Travel expert Barry Choi says he couldn’t find a hotel in Vancouver recently for less than $600 a night, more than the cost of his return flight from Toronto. I offer up this anecdote to document what could be the Number One challenge in travel today, which is finding an affordable hotel room in big cities. Mr. Choi has some thought on this, so I invited him to do a Q&A. Here’s the exchange we had by e-mail:
Q: What’s your take on why hotel prices are higher now than anyone can remember, and how long this can continue?
A: It really comes down to supply and demand. It’s not just regular people who are travelling again. Many companies that cancelled conferences or events during the pandemic appear to be hosting them again, which has also driven up demand for rooms. Also, increased costs due to inflation and cleaning are being passed onto travellers
Q: Will I save the most on hotels if I book early, or last minute?
A: One strategy I recommend is to book a fully refundable hotel room early, so you have something secured. You can then search for cheaper rooms as you approach your travel dates. If you find a better deal, book it, and cancel your original stay.
Q: What about those last-minute booking websites where you get a discounted rate?
A: Sites like HotelTonight and Hotwire can offer good value for last-minute bookings. It’s worth noting that if hotels are releasing rooms to those sites at a discount, they’re probably offering them cheap on regular sites too. If you’re fully flexible, you could gamble for a last-minute deal. However, most travellers would prefer to have something booked well in advance.
Q: Are there any dates or destinations that offer an opportunity for lower hotel costs?
A: If you can, avoid summer or any time there’s a major event. If you’re thinking about a sunny destination, don’t travel during American Thanksgiving, or from mid-December to late January. If you can stay outside of major tourist areas, prices tend to drop, too. Look for something on a transit line that will give you access to the city.
Q: What can you tell us about a new Aeroplan program called HotelSavers?
A: HotelSavers is the next phase of Aeroplan and it can give members incredible value for their points when booking with 39 brands such as Fairmont, InterContinental, Shangri-La, Holiday Inn and more. I searched hundreds of rooms and found many HotelSavers rooms with a value of around 1.3 to 1.6 cents per point (CPP) for redemptions. This is significant because most hotels and general travel loyalty programs don’t typically give you a value of more than 1 CPP for accommodations. Of course, I also found rooms with a value below 1 CPP, so your value will vary based on time and destination. It’s encouraging to see this kind of change since Aeroplan hotel redemptions were typically not the best value.
Q: How much are you saving these days with Airbnb and VRBO? My sense is that they’re like Uber and Lyft – the great savings they once offered has been diluted.
A: I’ve seen less value from vacation properties these days – prices have gone up and there are more fees. Honestly, some cleaning fees have become ridiculous. That said, these types of accommodations are different. You can rent homes that fit multiple families or are unique. Instead of thinking of Airbnb and VRBO as cheaper options than hotels, it’s better to think of them as another option for accommodations.
Q: Do any of the hotel loyalty programs stand out to you for delivering discounted rates quickly?
A: Every hotel loyalty program typically provides immediate benefits such as free WiFi, late check-out, and even member discounts. However, premium benefits such as free breakfast, lounge access, and room upgrades, are typically only offered to members with status. That said, there’s no denying that Hilton Honors, IHG One Rewards, and Marriott Bonvoy offer some nice benefits. One lesser-known program is the A-List Insider from Aqua-Aston Hospitality. Members can save up to 15 per cent and get a free room upgrade at some of Hawaii’s top properties.
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Rob’s personal finance reading list
Addressing the greedy worker narrative
An economist tackles the idea that workers are stoking inflation by asking for wage increases in line with the rise in living costs.
The job hopper’s guide to resume writing
An expert explains here how to finesse job hopping on your resume. With all the churn going on in the job market these days, this sounds like useful advice.
Inflation and your car lease
A lesson on how there may a pleasant, inflation-beating surprise for people with vehicles that are coming to the end of their lease.
Women spend more on the holidays than men
The HerMoney website on how women can avoid overspending during the holidays. “It’s not uncommon for women to handle the bulk of the work around holiday gift-giving.” Um, sounds familiar.
Today’s financial tool
A guide to price-matching at major Canadian retailers, including those selling groceries, home improvements and electronics.
The Money-Free Zone
I found another great cover of the song Summer Breeze, this one by the Jamaican-Canadian reggae artist Jackie Mittoo. In a previous newsletter, I dropped a link to the Isley Brothers version. And now for the original Seals & Crofts take. Classic soft rock.
Watch this
Are you better off taking $100,000 now or $2-million in seven years?
ICYMI
What I’ve been writing about
- Big banks for your GICs? Stop laughing and check out their special rates
- It’s time we levelled with young people: Housing affordability as we knew it is gone forever
- What to say when someone asks the most dreaded question in personal finance: Will you be my executor?
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
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- 💰 Your money: Are you prepared for the pandemic wealth boom to blow up in our faces? • This hard-working 24-year-old is nailing it financially. But where’s the happiness? • Who should and shouldn’t worry about the wave of rate increases this year, and what every stressed-out borrower should do right now • Don’t make this potentially costly assumption about the CPP Survivor’s pension
Rob Carrick