:
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Saving just a single month of expenses may take longer than you think. See how your savings rate affects how quickly you can build a solid emergency fund.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'