Top-flight frills come with low-ball prices

Their managers might not admit it, but luxury hotels, cruises and tours are on sale.

"This is a great time for people who are interested in upscale properties to get them at a bargain-basement price," said Diane Hilliard, president and founder of Hilliard & Olander Ltd., a Stillwater-based travel agency that specializes in custom-designed luxury trips. Hilliard said that her clients who normally book reservations at four-star inns are now able to upgrade to some of the world's most legendary hotels, including Claridge's in London and the Ritz Paris.

That is, if they have the cash. While travel experts initially predicted that luxury destinations would not be as hard hit during the recession as more moderately priced options, the financial turmoil of the last part of 2008 took its toll on even the wealthiest consumers.

Sixty-seven percent of Americans with discretionary income of $100,000 or more said they were planning to spend less on travel, according to the Annual Survey of Affluence and Wealth in America, a study produced by marketing research firm Harrison Group and American Express Publishing Corp. Some of Hilliard's clients were affected by the Bernie Madoff Ponzi scheme.

Corporate travel is also on the decline, with some businesses putting up their employees in less expensive hotels or simply choosing video conferences over wine-fueled dinners at the Four Seasons.

What this means is that there are a lot of pillow-top beds fitted in 600-threadcount sheets to fill.

Resort-credits lower costs

"Properties are doing a good job of keeping their rates relatively steady," said Tim MacDonald, president of Classic Vacations, a luxury package company owned by Expedia. Instead they are offering deals such as every third night free or resort credits that can be used for meals, golf games or spa treatments. Some are introducing themed packages, which let them discount prices without diluting their upscale appeal. "To the consumer it doesn't matter because their trip will be cheaper," said MacDonald.

The upscale Canoe Bay resort in Chetek, Wis. (www.canoebay.com), has introduced the Personal Bailout Package, which includes a two-night stay with an automatic cottage upgrade, plus one free dinner for two. The weekend will cost you $830 -- hardly a bargain, but a $200 savings at an exquisite property that rarely offers discounts.

Rare safari savings

Luxury cruises are also coming up with some enticing deals. The Yachts of Seabourn (www.seabourn.com) is taking $1,000 off seven-day Mediterranean cruises in 2009 for passengers who book through Feb. 28.

Glitzy ski resorts are getting in on the act, too. The Little Nell in Aspen (www.thelittlenell.com) is touting a Hassle-Free Package that is valid until April 12. It includes up to $250 in credit for shipping your luggage with a stay of four nights or more, free demo ski or snowboard packages, in-town transportation and round-trip airport transfers via private car service.

Will these incentives work? MacDonald says that the response to a Classic Vacations $500 airfare credit has been surprisingly strong. "I think people are responding to value," he said.

The biggest challenge, according to MacDonald, is public perception. "People aren't aware of just how good the deals are," he said. "Those of us in the know are just sitting here in awe."