Travel Budgeting – II

PART-II Smart Planning

In our previous blog I shared how we take advantage of the credit card system to pay the price for most of our flights. In this blog I will be sharing information on websites that we use for booking, tips to save money during the trip and financial planning in general to make travel a reality.

How much do we save per vacation ?

I am picking one of the exotic places to show greater savings impact, but every place we go to is not as exotic or expensive. The average cost (please correct me if wrong) for a week of beach side vacation to Maui, Hawaii from Texas would be 7000-8000 USD for 2 people. Our Total was 3400 with beach side stay, helicopter rides, snorkel tours and a very expensive dinner/entertainment experience at Old Lahaina Luau. Let us see how we made this possible.

Plan Early

I cannot stress enough on this but the single biggest reason why most people spend a lot of money on their vacation is because they plan very late. Booking early gives you the benefit of more options, cheaper prices, better flight timings, better stays, activity bookings that are restricted. I see so many people booking hotels on the fly or a few weeks before the vacation and I want to tell them how stupid it is financially. During our first trip to Arizona on a long weekend, we had to take a detour because of flat tire in the middle of Grand Canyon desert. This flat tire costed us on the fly hotel room booking for 400$ a night which otherwise would have been less than 100$. This was one of our initial trips when we didn’t have Chase Sapphire reserve to take care of trip interruption. Though we didn’t have an option that night, we learned a valuable lesson – Book in advance!

How early should I plan the vacation ?

I would recommend nothing less than 2 months, yes you heard it right. We typically try to book 3-4 months before our trip (if southwest 4-6) but things always don’t go as expected. This doesn’t require the full trip planning. Also you don’t have to book everything. You need to know the approx number of days, destination and a very vague plan so that you can book the flights, stay and rental car. You can always get back to other things later.

Avoid Peak Holiday Season

While this is not completely in your hands and can depend on your work, your kids holidays and other factors but avoiding peak season can save you tons of money and crowd. Note how I said “avoid peak season” and not “travel off season”. Definitely travel during the season to have that perfect weather, to not miss the whale/dolphin season or to avoid the hurricane but a week before or after the peak week can save you in flights, hotels and literally everything. Not to forget that it gets way over crowded during these weeks. This year we wanted to make a trip to India but unfortunately we had no vacation days left and shutdown week during Christmas was our only chance, but when we looked at prices, it was insane- 1600$ for 1 person round trip. We are now going in March for 620$ per person( 413$ in chase points). This is a little less than our usual 850-900$. Total Savings: 2000$ if paid in cash.

Where do we book our flights from ?

While we check the flight options and prices on multiple websites (2-3) like Momondo.com, expedia or cheapoair, we mostly book through chase travel portal using points. 90% of the times the prices and options are the same on Chase travel website V/S other websites but in rare occasions when other websites are cheaper we go with that. Now that the prices are same, it makes a lot more sense for us to buy in points because we are getting the flight price for x/1.5 price. For example our Hawaii flight to Maui from Austin was 600$ per person but in points we paid only 400$ (effectively a free flight paid in points).

Taking points to next level

Another method that we use is transfer our chase points to southwest for 1:1. Southwest each point is 1.5x the price in value i.e. a 1000$ ticket is 666$ in points. We combine this with southwest companion pass which is 1+1 offer (buy one ticket and your companion flies for free) so effectively we bought 2000$ (1000 x 2 tickets) southwest tickets to Oahu, Hawaii during the peak Dec season for 666$ in points(666$ x 1.5 is actual flight cost per person and 1+ 1 offer). Isn’t this insane! That is a savings of 1350$ USD from just one vacation! Not to forget we earned those points not paid for it! We have done this for 1 full year until the companion pass lasted !!! That literally saved us 1000s of $.

How to get Southwest Companion Pass ?

While we got the companion pass status through a promotional offer by Southwest for rest of the year, this offer may only come once in a while. Other way to attain this status is by accumulating 125000 qualifying points or by flying 100 flights in a calendar year. Applying for southwest credit cards can get you these qualifying points in no time. You will have companion pass status for rest of the year + 1 full next year.

Where do we book rental car from ?

A good majority of the times we use one of these 3 lowest priced websites :

• https://turo.com/
• https://www.costcotravel.com/
• https://www.hotwire.com/

Costco travel usually provides the best price on the conventional renting car market with 1 free additional driver and free cancellation . The additional driver alone costs 14$ per day with crazy airport taxes making it around 17$ per day. That is a 75-85$ additional savings for 5 day vacation apart from 30-35% discount provided by Costco. Its hard for one person to drive everywhere. You are on vacation so let the strain of driving be equally divided. Handing over the keys to someone who is not authorized to drive is a very risky business with no insurance covering the rental car. Its a common misconception that your personal car insurance covers the rental car when you are not an authorized driver, well it does not!! (unless you are the spouse, then you may be) So please avoid this as much as possible.

Hotwire on the other hand doesn’t provide that additional driver benefit but often provides lowest price online. But its important to know that their reservations do not have free cancellation.

Turo is our new favorite. Turo cars are personal cars which are rented out for cheap price. So your personal car insurance and credit cards don’t cover for their rental cars. But the good news is they provide their own insurance and in spite of buying that insurance, the price is still cheaper than conventional renting car companies. For example: we are renting out a convertible for our next trip to Hawaii during the peak of Dec. The price of a full size car without insurance at conventional car companies is 700+, but the same for a convertible with insurance at Turo is 450$. That is a 250$ savings plus a sweet upgrade. If I were to compare apples to apples its $1100 for convertible at standard rental car companies v/s 300 at Turo (excluding insurance for both).

In either case if you are renting a car in US, never book directly with the rental car company. You will pay significantly higher usually in 100s.

You have had a tiring flight and you have finally reached the destination and you are all excited to pick that rental car and get started. This is when the rental car companies take the benefit of your situation and try to squeeze more money from you and so comes:

Do not fall prey to rental car agents at pickup

Rental car agents will try to excite you into upgrading your car for 10$ more per day or scare you into buying their expensive rental car insurance. In reality after exuberant taxation the actual price is something that you never imagined to be but are forced to pay because you agreed to it. If you wanted to drive that better car, make that decision while booking not while picking. 90% of the times the credit card that you use has secondary rental car insurance, plus your personal auto insurance covers for it as well. So DO NOT BUY EXPENSIVE INSURANCE from rental car company and DO NOT UPGRADE at pick up for additional cost. Also depending on the agent you talk to, ask for a free upgrade. It doesn’t cost you anything for asking. We once got a free upgrade in Hawaii from intermediate to convertible for free! Thank you Enterprise!

Revisit your Hotel and car rental reservations for lower prices

Usually the rental car prices and Hotel prices go up as the dates are closer. But many a times a opposite of this is possible as well. When the expected number is much lower rental car companies and hotels pull down their prices to attract more customers. This has happened to us on few occasions mostly with rental car. Most recent one is our resort booking at Playa Del Carmen, Mexico. Initial (3 months before) booking rate 600$ for 2 nights. One week before vacation- 450$ for the same room for 2 nights.

Where do we book our stay ?

90% Airbnb and VRBO, 8% resorts and 2% hotels. Airbnb can save you loads of money – get you more space, kitchen and that beach side location for much affordable price as compared to a hotel. E.g. Hotel rooms in beach side Hawaii cost approx 3000$ for a week(assuming you book early) but the same costed us about 1400$ for a beach side condo in Airbnb. That is huge savings! Plus every place is unique as compared to a hotel room which always looks similar. Also owners provide a list of things to checkout which is more popular among locals. If its not prime time, you can always request the owner to provide some discount on stay. Like i said no harm if rejected. Remember to add the Airbnb offer to your chase card and use their link for booking to get up to 15% back.

Also remember to always book an Airbnb which has good reviews and preferably a super host. We have had few (very few) average to bad experiences with Airbnb but this happens even with hotels/resorts. If you are new to Airbnb and would like to try out, drop us a message or comment with your e-mail id. Because we frequently use Airbnbs, anyone we refer gets 55$ off their first stay/experience.

The stay also depends on the kind of vacation you are interested in. I and my wife we love to try the local cuisine, drive on our own to visit places that are not as much popular, try a hike or snorkel at beach, speak to locals and enjoy the culture they have to offer rather than relax at a luxurious resort. But on our anniversaries we usually try to pamper our self with luxurious resort.

Free hotel stays for time share presentations

All you have to do is attend 2 hour presentations and you get free 2-3 nights stay at decent hotels. They might push you to sell their products but you can quietly deny them. We have used this for 1 night stay at Vancouver Canada, 2 nights stay at Cancun Mexico and 3 nights at Las Vegas Luxor. These guys can be advertising literally anywhere and may be hard to get sometimes. Do understand all the terms and conditions before you sign up for one.

Pricey restaurant is not always the best place to eat

Most of the time local’s favorite/authentic food is very cheap to reasonable price. Its mostly the touristy places that tend to make everything expensive . Try to research a little based on reviews to find the locals favorite, you can even talk to locals or ask the Airbnb owner for suggestions. When you go to a place like Hawaii, even everyday food expenses can add up very quickly. In such places we lookout for $ and $$ restaurants on google and yelp for our everyday food. Only once in our vacation do we actually go for $$$$ restaurant if we feel its worth the money. We also tend to eat self prepared breakfast at Airbnbs to save on money and time.

Pay in local currency

Unless a business is operating in USD, always pay in the home currency of the country you are visiting. This would let the credit card company decide the exchange rate for you rather than the bank of the seller and this makes a difference.

Have a travel credit card

If you are travelling to other countries always have a travel credit card which has no foreign transaction fee. This can save you tons of money from foreign exchange fees and forex conversions. I cannot admire Chase Sapphire Reserve enough for all the benefits it provides like -lounge access, trip delay/interruption and cancellation insurance, baggage insurance,medical insurance, rental auto insurance etc. Ex. A typical lunch or dinner in Mexico costed us about 500 Pesos. The market exchange rate was 1 USD to 19.50 Pesos. When we used our travel credit card we got an exchange rate of 19.45 or higher, no foreign transaction fee or any other fee, not to forget the 3% cash back we earned (which we maximize to 4.5% using reserve card). The same amount if spent in cash (converted either at Foreign exchange or using ATMs in foreign country) probably gets you an exchange rate 18.30 or lower + no cash back+ forex fees (approx 7%).

Lookout for discounts for expensive activities

There is usually a Groupon discount, costco discount or some other discount for expensive activities like helicopter rides, skydiving or that Cirque du Soleil show that you always wanted to watch. It usually takes only one google search to find these offers and its worth it. Ex. When our parents and in-laws came to US, we wanted to end the trip with a show of Cirque Du Soleil- O, one of the popular ones (least discounted) performed over water at Vegas. Good seats for this show were costing us approx 220 USD per person plus taxes. With Costco gift card offer + their own coupon discount for booking early we were able to pull down that price to 120$ per person. That is a saving of 600$ right there for 6 people.

Everything else about Rental Car

Say NO to one day tour and packages

This is more of a personal choice but we always say NO to travel agencies which take you around. When we visited Maui, we had an option to either pick 1 day tour on road to Hana for 150$ per person or drive ourselves. While this is not the perfect example to take (you need to be an expert driver for these roads which include several one way bridges), we chose to drive ourselves all the time because we get to stop at the places which are not commercialized, we can have our own schedule, we get to try local authentic food and also because we like to use that 300$ we saved towards a helicopter ride or scuba dive.

Hope you enjoyed reading this blog and found something useful from it. My last blog is the most crucial of them all on how to manage finances and is independent of geographic location. Appreciate taking your time off to read this.