Last Minute Bookings - The New Normal?

Hotels and airlines are willing to undercut themselves and their advance planning customers in order to fill unsold space. The trend has been around for a while, but it seemed like only a lucky few or those who were very flexible could get a last minute deal in the past. For example, being single gives you a whole lot of flexibility that a family of 4 may not have. According to the Wall Street Journal today, this last minute trend may be something of the new norm.

Of course new norms change all the time. The examples cited in the article show that currently this does pay off. I think this can only work with airlines and individual hotel bookings, however the cruise industry seems to be doing the same thing. Well, I personally don't care much about what the cruise industry is doing and frankly all these 'travel products' have become commodities. My concern is how this mentality transfers over into the tour business.

As a company that sells mostly self-guided trips, we can handle it. In fact, we can prosper from it where I am sure many guided/group tour programs with fixed departure dates cannot. We will happily take bookings at the last minute and organize the whole tour to start any date; that is our offer anyway, so if more people go to booking last minute then we can be there for them. How can a group departure do that?

The majority of people who book 'tours' are booking group, guided programs with fixed departure dates. These trips are organized by companies that have to lock up hotel rooms and services very far in advance. Often the hotels don't like to tie up rooms without some guarantees and so comes the non-refundable deposits, etc. These tours need early bookings to assure departures and hold space. If minimum numbers are not met far enough in advance, a tour company has to decide to either cancel the space to avoid lost non-refundable deposits to the hotels, or raise prices on those who book in advance to keep the trip. The latter is almost never the solution. These same hotels that would discount to last minute travelers booking direct impose higher restrictions and standards on the tour companies that market their product and bring them groups.

So, I would expect to see more group tours with fixed departure dates to start canceling. This may leave some people who booked in advance out in the cold - with airline tickets and no tour. We have been able to help many of these people in the past who are willing to go to a self guided trip, but for those who aren't - well, tough luck. Therefore, who wants to book a guided group tour with fixed departure date in advance??

Tour companies, including ourselves, are pushing hotels and other service providers to be more flexible in their terms, but when the demand for direct bookings is so strong (and more profitable to the hotel), why should they? This could mean quite some changes for the tour industry.

L