An upside to high prices at the pump

2. Rental cars: bigger is ... cheaper?
Soaring gas bills meant that rental companies were, in the words of one insider, getting “slammed” — and the beneficiaries are you, the traveling public. Don’t believe me? Try this: Go to the Web site belonging to a major car rental company, like Avis, Enterprise or Hertz, and pull up a random rate quote. Then head over to Hotwire.com and find out how much less the same car would cost. Then go to Priceline.com and bid a few dollars a day below that. Oh wait, you’ve done this before? No, you haven’t.

Here’s the thing about rental cars that few people know. The larger cars can actually be cheaper than the matchbox cars. Why? Because travelers want to save gas, which drives up the demand and prices of vehicles with better fuel economies. Oddly, smaller cars and hybrids could cost more than SUVs and minivans.

What this means to you: Bigger is better. If you have a large family or if you’re driving a short distance, bid aggressively for a larger car on Priceline. (I just snagged a full-size car at Los Angeles airport on Priceline for what Hotwire wanted to charge for its smallest vehicle. Go figure.)

3. Airline tickets: still pretty darned cheap
Yes, this summer’s airfares are up about 20 percent from last year. But they’re still a bargain. The average domestic airfare for the first quarter of 2008 was $332 — the same price as it was a decade ago, according to the Bureau of Transportation Statistics. And there are signs that consumers are resisting further increases, according to my friends over at Farecast. That’s bad news for airlines like US Airways, who envision a future where they charge outrageous sums of money to fly between big cities, presumably leaving the rest of us to ride the bus. If passengers refuse to pay higher prices, something’s gotta give.

More by Christopher Elliott 5 creative new car rental fees to avoid Now that’s a change fee 3 things travelers will lose and gain in recession Spring broke: 6 secrets for no-cost travels Deal or no deal? Spotting a real bargain Navigating the new world of airline tickets Post-fee carry-on bags you've gotta have 7 tips for blogging your way to a better trip Changing travel one tweet at a time Be a YouTube star on your next vacation The fall of green travel More Christopher Elliott columns

It doesn’t take an aviation analyst to figure out what might happen if fuel prices again start heading north. Customers eventually will refuse to pay exorbitant ticket prices, and the weakest airlines will fail. But I don’t envision a future in which two or three remaining carriers are able to set their own monopolistic prices. Instead, I see a future where the poorly-managed air carriers liquidate and new airlines emerge to meet demand from air travelers. These upstart carriers will be more efficient, customer-friendly and unencumbered by the poisonous corporate cultures that have defined many of today’s dysfunctional airlines.

What it means to you: In the short term, you may pay more for an airline ticket. But don’t let the airlines name their own price. Know when to say when. Force the incompetent airlines out of business by refusing to do business with them. The sooner you do that, the sooner you’ll pay a more reasonable fare.

Higher fuel prices have already forced travelers to make some long-overdue changes — whether it’s cutting back on trips or being more mindful of our limited energy resources. Cheaper prices at the pump threaten to put a dent in the progress.

I’m not the only one who feels that way.

“I am enjoying the high price of oil,” says James Edward Wright, a retiree from Duluth, Minn. “For too long, citizens told our political leaders to make sure we have low gas prices, even if we have to drill holes in some third-world country that hates us. We need $4 to $5 a gallon gas to make it painful enough for us to demand a fix.”

Couldn’t have said it better myself.

Every Monday, my column takes a close look at what makes the travel business tick. Your comments are always welcome, and if you can’t get enough of my column, drop by my blog for daily insights into the world of travel.

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