Knowing how to save on a holiday means you can enjoy a memorable trip without putting a serious dent in your wallet. The challenge is knowing where to find the right deals and deciding the best time to go on holiday.
Summer travel costs have climbed sharply in recent months, with ongoing geopolitical tensions in the Middle East disrupting global travel routes to and from the region. According to Expedia, airfares have risen by more than 24% this year, largely due to the spike in fuel prices.
At the same time, widespread delays and cancellations have made travel insurance feel less like an optional extra and more of a safety net to fall back on.
Start your trial of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Start your trial
Sign up for MoneyWeek’s free twice-daily newsletter.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
It’s not all doom and gloom, though. With proper planning (like knowing which countries are safe to visit) and picking the right travel cards, you can enjoy your holiday for less.
Latest Videos FromMoneyWeek
We share some tips and tricks to make your holiday budget go further, without compromising on quality.
Do holiday prices go up the more you search?
No. It’s a popular myth that holiday costs go up the more you search for them online. What actually happens is that the cost of flights and hotels increases as they become more booked up.
However, you may also be seeing dynamic pricing at work, when costs fluctuate based on demand. Sometimes that can work in your favour – meaning you get a lower price if demand is low.
How to save on a holiday
Here are our top ten tips for how to make your money go further when booking a holiday.
1. Find the best time to book your flights
You generally need to book your flights well in advance to benefit from the best prices and seats. For instance, on Skyscanner, a trip from London to Los Angeles might cost you around £500 if booked three months before travel in peak summer. But if you book just 15 days ahead, it could set you back over £650. Read our in-depth guide on the best time to book flights. If you prefer to fly premium, we take a look at how to find cheap business and first-class flights.
2. Opt for all-inclusive packages
All-inclusive packages are worth considering if you want to avoid unexpected costs during your trip and are happy to eat most of your meals in the resort.
Claire Bentley, managing director of British Airways Holidays, says: “All-inclusive holidays are a great option for those looking to manage their holiday budget. Many of our customers want to travel with ease and enjoy their hard-earned rest, particularly in the cocoon of a luxury resort, and an all-inclusive package is often the answer.”
Traditional package holidays tend to offer a financial safety net for travellers in case their trip gets cancelled or they face travel delays. This is because they are protected under the ATOL (Air Travel Organisers' Licensing) scheme or via ABTA, the travel association. You’re also legally covered if you don’t get the holiday you promised – for instance, if any facilities are missing at your hotel.
The same thing can’t be said about DIY packages, where you buy different elements of your trip from the same website.
It’s worth shopping around for the best deals on websites that offer package holidays.
3. Take advantage of points and reward programmes
With loyalty rewards, you can exchange your points for experiences or discounts. Here are some ways you can benefit from your reward programmes and points:
- Collect airline miles: You can save on flights with different points systems, including Avios points and the Virgin Flying Club. Another way to do this is by using an airline miles credit card that offers flight points as a reward.
- Credit card rewards: Holidays can be a great time to spend any credit card reward points that you’ve collected and convert them into vouchers. For example, with an Amex Preferred Rewards Gold Credit Card, you could exchange points you’ve accrued for gift cards. With this card, you’ll also get four free visits to airport lounges each year. You can also transfer the points to Amex loyalty partner programmes like British Airways Executive Club or Emirates Skywards. Learn more about the best cards for travel abroad.
- Loyalty rewards: Utilise elite hotel chain loyalty rewards for free nights, room upgrades, welcome drinks and free breakfast. For example, with Hilton Honors, you can get points towards free nights, continental breakfast, premium WiFi, a fifth night free and all-inclusive spa discounts. If you don’t want a hotel-specific reward, Hotels.comCash is a loyalty programme where you earn £100 every time you reach ten eligible hotel nights (average cost per night should be at least £75). You can either use the cash all at once or spread it across future stays. There’s also a tier programme which unlocks more savings and discounts the higher up you move.
- Supermarket vouchers: You could exchange Tesco Clubcard vouchers for points or money off at P&O Cruises, easyJet flights, LeShuttle or the Virgin Atlantic Flying Club. For example, £5 in Clubcard vouchers will get you £10 to use with P&O Cruises, and £1.50 will be worth 300 Virgin points.
4. Buy travel money in advance
It’s worth shopping around for the best travel money rates. It might not be at the top of your list while organising your holiday, but don’t leave it to the last minute, or you could get stung by high exchange rates at the airport or at your destination.
Laura Evans-Fisk, head of digital and engagement at eurochange, said: “Changing money at the airport is absolutely the least cost-effective way of picking up your holiday money, as rates can be up to 13% higher than they are on the high-street or online. As it’s often a last-minute necessity, customers are forced to convert their cash at whatever rate is offered to them in the airport, whereas on the high street, they have more options.”
5. Use a lounge pass
Busy airports can be an assault on the senses. If you crave some quiet time, see if your credit card includes discounted or free airport lounge access. That way, you can enjoy complimentary food and drinks, charge your devices and start your trip in a more relaxed frame of mind. We look at how to get airport lounge access for less in a separate guide.
Flyers might consider annual memberships to airport lounges like Priority Pass or DragonPass, depending on how frequently you travel. It gives you access to over 1,700 lounges worldwide.
6. Weigh your baggage
If packing light isn’t an option, it’s better to pay for extra luggage in advance, rather than at the airport, as it’s likely to be cheaper. For example, if you fly with BA, travelling with a second bag would cost £65-£80 when booked online, compared to £75-£95 at the airport. With Virgin Atlantic, it costs £200 for oversized checked-in luggage, and £65 if it’s overweight. Check with your airline to see their baggage limits and the charges for going over your allowance.
7. Pick the right travel insurance policy
It’s important to find a good travel insurance policy well ahead of your trip to cover unexpected situations.
Liz Hunter, Money Expert’s commercial director, says: “It’s understandable why many people may think travel insurance is just another unnecessary expense, particularly if you’ve bought a policy in the past and never needed to make a claim.
“However, the protection provided should be seen as reassurance that if you ever fell ill, had an accident or experienced theft or damage to your property when you’re away, you’d be covered from having to pay out of your own pocket… [It] makes travel insurance a no-brainer and should be part of everyone's travel checklist to avoid potentially huge medical bills, loss or damage to your possessions.”
A smart move is to book travel insurance as soon as you book your holiday, as it will cover you if you fall ill, your holiday gets cancelled, or you face any travel delays. We also look at activities your travel insurance might not cover in a separate guide.
8. Pay in local currency with the right card
Some debit cards from high-street banks charge as much as 4.99% in fees for withdrawing cash at ATMs abroad, according to TotallyMoney. So, it may be wise to pay with a card which offers fee-free spending to avoid being stung by foreign exchange fees. Plus, you could potentially rack up points, travel rewards and cashback.
9. Use comparison sites
Price comparison sites are handy for booking holiday packages – they do all the heavy lifting for you, especially if you’re not too fussy about the hotel or flight you want.
Last year, Which? compared 30 hotel and flight comparison sites based on customer score, site functionality, relevance of search results, market coverage, flexible options, competitive rates and cost transparency.
Skyscanner and Google Flights scored the highest, with Skyscanner being the easiest to use for booking flights due to better user experience, customer ratings and useful filters.
Once you’ve set your sights on a hotel, do check the prices on its website as well. Sometimes hotel companies save the best prices for those who book with them directly. Signing up for the hotel’s loyalty rewards will also offer long-term benefits if it’s a chain you use regularly.
Remember, price comparison sites aren’t just for budget packages. You can get member discounts (like saving 15% on hotel bookings with Expedia or Booking.com, which are free to join) and filter search results by the features you want, such as hotels with complimentary breakfast, free parking or free airport shuttles.
10. Compare airport parking options
The last thing you want before your holiday is stress about parking at the airport. While flexibility is key when booking parking, don’t leave it right to the last minute, or you could be out of pocket by more than £450 for a week, according to Money Saving Expert. Here are a few ways you can save on airport parking:
- Check directly on the airport website: It’s traditional, but can be cost-effective. At London Stansted Airport, you can pre-book online and save up to 80% on parking costs.
- Make use of price comparison sites: Sites like FHR, Holiday Extras, Airparks and Airport Parking Shop can save you up to 60%.
- Opt for independent parking providers: With Maple Parking, you can sign up and save 15% on your first booking, or even rearrange your bookings penalty-free.
- Go local: Look for train station car parks near your airport, such as Richmond Station in London, which is close to Heathrow Airport. The car park there is open 24/7 with prices starting from as little as £4 a day.
- Consider hotel packages: These are ideal if you don’t live close to the airport, have an early flight, or don’t want to hunt for a spot. For example, with TravelSupermarket, you will find that a week-long airport parking package at Hilton Heathrow T5 costs around £180. It includes free cancellation, a 24-hour shuttle service, late cover, free WiFi, gym access, spa and dining offers.
All prices and rates are correct at time of publishing.
