Hotel-plus-flight travel packages can help you save money, but may come with inconveniences that can outstrip the initial savings.
Some airlines and holiday websites promise deep discounts on flights and hotel rooms if you book travel packages with them. You may have heard stories of how someone got their hotel stay practically for free this way.
Travel packages that combine flight and hotel bookings (and sometimes, car rentals) provide an attractive alternative to booking your own air tickets and rooms separately. Not only can you get significant savings, booking everything at one go also makes planning your holiday easier and more convenient.
However, there are downsides to buying a travel package which may be inconvenient and cost money. The extras you may need to pay could even outstrip the initial savings.
To avoid having to deal with additional fees and charges, consider the following when deciding whether you should go ahead and book that holiday package.
That Special Package Comes with Restrictions
Airlines and hotels share a similar business model in the sense that unsold inventory actually costs them money. A flight doesn’t stop operating just because there are not enough passengers on board to turn a profit, and neither can a hotel close its doors for the day just because there aren’t any guests.
Because of this, during low-demand seasons, airlines and hotels rather sell their inventory to you at discounted rates, instead of leaving their seats or rooms unoccupied and taking a straight-up loss. This is why they are able to come up with offers that throw in a flight or a room practically for free.
This also means that the attractive prices you see on your travel package come with restrictions on travel dates and hotel locations. Some packages might even come with strict no-refund, no-change policies.
These restrictions may cause problems for certain travellers.
Changing Your Flight Might Cost You
Because of how the package is designed, changing your travel plans might cost you money.
Switching to a different date to fly in or out may cause you to have to pay full price, especially if your new flight dates do not fall within the promotional period. This means that you won’t be able to enjoy any savings.
As if that’s not bad enough, you’ll be charged admin fees for changing your flight itinerary. That’s in addition to topping up your fare to full price. Which means it would have been cheaper if you hadn’t taken up the package in the first place!
You Might Not Get the Hotel You Want
Booking a travel package might save you money at the outset, but you could find yourself having to choose from hotels with less than ideal locations.
As you can imagine, hotels located further from tourist belts or in more inaccessible locations might have problems filling up their rooms. As a way to boost sales, they may include their properties in flight packages.
Granted, booking a flight-and-hotel package doesn’t automatically mean you’ll end up with inferior hotels. This may not be a big deal, especially if it’s your first time visiting and you only need to stay somewhere reasonably accessible.
That being said, be aware that travel packages definitely won’t give you as much freedom as making your own separate bookings. That means you might have to make a detour to hit your favourite late-night supper place.
Travel Packages Could Still be Great
In fairness, the downsides discussed above are conditional. You might not need to change your flight dates, or your changes may be minor enough to still qualify for the discounted rates. (You’ll still need to pay an admin fee for changing your booking through).
Similarly, the location of your hotel might not be of much importance to you, especially if you’re comfortable navigating a new city on your own. You might even relish the opportunity to discover another side of the city, one you may not necessarily find in the popular spots.
If you’re able to lock down your travel dates, and aren’t picky about where you stay, flight-plus-hotel packages might be a great option for you.
However, before you actually make a booking, run a quick test to see how much it would cost if you make separate bookings for the same flight and hotel.
If the cost of your hotel and flight bookings add up to a lower price (perhaps because you chanced upon a flash sale), then obviously you should drop the package and make your bookings separately.
If the cost is on par, weigh carefully whether having more flexibility and transparency is more important than the convenience of booking a package. Afterall, your flight or hotel bookings might offer a refund policy when booked separately.
If the cost is higher, then you’ll know that your travel package is really offering you a good deal. In that case, lock down your travel dates and click on that shopping cart button.
Fly Further With the Right Credit Cards
Whether you decide to get a travel package, or book your plane ticket and hotel room separately, the right air miles credit card can help you go further.
With 1.2 miles per S$1 spent locally, and 2 miles per S$1 spent overseas, the Citi PremierMiles Visa Card is a great way to make your holidays even more rewarding. Besides the good earn rate, new applicants will also receive a welcome gift of up to 42,000 bonus air miles. On top of that, you’ll also receive an NTUC voucher worth S$100 exclusively from SingSaver.com.sg, if you apply before 31 Mar 2017.
If you prefer to use a cashback credit card instead, we suggest trying the Standard Chartered SingPost Platinum Visa Credit Card. You can earn a cool 7% cashback on all online spend, including at airline websites and hotel booking portals. Just charge a minimum of S$600 to your card to qualify.
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By Alevin Chan
A Certified Financial Planner with a curiosity about what makes people tick, Alevin's mission is to help readers understand the psychology of money. He's also on an ongoing quest to optimize happiness and enjoyment in his life.