Great deals on hotels and air travel are heating up—but only in certain places. Here's where to find the best travel values in years

If you think we've seen a buyers' market for travel lately, wait till summer. What with the economic crisis that has devastated business travel, airline overcapacity forcing carriers to cut fares, the low price of oil (which allows airlines to drop fares even more), the epidemic of empty hotel rooms (made worse by a glut of brand-new hotels), and the strength of the U.S. dollar, experts say that we're looking at a onetime confluence of events that will spell much greater bargains than we've seen in the past few summers. But travel won't be discounted to the same degree everywhere. There will be pockets of opportunity—certain destinations and methods of booking that will yield the greatest value for your dollar. Carpe diem.

"Summer fares to Europe will be the cheapest in recent history," says Rick Seaney, CEO of the fare-monitoring site FareCompare.com. That's because last year, U.S. airlines moved many of their planes from domestic to transatlantic routes—right before Europeans stopped coming. "While there will be really good discounts in coach," adds Joe Brancatelli, publisher of JoeSentMe.com, the online bible for business travelers, "there will be even bigger bargains in business class: An advance-purchase business-class fare this summer will cost no more than a last-minute walk-up coach fare cost last year—say, $1,500 to $1,700 round-trip."

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"There probably hasn't been a better time to travel to the United Kingdom since the summer of 1985," says Brancatelli. London is still an expensive destination, of course, but it's 35 percent cheaper than last year, thanks to the weak British pound; furthermore, "the hotels are empty and discounting heavily." Look for airfare-plus-hotel packages—such as British Airways' recent low fare that included two free nights in London—and check out VisitBritain.com's offers of free entry to many museums.

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"The convention business is a fraction of what it's been in the past," says Heather Leisman, senior director of merchandising for Orbitz. "Las Vegas and other cities that have lost business are putting rooms that were previously convention rooms back into the leisure market." In New York City, the big summer sales have already begun—such as consolidator Quikbook's promotion of 25 percent off its already substantially discounted rates at some of Manhattan's most popular small hotels. As for San Francisco, not only have room rates dropped but so have airfares on flights to and from the East Coast, thanks to Virgin America's entry into the market. I just paid $300, including taxes and fees, for a New York-San Francisco ticket over the Fourth of July that in past years has cost me $450.

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Auctions are "a way for a hotel to fill rooms without putting a very discounted rate on its Web site," says McDavitt, which may be why LuxuryLink.com has seen a 23 percent increase year to year in the number of properties that are offering packages—either for auction or at a fixed price—on the site. Hotels have been reducing blackout dates, she says, adding that they probably won't have blackout dates this summer. If you're headed to a city where any number of hotels would do, consider Priceline or HotWire. Savvy Priceline shoppers have been reporting winning bids of 50 to 60 percent off retail rates for four-star and three-star chain hotels in big U.S. cities.

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Unlike luxury hotels—which avoid discounting rates for fear they won't be able to raise them again—some all-inclusives are lowering prices by huge percentage points. In the Caribbean, Sandals and Beaches resorts have been slicing 55 percent off their rates—and that was during high season! McDavitt adds that LuxuryLink.com has seen a 53 percent increase in the number of all-inclusive properties offering packages at auction within the past year.

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All-inclusive cruises are another way to experience the Caribbean on a budget.

Travelers who book through the right safari specialist—one who has negotiated exclusive, confidential rates with lodges—can save 30 to 40 percent in South Africa and 25 to 30 percent in East Africa. At press time, Nina Wennersten of Hippo Creek Safaris had just booked clients a seven-night trip to Kenya, in small four-star camps and lodges, for $4,000 per person, including airfare. Cherri Briggs of Explore booked a ten-night trip to Zambia—at the top owner-run lodges—for $3,400 per person.

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"As we go into the summer," says Leisman, "I think we'll start to see three-digit fares that are comparable to fares to London or Paris," due to increased airline service from the United States. And once you land in Australia or New Zealand, your dollar of course goes 30 percent further than it did last year.

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Travel companies have been unveiling their biggest discounts at the last minute. "The smart consumer with flexible travel dates who doggedly checks prices online will be rewarded," says Berman. One way for travelers to get a sense of the last-minute hotel deals available in a city is to do a "dateless search" on Orbitz. If you type your destination in without typing in a date, you'll get results that show the lowest prices at available hotels within the next 30 days.

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It's relatively easy these days to get a free domestic plane ticket in exchange for only 25,000 miles (as opposed to 50,000). Condé Nast Traveler readers are even reporting success with that holy grail of point redemption: free tickets to Hawaii. However, it's important not to waste miles by using them for tickets that would otherwise be cheap. "Don't cash in an award that pays you less than a penny per mile," advises Brancatelli. "Try to get at least two cents per mile."

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