Hotels, Airlines Meet Decline in Business by Cutting Prices

Hotels, airlines and cruise ships are quietly offering steep discounts in the wake of last week’s terrorist attacks in an attempt to lure back skittish travelers.

Hotels have been most aggressive, slashing room rates by 50% in popular tourist destinations such as San Diego, Hawaii and Las Vegas. Though airline and cruise line discounts are less prevalent, some cruise lines are offering free air fare. And at least one airline is selling a round-trip fare between Los Angeles and Las Vegas for less than the price to fill the gas tank of a large sport-utility vehicle.

Some industry veterans say deep price cutting is a futile marketing ploy at a time when many travelers’ biggest concern is safety, not penny-pinching. Figuring out how to advertise the bargains is proving tricky as well. Leisure travel, in particular, is inextricably linked with fun and celebration--hardly in keeping with the mood of the nation. Some operators have temporarily tabled ad campaigns, concerned about wasting money and appearing insensitive at the same time.

Still, for people looking for a quick getaway from all the stress and sorrow, bargains abound.

“The whole industry is on sale,” said Ron Archer, head of Montrose-based Archer Travel Group. “If people are psychologically prepared to travel, there has never been a better time in terms of deals.”

Though travel suppliers of all stripes are cutting prices in the wake of the Sept. 11 tragedy, hoteliers undoubtedly have been the quickest and most aggressive. In contrast to the airlines, whose first priorities have been to slash operating expenses and lobby for a federal bailout, hoteliers have homed in on pricing as a way to get more heads in beds.

In Las Vegas, where nearly half the city’s 36 million annual visitors arrive by air and hotel-casinos adjust rates frequently to keep gaming areas full, hotels have been quicker to drop prices than many in other cities. Room rates at the six Las Vegas resort hotels operated by MGM Mirage, for example, have been cut 50% or more from what they would normally fetch this weekend, company spokesman Alan Feldman said Thursday. MGM Mirage is Las Vegas’ biggest operator, with 18,000 rooms on the Strip and downtown.

Rooms at the Bellagio, normally the priciest bed in town, can now be had for $199 a night even on weekends. At the Mirage, rates have fallen to $99; Treasure Island is $89.

“It’s safe to say that, throughout our company, we’re seeing rates at least half what they’d normally be,” Feldman said. “Generally, they’re at their all-time low.”

The story is much the same with Hawaii, which is almost totally dependent on air travel to deliver visitors to the island paradise. Starwood Hotels & Resorts Worldwide Inc., one of the state’s largest hotel operators, has dramatically scaled back pricing at its properties. Ocean-view rooms at the Royal Hawaiian, once $575, are now going for $320 a night. At the Sheraton Moana Surfrider, $420-a-night rooms have been reduced by nearly half to $228.

In Manhattan, hotel brokers began advertising “distressed rates” at several hotels. At https://www.hotelrooms.com, screens showed the rates at Holiday Inn Wall Street dropped from $299 to $99 nightly. At Belvedere Hotel on West 48th Street, room rates plunged from $220 to $99; at Carlton Hotel, $199 to $99; at Michelangelo, $345 to $75; and at Franklin Hotel, $265 to $99.

Among airlines, the best bargains are to be found among smaller carriers.

Las Vegas-based National Airlines is offering $25 round-trip fares from Los Angeles to Las Vegas and $75 fares from New York to Las Vegas--but you have to fly into Vegas on a Tuesday to get those bargain deals.

Also, Southwest Airlines has extended a sale that was to have ended shortly after the crashes of Sept. 11, offering one-way fares of $34 to $89 for service between any two cities it serves. For $178, passengers can fly round trip from Los Angeles to Islip, N.Y., the carrier’s nearest airport to New York City.

America West basically has matched that sale. Both offers, which exclude certain federal taxes and facilities fees, will cover travel dates into 2002.

At major airlines too, many expect fares to drop in the next few months. But so far, the largest airlines have been more preoccupied with cutting costs and adding security--no new sales have been offered by industry leaders American, Delta or United since Sept. 11.

This week, Carnival Corp., the largest cruise line, cut its lowest price for a three-day cruise from San Pedro to Ensenada by $50 to $249. The line also is offering seven-day Caribbean cruises beginning at $549 and Mexican Riviera cruises for as little as $599. Princess Cruises is offering free air fare for certain Alaska cruises sailing next year. Other Princess discounts include a nine-day Mexico-Hawaii cruise for $899 and up.

At travel agencies that specialize in cruises, agents say they expect further discounting next week, once the nation’s air traffic situation stabilizes further.

Some experts doubt low air fares and cheap hotel rooms will entice wary travelers whose primary concern is safety.

“It’s insulting to consumers to think they’re so shallow that they’ll react favorably to a bargain” at a time like this, said Alan Villaverde, vice president and general manager of Peabody Hotel in Orlando, Fla.

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Bargain Prices

Hotels, airlines and cruise lines have begun to offer discounts to lure back travelers. Restrictions typically apply.

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Hotels

Sheraton Moana Surfrider, Honolulu: $228 (was $420)

Holiday Inn Wall Street, New York: $99 (was $299)

Hotel del Coronado, Coronado, Calif.: $125 (was $250)

(Per room, double occupancy)

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Airlines

National: LAX to Las Vegas, $25

Southwest: LAX to Long Island, N.Y., $172

America West: LAX to Fort Lauderdale, Fla., $178

(All fares round trip)

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Cruise Lines

Carnival: 3-day Bahamas cruises from Miami, from $249

Princess: 9-day cruises from Mexico to Hawaii, from $899

(Per person, double occupancy)

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Source: Times research

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Times staff writer Tom Gorman contributed to this report.