One of the very best ways to save money on your travel arrangements is to buy all of the arrangements together as a package. There are several reasons why it costs less to book everything together. Let’s break it down and look at each of the pieces.
First, let’s look at airfare. Large vacation providers, such as Apple Vacations & Funjet, buy “bulk”, “contracted”, “negotiated”, or “charter” airfare. In exchange for buying large numbers of seats (or the entire plane!), they get a discount. They pass these savings on to you when you purchase a package. Many airlines also have their own offerings of discounted airfare – as long as you buy it in combination with at least one hotel night. US Airways Vacations, Delta Vacations, and Southwest Vacations are just a few examples.
Often, if you purchase a package through a travel agent, in addition to getting the lower airfare, you also can put a reduced deposit on the package and hold your arrangements with a small “down payment”. For example, if you purchase a US Airways Vacations package through a travel agent, the deposit is only $150 per person. That gives you the opportunity to hold your travel arrangements without paying in full.
Now, let’s look at hotel and resort rates. Vacation providers and airlines negotiate discounted rates with the hotels and resorts and hold those rooms to be sold to their own customers. This is known as “blocking” rooms. They purchase a large number (a block) of rooms in advance and hold them in inventory until they are sold. The vacation provider is acting as a wholesaler, and you get the benefit of their discounted pricing. Because these rooms are held by the vacation provider, they are not in the resort’s inventory. This is why sometimes a resort can be “sold out” but rooms may be found through another channel.
Rental cars are also subject to the same wholesale pricing. A rental car can often be reserved as part of a package for a lower rate than if you were to reserve the car separately.
Purchasing everything together allows you to get the best discounts on all the components of your vacation. Booking separately might allow you to get a good rate on one component, but the benefit might be outweighed when you have to pay full price for the other pieces.