A bad economy adds up to good vacation deals

Talk about fireworks. In a burst of post-Fourth of July sales, Southwest Airlines turned the clock back with 1990s fares, a major hotel group extended a free-nights deal and luxury cruise lines pitched high prices overboard.

With many bargains good through fall and into next year, now is the time to take a break from the beach and book a trip ahead -- far ahead. You may save hundreds.

The latest price-slashing began just days after the U.S. government said unemployment edged up in June, adding to worries that the recession could extend into 2010 and beyond.

Nabbing a deal takes quick action and flexibility because many sales, such as Southwest's, which offered coast-to-coast round trips for $180 plus taxes, may last only a day or two and be limited to certain dates and flights.

"They're designed to shake some money loose" from wary consumers, said Mike Boyd, president of Boyd Group International, aviation analysts in Evergreen, Colo.

Here's what's happening and how to take advantage of it:

Airlines: By June, they finally had trimmed flight schedules enough to keep planes fairly full, despite selling fewer tickets.

"Now demand is starting to fall like a piano out of the 33rd floor," Boyd said. "Demand is falling faster than they're pulling seats out." Hence the sales.

Watch out for November though, Boyd added, when he expects big capacity cuts, leaving fewer discounted seats.

Book now or later? It's a tough call, even for industry insiders.

"We've never seen a year like this one," said Tom Parsons, chief executive of . "The airlines themselves are confused about what they have to do with price points."

Boyd's advice: "Buy now." You may even land a bargain for ski season, he added.

But Parsons said you might benefit by waiting to book winter trips until fall, when he expects to see more sales, unless you're flying over the holidays.

If you see a decent fare for Christmas or Thanksgiving, grab it now, he said, because high-demand seats still get snatched up.

Hotels: There's plenty of room at the inn.

Nationally, average hotel occupancy in 2009 is projected to be 55.5%, the lowest in more than two decades, and the average room rate is down to 2005 levels, said Robert Mandelbaum, Atlanta-based director of research information services for industry specialists PKF Consulting.

"It's an all-out rate war in some markets," he said.

But not everywhere. You may still pay top dollar for, say, a beach resort at Christmas because some owners would rather risk a few empty rooms than cut prices on peak dates.

To find the best rate, "check all distribution channels," Mandelbaum said. Call the hotel; check its website; run searches on Expedia, Travelocity and other big online sellers; and consult a travel agent.

Look for free stays too. Through Aug. 15, guests who spend two nights at InterContinental, Holiday Inn, Crowne Plaza, Hotel Indigo and other chains run by InterContinental Hotels Group can earn free nights by registering at

Cruise lines: Demand is down for many destinations, notably Alaska, where "we're seeing a lot of last-minute deals," said Melissa Baldwin Paloti, managing editor of , a consumer information site.

But you don't need to sail on short notice to save. High-end lines are already putting late 2009 and 2010 voyages on sale, bringing them within reach of some middle-class travelers.

"If you've ever considered luxury, this is the time to make the jump," Paloti said.

In a weeklong sale that ends Monday, the Yachts of Seabourn, a small-ship line known for its open bar and fine dining, dropped fares for several cruises below $300 per person per day, double occupancy.

Another luxury line, Silversea Cruises, has offered early-booking incentives of 60% off for 2010 plus, for certain cruises, free round-trip airfare from the U.S. to Europe, Africa and other embarkation points.