'Tanks-A-Lot' and other ploys to ease pump woes

There is an upside to $4-a-gallon gasoline.

Yes, you heard that correctly.

As the summer driving season gets under way on Memorial Day weekend, hotels, retailers, and even churches are offering prepaid gas cards and mileage discounts. At least one auto company, Chrysler, is offering to lock in the gasoline price over the next three years at $2.99 a gallon for car buyers. And financial entrepreneurs are dreaming up complex schemes to help consumers limit their "pump shock."

"It's brilliant," says Dennis Hoffman, professor of economics at the W.P. Carey School of Business at Arizona State University. "The marketing people have no recourse: They have to play into this."

Indeed, a Rand McNally survey taken at the end of April found that 2 in 3 adults who plan to take a road trip this summer say that rising gasoline prices have changed their travel plans. Many now plan either a shorter amount of time or distance. Ten percent plan to cancel their trip altogether.

"This is the third year of the survey, and in the past, even when gas hit $3 per gallon, there was no significant effect on travel plans," says Laurie Borman, editorial director of Rand McNally, which is based in Chicago. "But this time, gasoline is a lot higher. Probably we have reached that psychological tipping point where you say, 'Oops, this is too high.' "

On Wednesday, gasoline hit another record price for the national average: $3.83 a gallon, according to GasPriceWatch.com, a Dayton, Ohio, firm that tracks prices. In California, the state average hit $3.95 a gallon on Monday, according to the Energy Information Administration. And at many gasoline stations across the United States, the price is already above $4 a gallon.

At the same time, crude-oil prices on the futures market went over $132 on Wednesday morning, another record.

Earlier this month, as gasoline prices rose, many hotels and lodges started seeing a downturn in bookings. That was the case at the Marina Inn at Grande Dunes in Myrtle Beach, S.C. The 220-room resort saw a week of falling numbers in advance bookings. "Even though it wasn't a trend, we decided to be proactive," says Pamela Shelley, director of sales and marketing.

In the Marina Inn's case, that means offering a 10-cent-a-mile rebate, through Labor Day, to any guest staying at least three nights. The credit is deducted from the final room bill, based on a MapQuest mileage calculation from the guest's originating address.

"Based on a three- to six-hour drive, the average rebate could be about $60, which is enough for an SUV to get here and back," says Ms. Shelley.

Marketing departments are finding all sorts of names for the promotions. In the Pocono Mountains of northeastern Pennsylvania, the French Manor calls it the "Tanks-A-Lot" package. In San Diego, the Loews Coronado Bay Resort calls it "Money for Miles."

Even small bed-and-breakfasts see a need to entice travelers. At Casa de Angeles in Tucson, Ariz., Jim and Karen Liessmann are offering 20 percent off for a minimum three-night stay at their desert home. "I could tell on May 1 we needed to do something to encourage business. People have tightened up," Mr. Liessmann says.

It's not just the travel business giving drivers a break. A week ago, Chrysler Corp. started its gasoline offer, which is set to go through July 7. Chrysler will give customers a card linked to a Visa or MasterCard, which will adjust charges to account for the $2.99-a-gallon offer. Chrysler will honor the offer for up to 500 gallons per customer per year, equal to about 12,000 miles of driving. The card can be used for any automobile owned by the customer – not just the newly purchased vehicle.

Chrysler, which is using sophisticated hedging of prices on the futures market, says the promotion is pulling in potential buyers. Sales leads are up 25 percent, and showroom traffic rose as much as 20 percent last weekend, when compared with the weekend before, said Jim Press, president of Chrysler, in a press conference Monday.

"It has clearly resonated with the needs and concerns of our customers," he said.

Some companies are plugging gas cards for Father's Day or as graduation gifts. One of those, RoadCare Plus, which offers vehicle assistance, is offering $40 of free gasoline to individuals who sign up for a $59.95 membership.

"We wanted to do something to help the motoring public, give something back," says David Fleming, CEO of the firm in Pompano Beach, Fla.

One church in Richmond, Va., saw the public's need for a gasoline price break as an opportunity to evangelize. Earlier this month, Bishop Daniel Robertson Jr. of the Mt. Gilead Full Gospel International Ministries decided to give away $10,000 in gasoline and gas cards. Some went to needy organizations, such as a children's hospital. But some fuel was simply given to people who lined up outside the pumps at a Kroger supermarket.

"People were coming out of their houses in their Pj's and with no shoes on to get to the gas station," recalls Tony Whittingham, an elder at the church.

While a mile-long procession of vehicles waited for a turn at the pump, members of the church used the opportunity to spread the message. "When they got there, we talked to them about what Christ can do in your life: It was soft evangelism."