Archive for July, 2008

Sensible Pointers for Planning Affordable Getaways

This year seems to be an expensive vacationing year for me inspite of price increases all over the board. First Mexico cruise, second Chicago Road Trip and now 5 day trip to LA&LV. I guess, I am one of those country men who is really helping the economy by spending as our President wished.



What can I say? Sometimes things just happen in auto pilot mode and we don’t have any control over it. Fortunately, my short term savings funds is really came in handy to bail me out. I am not here to talk about Short Term savings plans at this time.



I also don’t want to bore with you all with detail trip report like usual. I decided to give a shorter version by listing some important tips and tricks for getaway planning.



A month ago, we went to multi-city vacation from Houston to LA – LV – Grand Canyon.
This one was a planned to entertain my in-laws who came long way from India for couple of months. I booked the tickets way in advance(3 months ago) before the oil prices started sky-rocketing pushing the air ticket price way high. Thats were advance planning always helps out.

Here is my list of pointers which will surely makes some money sense for your vacation plans.


1. Multi-City Vacation Planning


Many of you know that planning a mulati-city getaway is a tricky one. There is a great deal of complexity on booking air tickets and car rentals. I still tried (only orbitz.com has this functionality)starting the vacation from (LA) one place and leaving another (LV). It not only costed little more and didn’t really work out. So I dropped that plan and started out to do the usual way of starting and ending at same place and rented the car to travel to places.


I need to pick the right starting point comparing the mileages and days spent in each place. I started at LA (2days), gone to LV(2 days) and travelled to Grand canyon from there for a day to LV and then back to LA to board the flight. I picked LA starting point because I got a better air ticket deal compared to Las vegas. You need to figure out which is a best way to do it in your case.


** – Plan your multi-city vacation by taking the air ticket deals and mileage into account. Be flexible to change your plans.


2. Use Credit Card Points
As I mentioned, I booked the tickets way in advance before the airlines started charging for baggages and increase fuel surcharges. I got cool deal of $284 round trip. I also combined my free ticket which I bought using my credit card score points savings my ticket charges ($300). Thats always a good thing.

Many of my friends travel a lot for their projects. I always envyed them for racking up their sky miles which gives out free air tickets all the time. But I was able to do with my DCU visa card only after 5-6 years accumulating points to get to 40,000 to buy a free roundtrip ticket.

My price, $823.50 for 4 people including a free infant on lap and free ticket using credit card points.


**- Do check your credit card points if you are not a frequent flyer. Use them and save money during tough times. Don’t just use points to buy unwanted/small things and try to store up for big items.


3. Look out for Hotel deals


Once you booked your air tickets, next big item in the list is to book lodging. Try to check out for package deals or cheap week days prices. Most of time, if you book 3 days together you will be able to save good money. Also I use to save money by staying away from the hot spots. Now with high gas price you really need to compare how much you are saving by staying away and how much gas expense.


Also you will find good cheaper Studio Rooms during the weekends and may be during week days. You might not get free continental breakfast but you can eat better breakfast from the money you save on deals.

The best website, I would recommend is Hotels.com It is far better than other sites with lot more deals, cheaper compared to Orbitz, hotwire or Priceline. It also has got lot more options to compare and check reviews before you make your decision.


My price $110 for 2 days for 4 people in LA, $135 for 3 days for 4 people in LV – average $250/5 days for 4 people.


** Do check different website for deals, compare the rates&reviews before making the decision. Don’t just book if you see cheaper hotels, they might not be really good.





I will continue the rest of my tips and tricks in my next blog, until then have a great week!!

Price Profling – A Unknown Business Strategy – Final Part

Sorry for coming out late on this final part of this blog. Last week was little different and out of schedule. I was busy with my court date for Traffic ticket contesting and my first time blood donation which turned out to be little interesting one. I passed out at my work after the blood donation which seems to be normal for first timers because of the sudden blood loss.
 


I had to literaly say “NO” to many of my extra-curricular activities because of the pleasing request to take rest from my well wisher which I can’t deny.


Alright, let me continue where I left off from the last week post by adding some more interesting story to this topic and also share my real example on how to get around or take advantage of it.

Last week I ended the post saying, “Price Optimization” is the unknown business tactic starting to be used by many industries.
As per my research, Airlines started to use it in 1980’s. AA and many airlines successfuly implemented them and turned around their profits during the tough times using this very own strategy. It is so successful other industries like apartment property managers, hotel&car rental companies, Big Retailers, Event Ticket sellers and now the banks, mortgage lenders are attracted towards this business strategy and making very good progress in doing so.



I have a real example to prove the fact that banks are also way deep in implementing this strategy successfully.



Two years back, I was in the market for refinance. Like any 3 out of 5 americans who got trapped into ARM loans during the housing market boom, I was one among them. I had 5/1 ARM with 6.125 APR. I got warnings many times from my mortgage lender CountryWide and I kept hearing about it over the media and financial news. So I decided to take action and didn’t want to take any chance waiting till the end.(If I would waited, I could have got better rates now) I started looking out for better interest deals and refinancing options.


As I mentioned my loan was serviced by Countrywide at that time after Ryland Homes sold my loan to them. I was looking for a rate closer to it so I don’t want to see a big increase in my monthly payment. I also decided to to reduce the number of years to finish the loan quickly. I called Countrywide to check with them whether about my options and see whether they will be willing to refinance my loan for better rate.



After a long telecon, I only recieved an answer for refinancing option of higher rate and bigger closing cost which will be rolled in to my loan. Inspite of my why and what questions, they never want to come down. Being a deal hunter myself, I never settle for anything at first attempt. After a month long hunting, I finally ended up with 20 year fixed with 6.375 APR with GMAC mortgage.



According to De Lotto’s
research(courtesy:Smartmoney magazine), more than 55 percent of banks already have adopted some form of price optimization, and more than 75 percent plan to use price optimization in some way by 2012. The report surveyed 34 top banks from across the world; more than half were based in the U.S.



In this bad economy, now its the chance for every industry to turn around and show some profits and this will be the right tool for their effort. As a consumer we should be very careful in making any financial decisions.



How to get around or take advantage ?



We all got options in any situation if you look around. You can either decide to stay away from it or make a oath to ride the wave by taking advantage of this new trend. I would definetly urge you to take this opportunity to ride it as its going to catch to you sometime or other.



1. If you are looking out for loans/mortgage, don’t look in your bank whom you had account for years. It doesn’t matter whether you have good credit score and long term relationship. If they happen to use this strategy, you might be on their books to be get ripped with high rates.



So look out for competitors for banks in your area and also try to go out on the web to search for good deals. But be wary of the cold marketing calls or emails from mortgage brokers with cheap rates, they might be bogus. Be careful in choosing the right one with best closing cost.



2. When you are trying to book hotels and rental cars, look out for deals depending on the market. Try to plan your vacation or trip accordingly taking advantage of weekly rentals or 3 day rentals which cost less than 2 days rentals. Also Hotels charges higher rates for friday and saturday night stays especially booked in short notice. Plan to book them in advance and try to hunt for any discount codes or cheap coupons online or ebay.



3. Do have plans to take your family for a ball game or Football or basketball game? Event ticket sellers charge high on mostly watched games. When there is a demand, the price goes up. Try to settle yourself for games when there are mediocore teams visiting home. Also try to find out tickets from your work or friends network which will turn out free and no money from your pocket.



4. Are you looking out for Renting apartment or
Buying car, your credit report and credit scores are more likely to be looked at to determine the rents and rate. A good credit score does matter but other factors also play a roll as per the price optimization strategy.



Try to spend time researching over the internet to see competitors around the area and check them out. Apartment renters put special offers all the time and also try to find a friends to take advantage of referral programs many property companies offer. For car buying, you can bargain since you are the buyer. I know its hard for many to bargin, its your money so don’t just give it up when you spend hours earning them.



5. Got attracted by the nice cashmere sweater in a high priced retail store. Hold on!! Don’t just buy it yet. You might find this cheaper online or in other retailers. You might find coupons which you can use to get some discounts. Just turn off your rushing urge to buy anything fast.



My conclusion, be on the look out for deals on any of your shopping and never settle for less if you deserve the best.

Price Profiling – An Unknown Business Strategy

Few years back(2003), when I was living in an apartment complex owned by a property manager&companies(PMC). I was forced to renew the apartment lease every 6 months which was new to me moving from Boston. I came to know thats common in Houston area giving away a free ride to PMC to jack up the rent more frequently.




Many will agree obviously that is bad as tenants and shares my frustration. Most likely the rent will be increased 10% which PMC will be keen on instead of trying to retain the tenants. At the sametime they offered really good deals for the new tenants especially with free half month rents and cheaper rents to trap them.


When I enquired with the PMC folks asking them “what happened to old customer courtesy?”. We are your tenants already and don’t you like to give a good deal for us instead of jacking the rent compare to new guys. They would say, “NO, it won’t work like that way”. Once you are tenant, you don’t get any promotions and you are prone to increase in rent every renewal. They just don’t want bend.



There were lot of apartments near by so many tenants just took the pain of moving to different apartments every time they jack up the rent hoping to save some money in the long run. But some just stick with the same apartment not willing to take the pain of moving. This trend continous till today as I know from my friends who live in apartments. PMC people just don’t care about you these days, they just want to make money somehow.
 
At that time, I really didn’t understand it. Usually if you are customer with any business for sometime, they tend to show you some customer courtesy and appreciate being their customer for long by offering discounts to let you stay with them. I wasn’t really thrilled that time and so just moved on bought a home to avoid all this trouble.



I see same type of business strategy used in many businesses like Airlines, hotels, Events Tickets and other industries more in past years. I was wondering all about it and I am sure many of you might also thought about “why some of us has to be dirt cheap price and others end up paying Himalaya price”. I just thought its just the way of business until recently. I found the real answer for my unasked question in SmartMoney magazine. There was an article digging deep about this strategy. I just got to know the real essence of this tactics and wanted to share to you guys.


This common business strategy which is unknown to ordinary consumers is called “Price Optimization“. There is no more long time customer courtesy anymore, its all about how much many money a consumer should pay taking into account the current market condition, geographical location, local demand and lot more parameters with complicated calculation done by the computer software.


I know its getting interesting now. I have lot more information to share on this topic like “What other industries are starting to do ?, “How as consumer can try to escape or be on the otherside of the fence to take advantage of it” and much more with my realistic research in my next part. So stay tuned.



Have a good weekend folks…

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