Airfare to Hawaii
Everyone is always looking for cheap airfare to Hawaii. But why don’t people also look more for cheap hotels in Hawaii. Actually, if you stay for more than a week in Hawaii, your hotel stay could cost a lot more than the airfare to Hawaii. In fact, a lot of Hawaii vacation packages with air and hotel components are cheaper than separately buying air and hotel. Why is this? Typically, it is because hotels are selling something that has a higher percentage of fixed costs than it takes to recover costs on airfare to Hawaii. This is because major elements of the cost of running a hotel remain the same, especially those relating to the cost of the hotel property. Airlines have to pay higher viable expenses, particularly on fuel. As a result, the hotel has more flexibility to lower its retail prices more so than the airlines. So in a sense, a good price on an air and hotel package may be largely “subsidized” by the lowered hotel cost of the package.
That being the case, you can find some cheap Hawaii airfare and hotel package deals that are sold by the hotels. Hotels can afford to heavily discount the air portion of their air and hotel package because, in theory, all they want to do is to make money on people staying at their property. And if they make anything at all on their air portion of the package, it represents just pure profit. So they can even afford to give the Hawaii air part of the package at no profit at all. It’s almost like loss leader pricing. Some hotel chains in Las Vegas also promote and use this model. Sam Boyd Hotels are famous for using this model with a slight difference; they may not make money on the flight or hotel part of their pacakage, they just make money from gambling.
