Lastminute Bookings Launch Trend For Planes Ships And Hotel Business
Written by Jaime Levy on January 24, 2002
By Jaime Levy
With customers in airplanes, cruise ships and hotels increasing gradually but consistently, Greater Miami’s hospitality industry is seeing a new trend: visitors booking trips at the last minute.
The trend does not seem to differentiate between leisure and business travel. Across the board, the industry reports travelers committing to reservations much later than they did before Sept. 11.
Carnival Cruise Lines, for example, reports it has become common to get reservations weeks in advance instead of a desirable six months out. A Southwest Airlines representative said the company used to get bookings 30 to 45 days before a flight; now, reservations come less than a month ahead. And Loews Miami Beach Hotel normally got leisure reservations three or four months out, but two weeks is the new norm.
"It’s definitely a post-9/11 trend," said Jeff Abbaticchio, of Loews. "A lot of people are waiting to the last minute because they think they can get a better deal."
Indeed, inexpensive rates have been the best way to fill ships as departure dates draw near, said Jennifer de la Cruz, spokeswoman for Carnival Cruise Lines. But ‘how-low-can-you-go prices’ are putting a kink in the company’s business strategy.
"When business is coming close into the departure date, it makes the pricing environment more challenging," she said. "Our business model is based on booking as far in advance as possible and, as we get closer to the sailing date, to be able to raise the price. After Sept. 11 our whole model got thrown off. Throughout the fall and into the beginning of winter, we did some very heavy discounting to fill our inventory."
For hotels, Mr. Abbaticchio said, last-minute bookings are easier to handle. Even before Sept. 11, Loews held forecast meetings every two weeks – in addition to its more long-term predictions – to determine staffing and inventory needs.
The delays in bookings, he said, show vacationers booking about two weeks in advance instead of several months. For business travel, he said, companies that had requested blocks of rooms are now asking for more time to fill them.
"Usually, 30 days out is the cutoff," he said. "But a lot of groups with a 30-day cutoff are asking for extensions. People are waiting until the last minute to decide whether they’re coming to the meeting."
And Barry Moskowitz of the Greater Miami Convention & Visitors Bureau said many businesses are waiting much later to decide whether they will meet at all. Although the convention industry’s definition of "last minute" is closer to a year than a week, Mr. Moskowitz, associate vice president of convention sales for the bureau, said the organization has noticed a shorter gap between bookings and event dates.
"The events of the 11th brought everyone to a halt. Companies just had to sit back a minute and basically put everything on hold until they knew what the future was going to have in store, how things were going to play out, not only with air travel but with the state of the economy," Mr. Moskowitz said. "Everything was on hold for three or four months. Now, people are making up for lost time. Things are starting to happen faster."
With companies now going ahead with events, Mr. Moskowitz said, they are also opting to schedule them soon. For example, he said, a mid-size meeting – 500 to 1,000 people – may have been booked up to three years in advance prior to Sept. 11. Currently, those events are coming with about a year’s notice.
"We just need to escalate or enhance the time of turnaround," Mr. Moskowitz said. "It’s adapting to a client’s needs. It puts more pressure on us to have less time, but that’s the nature of the beast."
With cruise lines, hotels and meeting planners scheduling later bookings, airlines – which carry 96% of travelers into Miami-Dade County – are also feeling the crunch.
Both United and Southwest reported that they too had seen a shortening of the gap between reservations and travel.
"Following Sept. 11, we’ve seen a trend in consumers, both leisure and business travelers, booking much closer to their departure dates," said Stephen M. Beatus, United Airlines’ vice president for Latin America, Miami And the Caribbean. "Given the current climate, we must look at our advance bookings on a day-to-day basis and make the necessary adjustments to respond to opportunities and demand."
Southwest Airlines’ Christine Turneabe-Connelly was more specific, explaining that Southwest’s usual "booking curve" of 30 to 45 days has shrunk to below 30 days nationally. But, she said, the company even before Sept. 11 had a shorter buying-to-boarding timeframe than its competitors.
"We’re just trying to provide further incentives, which means more sales," said Ms. Turneabe-Connelly, a company spokeswoman.
Rick Still, who heads La Cumbre, an annual event designed to connect Latin American tour operators with US destinations, said the Latin American market is particularly prone to making last-minute commitments to travel, perhaps exacerbating what the Miami area is feeling in the wake of Sept. 11. But, he said, the trend is nothing to be concerned about: As long as people know they are coming to Greater Miami, it should not matter when they reserve their seats.
"You’re not concerned about when the trip is bought, but when the decision is made. If you’re going to go to the Caribbean you may wait, but you’re going to go to the Caribbean," he said. "What we’re looking for is people to make the decision to come here. Whether they make that decision two minutes before they get on the airplane or two months before the get on the airplane is immaterial."
But Carnival Cruise Lines’ Ms. de la Cruz said earlier is undoubtedly better. With the company’s fixed staffing levels and operating costs, she said, it is important to know early that a ship will be full – and that prices don’t have to hit the floor.
"Our experience is that price will motivate people to book a cruise. You generally can drop a price far enough down to fill the ship," she said. "But it’s not a desirable business model – you want some consistency in pricing. You want to sell most inventory farther out in advance."
Still, Ms. de la Cruz said things are becoming more stable at her company’s reservation desk: January is bringing a "booking wave," and with it, advance notice. "There are some encouraging signs in terms of people booking a little farther out."