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Hotel prices could bust your summer travel budget

Priceline travel app
Justin Sullivan | Getty Images

There's a dark side to cheaper flights and road trips, if you're hoping for a bargain summer vacation. Your hotel bill may more than offset the savings.

AAA expects more than 38 million Americans will travel over Memorial Day weekend, a figure it says is the second-highest volume on record and the most since 2005. It's no wonder: Lower oil prices have created some bright spots for summer travelers.

Airfare is down 12 percent year over year, according to a recent report from Hopper.com, with summer fares expected to be the lowest in seven years. Gas prices — currently at $2.28 a gallon, per AAA — could be at an 11-year low for drivers over Memorial Day weekend.

Hotel prices, however, have been creeping upward. In March, domestic hotel prices were up 2.9 percent from a year earlier and international rates, 1.2 percent, according to a report from Adobe's Digital Price Index. In the most popular destinations, summer hotel rates are up an average 17 percent, according to Orbitz.com.

"There's a very clear trade-off," said Mickey Mericle, vice president of marketing and consumer insights at Adobe. As cheap airfares and gas make it more enticing to travel, hotel inventory fills up, she said — and the Adobe report found that destinations with the lowest flight costs per mile had the highest hotel prices.

But travelers still have plenty of tricks and strategies they might employ to keep higher lodging costs from busting their summer travel budget:


Reassess destination

If you haven't settled on a getaway spot yet, look to "reverse destinations" more popular at other times of the year. For example, ski resorts often have great year-round activities, but drop their prices in the summer, said Gabe Saglie, senior editor for deal site Travelzoo.com.

If you can stand the heat, try desert resorts in Southern California and Arizona as well as Las Vegas. "We're talking about prices a quarter of those we would have seen in the winter season," he said.

Factor in fees

Depending on how you book, daily hotel charges like resort fees, parking and Wi-Fi might not be disclosed upfront, said Jason Clampet, co-founder of travel site Skift.com. On vacation rentals, there can be added fees for cleaning, access to amenities like a community pool or use of equipment like beach gear.

"Make sure you know what to expect ahead of time, because that can add $20, $30 even $40 a day to your final bill," he said. That makes for easier apple-to-apples comparisons. You might find that a competing property's pricier rate that includes more is, all said and done, the better deal.

Broaden your search

Hotels aren't the only lodging option. Vacation rentals can be a smart option in hot markets, especially for big groups, said Steve Clarke, a senior director at search site Hipmunk.com. In some of the most popular cities for rentals, the site found, savings compared to nightly hotel prices ranged as high as 63 percent. (See chart below.)

A recent Pew study found that only half of Americans were aware of home-sharing services like Airbnb and Couchsurfing.com; only 11 percent have used such a service. Another option: Vacatia.com, which lets resorts and owners list open time-share rentals and resort residences; savings can top 50 percent compared to local hotels with similar star ratings.

Book direct

There can be valuable perks to booking directly through the hotel's website instead of a third-party site, said Clampet. You might be able to get a better rate or free extras, and avoid fees and tight cancellation policies.

(With many chains, booking direct is now also the only way to rack up loyalty points toward free nights.)

Monitor the market

Even after you book, pay attention to sales at that property and others, said Mericle. Unless you booked a nonrefundable rate, policies may allow penalty-free cancellation up to a few days before check in — letting you chase that cheaper rate. (Booking site Tingo.com does the watching and rebooking for you, refunding the price difference to your credit card.)

"There are low switching costs, as we would say in economics," she said.