Travel&Vacation

Seniors on the Go

Over the last year or so, I’ve reported on the decline of senior and other discounts. AARP deals aren’t what they used to be, United is nuking “Silver Wings Plus Premium,” and Southwest is the only remaining big airline with worthwhile senior deals. To me, the decline in senior discounts is part of a larger picture—a drop in the number of group and across-the-board discount programs, generally. Instead, you’ll see more shorter-term and targeted deals. Here’s what I think is happening.

First, you have to remember that it was never the intent of travel suppliers to be especially nice to deserving seniors (or any other group). Instead, senior and other discounts served as a way to increase revenues and profits. Specifically, the objectives were to sell services at reduced prices to some groups of customers who were known or thought to be sensitive to price changes, while continuing to sell at full retail price to customers known or thought to be less sensitive to prices. As long as the suppliers had excess capacity (airline seats, rooms, cruise cabins) to sell, better to sell at discount prices than not to sell at all. To make this pricing process work, suppliers had to find ways of building “fences” around the discount prices to make them unattractive or unavailable to those folks thought not to be price sensitive.

Age was an easy fence to build and administer. Retired seniors, in general, had less disposable income and more flexible time constraints than younger folks still earning incomes, so the senior discount was a crude but effective way to attract price-sensitive travelers while still charging most others the full retail price.

Recent changes in the industry, however, have altered the conventional wisdom. Airlines and hotels have become much more skillful at manipulating prices to travelers of any age: They no longer need to give broad-brush senior deals. Airlines, especially, have raised load factors to the point that they have little or no excess inventory they need to sell at discount prices. At the same time, low-fare airlines have eliminated many of the restrictions that the legacy lines relied on as their fences.

By offering all its deals to members as young as age 50, AARP has unwittingly encouraged some hotels to offer fewer deals, too. Younger AARP membership consists of lots of travelers still active in business—and therefore targets for paying full retail.

Given these and other, similar developments, where and how will you find the biggest discounts in the future?

For air travel, Southwest is about the only game in town, and even its senior fares aren’t always better than its any-age fares.

Members of a big group—with enough clout to drive lots of business—will still find hotel and rental car deals, but they’ll be smaller than previously. The two biggest such groups are AAA and AARP: These days, discounts are generally identical for both, and they’re generally around 10 percent or less—a bit more in a few cases, less in increasingly more cases.

Instead of being broadly available, really big discounts will be more limited as to both time and location or route: short-term “sales” to fill sudden business lulls, off-season downturns, or local situations. Many of the best deals will be last minute only.

Bundled air-hotel deals will be better than either air or hotel purchased separately.

“Opaque” sites Hotwire and Priceline will continue to have the biggest discounts, but probably with fewer choices overall.

You still will be able to find some good senior deals overseas, especially in Europe. More on those later.

As before, I suggest you always check for any senior deal that may be available. Treat each senior deal as a fallback position, to be used only when you can’t find something better that’s available to travelers of any age. And to cut costs even more, figure on moving down market a notch or two.