Why booking vacation packages makes sense

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#1

Travelers are often unaware of the value associated with booking packages vs. a la carte. That’s because it isn’t obvious why standalone flight price + standalone resort price =/= vacation package price. Worst case, these would equal but suppliers view packages as a way to move seats and rooms while not impairing the published rates that they offer in the marketplace.

Imagine that a luxury resort normally charges $500 per person per night. They have a travel period where the property has a lot of vacancy. They could mark down the price to say $250, but this could raise the ire of customers who already booked for $500 and it could reduce the perceived quality of their product. Through packaging, suppliers can offer this same discounted rate without it being apparent where the discount comes from.

Both airlines and resorts do discount well in advance of travel when they are trying to establish a base load factor or occupancy and closer in when they have distressed capacity (i.e. use or sell or lose it). My experience is that in the vast majority of the situations, vacation packages involve a discount from one or both of the major components. Thus you can virtually always count on standalone flight price + standalone resort price > vacation package price.

This article provides a good explanation of these dynamics. IMO, vacation packages are one of the most overlooked bargains in travel.

Vacation packages vs. a la carte