Getting Away for Less

Resorts hope discounts, free massages will spur summer bookings

Four-dollar-a-gallon gasoline, airline woes and unsteady financial markets add up to a summer of discontent for the travel industry. But it's turning into a summer of discounts for travelers.

Since June, the Nautical Inn Resort, a beachfront property in Lake Havasu City, Ariz., has been offering a $100 "gas credit" rebate with a four-night stay, a promotion good through September. In Riverside, Calif., the Mission Inn Hotel & Spa is tossing guests $75 resort gift cards, champagne and chocolate-covered strawberries. Last week, Starwood, the owner of Westin, W and Sheraton hotels, began offering discounted room rates and a $25 gas rebate on stays of two nights or longer at more than 100 hotels (at starwoodpromos.com).

Some domestic tourism officials say they were primed for a busy summer, with cash-pressed Americans vacationing closer to home. But more economic uncertainties and the recent spike in pump prices have seriously depressed advance domestic bookings, and now many hotels say their overall summer business may end up flat or slightly below a year ago. Making things worse is the expectation that many airlines will cut capacity to vacation destinations this fall in more industry retrenchment.

As a result, many resorts are offering their steepest discounts in years. "It's the first time we've done [discounting] in the summertime," says Brad Van Dommelen, president of the Convention and Visitors Bureau in Traverse City, Mich., which is known for its freshwater beaches and high dunes with views of Lake Michigan. "We recognize that we're in a period here of some uncharted territory."

This summer in Traverse City, the Grand Beach Resort Hotel, which has 300 feet of beachfront and an indoor heated pool, is offering midweek room discounts, such as $185 for a standard double (no bay view) -- about 35% off the regular weekday rate of $285.

Golf rounds at Michigan's Boyne Resorts are down an average 10% to 12% this summer, says Mike Chumbler, the company's director of golf. The Boyne Highlands and Boyne Mountain resorts are offering a $535 package of three nights of lodging with breakfast and dinner, unlimited rounds of golf and an extra such as a free massage, a free golf lesson or a $75 restaurant credit.

On Florida's Captiva Island, the 82-year-old "Tween Waters Inn is cutting its weeknight room rates in half in a "Half Crazy Summer Sale" running through August. Jeff Shuff, the hotel's general manager, says advance reservations for June were down 18% from a year ago, though there was a last-minute spike.

Discounting could get heavier this fall if the major airlines, as expected, eliminate some flights to Florida and elsewhere. "We've never done any discounting in the winter," Mr. Shuff says, but this year, "we may have to." Airline cuts already have damped a lot of summer tourism in Hawaii. Summer flights from the mainland have fallen by more than 11% compared with last year, the result of the shuttering of both ATA and Aloha Airlines. Meanwhile, domestic fares have jumped on average 20% to 25% compared with a year ago, according to discount online travel agency Hotwire.com.

To alleviate airfare sticker shock, the Ka'anapali Beach Hotel is running a two-night package including daily breakfast, car rental and a $20 gift certificate at the poolside Tiki Grill for $499 for a family of four. General manager Mike White says the resort ran similar deals following the Gulf War in the 1990s and again in 2001, right after the Sept. 11 attacks, when air travel nearly came to a halt. But, "honestly we didn't offer discounting at this level before," he says. "It's new territory for us."

Even Maui's luxurious Grand Wailea Resort Hotel & Spa, where the lowest summer rate for a double room is about $675 a night, has a fourth-night-free promotion. And it's opening its elaborate pool area, featuring a "water elevator" ride, a rope swing and white-water rapids, to nonguests with a $580 one-day pass for two, including a private cabana, spa treatments and lunch.

Despite the deals, the average U.S. hotel-room rate this year through May was up $108, or 4.5%, over a year ago, says Smith Travel Research. Even in tough economic times, hotels are loath to cut rates, says Mark Lunt, hospitality-industry analyst with Ernst & Young in Miami. Instead, they'll throw in freebies that can be quickly rolled back if the climate improves, or they'll offer all-inclusive packages that don't subtract much from the bottom line.

Orlando, Fla. -- home of Walt Disney World, Universal Studios and one of the country's largest convention centers -- is one place seeing a jump in last-minute bookings. U.S. tourists are booking for short stays, says Gary Sain, president and chief executive of the Orlando/Orange County Convention and Visitors Bureau. But he too is bracing for airline cuts. Mr. Sain says he expects the number of seats into Orlando to fall about 12%. About 80 area hotels are participating in the bureau's fall promotions, about twice the number participating last year. Deals include a fourth-night-free offer at Sheraton Safari Hotel & Suites and a buy-one-get-one-free ticket promotion at Gatorland. "We saw that after 9/11," says Mr. Sain. "What got people back on the road to travel were discounts and deals."

Write to Candace Jackson at candace.jackson@wsj.com