Is it wrong to say “wait for reopening”? With prices fluctuating depending on supply and demand, now is the time to take advantage of flights and hotels!
GoTo Travel (GoTo) is about to reopen. Last year, when GoTo was in effect, you could stay at domestic hotels and inns with a 35% discount and a 15% coupon, and tours that included accommodations and flights or trains were practically half price. In addition, the coupons could be used for a wide range of items such as souvenirs and daily necessities, making the campaign popular as a way to save a lot of money, and it is still fresh in our memories that the tourism industry, which had been chilled by the Covid-19 disaster, came back to life.
At the same time, however, the popularity of the campaign was concentrated on high-end hotels and inns, while small- and medium-priced business hotels could hardly benefit from the campaign, leaving the issue of “unfairness” unresolved.
It has already been announced that the rules for the reopening of GoTo will be changed based on the problems encountered during the previous implementation. Specifically, the discount rate will be higher on weekdays than on holidays, there will be a difference in the amount of coupons between weekdays and holidays, and spring break will be excluded. In other words, it is not a good deal for working people and families with children.
Furthermore, many airplanes and hotels are introducing a system where the price increases as the number of reservations increases, so there is a high possibility that the price will soar even higher than it is now. In fact, it can be said that the current “pre-GoTo” period is the best time to save.
Rules change when GoTo reopens; will luxury hotels and holidays lose their value?
Let’s take a look at some of the major changes when GoTo reopens.
The discount rate on travel prices will be reduced from 35% to 30%. The maximum amount of discount will be reduced from a flat rate of 14,000 yen per night to 10,000 yen per night with air or rail transportation, and 7,000 yen per night with accommodation only. In some cases, a certificate of vaccination or a negative PCR test will be required to qualify for the GoTo.
This will certainly reduce the sense of inequity among lodging facilities, as the previously available deals at high-end lodging facilities will be reduced, and lodging at around 10,000 yen per night will benefit the most. It also makes sense to offer more discounts on weekdays, when occupancy rates are low to begin with, and to avoid “densification”. However, for people who can only take a large amount of time off on weekends or spring break, or who have difficulty traveling, it will still be difficult to save money on holidays. In addition, there is a high possibility that large holidays (Golden Week) will not be covered by the program as well.
Did you know? How “Dynamic Pricing” Works
In the case of airplanes and hotels, there is a big possibility that you can save more money before you go to the airport. The reason for this is “Dynamic Pricing”.
According to the Digital Dictionary, dynamic pricing is “a method of adjusting demand by fluctuating prices according to supply and demand conditions. It is also called a variable rate system. Demand is balanced by making prices more expensive during times of the year when demand is concentrated, and less expensive when demand decreases. In Japan, this system has been introduced for airfares, accommodation fees, toll road fees, and so on. For example, this is the reason why airfares are high during the year-end and New Year holidays and major holidays, and low during the middle of weekdays.
On the other hand, the term “dynamic package” is similar to “dynamic pricing. This is a travel product that allows you to combine “transportation” such as air and train tickets, “accommodation” such as hotels and ryokan (Japanese inns), and other options (such as rental cars) as you wish. Dynamic packages are also based on dynamic pricing, where the selling price fluctuates depending on availability.
Although you can purchase a package up to the day before departure, the price tends to be higher if you book six days or more before departure. Compared to airline tickets, which are not cheap unless you book early, dynamic packages are a blessing in disguise, but you should book at least one week before departure.
The real reason why accommodation prices soared during last year’s GoTo period
In the case of airplanes, hotels and inns, the prices keep going up as the number of passengers increases due to dynamic pricing. Dynamic pricing is the reason why the prices of hotels went up across the board during the GoTo period last year. There were also some “GoTo price hikes” where hotels raised prices on their own.
Since October of this year, when the state of emergency was lifted, the number of domestic tourists has been visibly increasing. Flights are full across the board, and popular tourist spots are gradually seeing a return of visitors. Prices of airfares, hotels and inns are higher than when the state of emergency was declared, but they have not actually risen that much yet. Even though the situation of the new Covid-19 infection has calmed down, it is thought that there are still many people who refrain from traveling with overnight stays and wait for the GoTo to resume.
However, as mentioned earlier, the new GoTo will offer fewer deals on luxury accommodations, and holiday deals will be reduced or excluded. Moreover, the GoTo offers at most a 30% discount. For example, a search for hotels in Kyoto in mid-December shows many in the ¥3,000 per night range; a discount of about 30% is still possible, and there is a great possibility that the price may be even lower now.
Flat rates and travel timing for trains, which are different from airplanes and hotels
It’s also important to note that not all travel is affordable with GoTo.
For example, if you are traveling on the Shinkansen (bullet train) or limited express trains, the fares are basically fixed and do not fluctuate. With travel combining trains with hotels and inns, you don’t have to rush to make a move before your go-to, and you can watch your go-to and make a move afterwards. It’s not as volatile as a combination with air travel.
Travel discounts abound in addition to the GoTo, and it’s also possible to “move while you can.
In addition, there are now many travel discounts such as the “prefectural residents’ discount” for local residents. Although it is called “prefectural residents’ discount,” there are moves one after another to expand the eligibility to neighboring prefectures. Some coupons, such as the Discover Chiba coupon that offers discounts on lodging in Chiba Prefecture, can be used by people living far away from the prefecture.
In early December, I booked a round-trip ANA flight from Osaka to Nagasaki and a one-night stay at a four-star hotel in Nagasaki City through ANA Dynamic Package one week before departure using a coupon that required one-way use of Nagasaki Airport, for a total price of 16,000 yen. At that point, the airfare alone was at least 27,000 yen each way, so it was pretty cheap. Two weeks later, Osaka-Fukuoka was also about 20,000 yen for a round-trip flight (JAL) and one night stay at a four-star hotel in Hakata City.
Even if there is no uniform nationwide campaign called “GoTo,” each municipality is already running its own “regional GoTo,” so to speak.
In the wake of the Covid-19 disaster, I think that all travel enthusiasts have realized the need to “move while you can. We were repeatedly asked to refrain from traveling unnecessarily, and there were times when we could not even travel within Japan. There is no guarantee that the new Covid-19 infection will not spread again in the future. I would like you to know that there is a surprisingly large possibility that you can actually save money by daring to go before the GoTo.
The information and data in this article are current as of December 24, 2021.
Text and photos (except as noted)： Aki Shikama / Aki Shikama