Traveling can be an expensive past time, especially if you have family, and can only travel at certain times of the year.
You’d be surprised what other factors beyond your control affect the price of your vacation.
The dynamic pricing model employed by the travel industry means budgeting for your trip is more guess work than accurate estimate. For those of you who don’t really know the meaning of “dynamic Pricing”, put simply, it is the basis of “supply and demand”. What does this mean for you, the traveler? Well the more popular a your trip is, the more likely it is you will have to pay more for it.
When we say popular we don’t just mean there are thousands of other travelers planning the same trip as you! No this can be due to many factors, some quite obvious to some not so.
Top factors that effect the price of travel:-
As mentioned many, many factors effect the price you ultimately pay. We as experienced travelers and industry insiders have compiled the below list of the main drivers of price.
1 – Season
We don’t just mean summer or winter! No the travel industry employs its own seasons. These have been defined over time to fit the expected demand for the particular product. They are not standard throughout the industry and each element has it own.
For example flights from the UK to Spain do follow roughly the same seasons of summer/winter, but they also follow the UK school holidays. Meaning that flights in February are on the whole cheaper than Summer, except for 1 week, the school half term. during this 1 week in Feb you can pay as much as the height of summer for your flights.
Top tip – There is no way to escape this, the only counter is plan well in advance and book as early as possible.
2 – Major Events
Another huge driving factor of prices are one off events such as a major sports event, pop concert or trade show.
When one such event is taking place in your destination you can expect both the cost of flights and hotels to sky rocket in line with expected demand. Recently the champions league final was taking place in the Kiev (Ukraine), and hotel rooms that would usually cost $50US a night were selling for closer to a $1000 a night. Now this is an extreme example of a price surge, but it certainly drives home the effect it can have.
Top tip – Sports events and Concerts are easy to google, trade shows not so easy. There are companies that track trade shows around the world .
3 – Popular routes cost more
Demand equals higher price, I think that is perfectly clear by now, but so does popularity.
Popularity can take many effects for what ever reason a destination can become “En Vogue” and every man and his dog wants to visit. This could be due to a recent movie or popular show highlighting the destination. For example after Top Gear’s Vietnam special, demand for holidays to Vietnam went through the roof, as did prices!!
Another consideration to bear in mind, is the route taken. Many major cities have multiple airports, 1 will be less popular than others. Bergamo airport in Milan for example is 40 mins from the center, but so much cheaper to fly to than the main airports (usually less than half price).
Top Tip – Don’t follow the crowds, some destinations will always be popular, but others are just trending. Wait till they go out of fashion in a few years and book then – Nothing will have changed but the price.
4 – When you book
This is not quite as obvious as you’d think. But when you actually confirm your booking has a major impact on the cost you ultimately pay. The main rule of thumb to bear in mind is the earlier the better. If you book the day before you want to fly the cost will be through the roof.
It is also bearing in mind that from time to time airlines do have sales and reduce the cost of certain routes, but there is no way to predict when or what routes. If you wait for a sale you will most likely end up disappointed.
Top tip – Book as early as you can afford. Try getting a new credit card with 12 months interest free to secure your trip and then pay the card off monthly. Bonus with this is the extra benefits of a credit card, such as insurance and purchase protection.
5 – Trip Conditions
Another not so obvious one, the conditions of your trip. When we say conditions we are referring mainly to the rules governing changes and cancellations.
Travel providers love peace of mind, and knowing exactly how many people they have confirmed. This allows them to budget finances and staffing much more accurately.
For this peace of mind they will drop the price for those passengers that will commit to their trip 100%, meaning no changes or cancellations. Where as those who need flexibility will have to pay a premium for the uncertainty. An extreme example – lets look at BA flights London to Madrid in 6 months time, the cheapest restricted ticket (no changes or Cancellations) cost a reasonable £125 return, where as a ticket that allows changes for a fee (but not refunds) costs £165 and a fully flexible (free changes and free cancellations) cost over a staggering £900. That’s a huge increase in price just for flexibility.
Top Tip – Take out travel insurance at the time of booking, this will cover you if you need to cancel for medical or other covered reasons. Insurance is important make sure you properly compare each policy and understand what you are covered for. You do not have to take the agents insurance, so shop around for the policy that’s right for you.
There are many, many more factors that can have an impact, either large or small on your price, but the 5 above have the most consistent and large impact. We know it’s not always possible to avoid them but the more your bear them in mind the less you spend. And that leaves more money to actually enjoy your trip.
Get in touch if your planning a trip and we can advise the best times to book and travel to help with your budget.