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Follow These 8 Steps to Get a Cheaper Vacation

I hate to hear people say “I wish I could travel more.” Most of what you can and can’t do in life is a matter of priorities. If you want to do something badly enough, you’ll find a way to make it a top priority. If you don’t, you’ll find excuses. Besides making travel more important than trips to the mall, however, I do realize it helps a lot if you can find a way to get a cheaper vacation, which is a lot of what this blog is about. 

cheaper vacation this year

For most people, travel is not an everyday habit like shopping for shoes or cooking, so they need an easy step-by-step instruction manual to get moving. There are plenty of ways to travel more on your current income, but if you follow the steps below and really follow through on them, you will have a much cheaper vacation this year, next year, and onward with a nice holiday break here and there mixed in as well for a getaway. You will probably spend less than you do in a week or two at home.

Here’s how to drastically reduce how much you have to budget for your next vacation. 

1) Get an airline credit card

The big U.S. airlines all now award frequent flier miles by the amount of money spent, not the distance flown, which leaves out most leisure travelers. Their focus is clearly on business travelers paying the most money for their flights and doing that over and over again.

The airlines make too much money from affiliated credit cards to give those up though, so you can still earn a lot of miles by using those, especially if you’re part of the U.S. banking system.

I have a whole wallet full of these things and more in a drawer, so you’re not restricted to just one. Start with whichever affiliated credit card is most likely to get used because of who flies to where you live. Otherwise, if you don’t care because you’re in a big city, just get the one with the best sign-up bonus. The points generally range from 30,000 to 50,000 so if you see an offer higher than that, it probably won’t last. Snag it.

The sign-up bonus from an airline credit card is often enough for a domestic round-trip flight at a minimum. It might even get you to Mexico, Canada, or the Caribbean. If you watch for deals and are flexible, the sign-up bonus might get you two flights. I just booked from Leon/Guanajuato, Mexico to New York City for 20,000 points total (plus $130 in taxes) on American. 

Much of the time, Alaska Air and Southwest have the most attractive offers. Both will get you beyond the USA if you want to travel abroad.

Southwest lets you check two bags for free, so they’re a great vacation choice. For the non-Southwest airlines, the saved luggage fees from United and the like will often more than cover the annual fee if there is one. 

That United credit card is the best for shaving luggage costs because you get a free checked bag with every flight, not just domestic ones. That doesn’t do you much good if you’re in a city where Delta or American has a hub, however. So get a card from Delta or AA and at least you’ll get a bag covered on some of your flights, easily offsetting the annual fee. 

American Airlines card from Citi

Delta card from Amex

Southwest card from Chase

If you’ve got a spouse, he/she can get a card and the bonus too. If you run a business, you can often pick up another one in the business name. Each time you get those bonus miles again. 

There are other programs too where card points can go to different airlines or gain points that can be used on any travel period. The best are the Chase Sapphire Preferred, Barclay Arrival Plus, and the Marriott American Express cards. Amex works like this for regular cards (I just have the regular Green one) but the transfer partners are more limited than you have with Chase: basically Delta and JetBlue for domestic options, Air Canada, Aeromexico, Virgin Atlantic, and a few more for ones you could use to fly internationally.

You’ll need to hit a minimum spend level though after signing up for any of these airline cards, usually between $1,000 and $3,000 in three months. So you need to pull it out of your wallet a lot at first. It’s best to time the acquisition with when you know you have a few grand of expenses coming up. The result though is a much cheaper vacation when you’re getting something for free.

 

2) Put all expenses on that airline card for at least three months

If you’ve got some big spending coming up, such as a move to a new house or your car insurance bill, that’s a good time to get one of these new credit cards. Even if you don’t though, put your regular bills on there (cable, phone, car payment, whatever) and you’ll spend what you need in no time.

Make this your go-to card for any online shopping, especially if you can shop through the airline site and get bonus miles on top. If you sign up with the dining program, you can amplify the points when you pick the right restaurants. Especially in the early days when you’re adding to the bonus amount you got, look at every expenditure as a points-earning opportunity and then pay it all off a month later each time.

3) Get a hotel chain credit card and repeat

After you’re close to the minimum spend on the airline card, sign up for a hotel chain one and go through the same process. You’ll switch as much of your regular spending to that card now instead. Ideally, this is a card for a chain where you already stay now and then, but if not I’ve found the one from IHG Group (Intercontinental, Indigo, Holiday Inn Express, Staybridge Suites, Kimpton) requires the least amount of points to get comfortable rooms, especially when they run promotions.

IHG is currently offering a very generous sign-up bonus with Chase that earns you four hotel nights after you meet the minimum spend, with just a $99 annual fee that gives you room upgrades and one free anniversary night when you renew. Highly recommended.

I’ve had good luck with the Hilton one too after getting a huge sign-up bonus from them. Then I did it again by getting their Hilton Surpass card on top. That was a better deal before though: they recently downgraded it substantially, taking away one key benefit (airport lounge visits) and raising the annual fee to $150. So only get it now if you stay with Hilton enough to take advantage of the Gold status and you know you’re going to use the additional points–basically double what you get from the cheaper card. 

I also have the Wyndham card from Barclay’s, which has given me five or six free room nights at this point, plus frequent upgrades. Their redemption system is far simpler than all the others, so you know you’ll be able to use your points easily. The highest tier is 30K points, so get at least one night at a nice hotel if there’s a 30K sign-up bonus. 

Many of these charge an annual fee, but IHG gives you a free night each year (in addition to your points), so it’s a wash at worst. Most give you automatic elite status, which means late checkout and a room available upgrade after check-in. All of these factors can lead to a cheaper vacation that’s also more comfortable.

All the major chains offer affinity cards like this, so if you prefer Marriott, Hyatt, or Choice Hotels, you’ll find one for them as well. Just be advised that they vary greatly in how many stays you’ll get for your points and how easy those points are to redeem. Hyatt is known for being generous, Marriott is definitely not. 

4) Start looking at where you can go on miles

Most people who spend way too much on vacation end up overspending because they plan it backwards. They eliminate most variables, picking a single place to go and a certain week they will travel. They’re now locked in and have no flexibility.

If you can start with what’s available on points and then work back from there, it’s much easier to cash in your frequent flier miles and much easier to get cheap flights when you do have to buy them.

This should be obvious, but if you go where everyone else is going when everyone else is going, the chance of you getting the free tickets you want is slim. I average three or four free flights a year though, at the lowest mileage levels, so it can definitely be done with flexibility.

If you find a match, snag it! Most experts consider a penny a mile to be a fair value. So don’t use 50,000 miles for a $200 flight. Use 50,000 miles for a flight worth at least $500 on the open market. Unfortunately, the only way to find out where you can go with the points you have available is to shop around. Most airlines don’t publish a chart anymore saying you need x number of points to fly to Argentina and back. They change the amount dynamically depending on demand. So maybe it’s 20,000 points one-way in November, but 40,000 in January. 

If you want to fly with a partner airline, you may need to research the options and then phone your airline to see what’s available for the points you have. United’s site makes it really easy to book with Star Alliance partners, but it’s not so easy for American (One World) or Delta (Skyteam). You’ll probably need to set aside some phone time. 

Don’t forget that most airlines will let you book half of a flight (a one-way trip) or do an “open jaw” where you fly into one airport and out of another. You don’t have to book a round trip. In some cases you may not have enough for both legs, but you can buy one with points and one with cash. 

5) If not with miles, pick your destination based on flight deals

find great flight deals for a cheaper vacation this year

If you don’t have enough miles or you’re striking out, don’t worry. There are still hundreds of great airfare deals every week if you keep your options open. Check sites like Airfare Watchdog or follow them on Twitter. Use Google Flights and/or Skyscanner to search from your home airport or sign up for alerts from Going.com (formerly the better-named Scott’s Cheap Flights). And don’t forget about the airlines that don’t feed into those systems, like Allegiant and Southwest. If your airport is served by one of those, it pays to get on their e-mail list to watch for sales. 

Check for foreign airlines coming to the USA too like Volaris from Mexico and Porter Airlines and Westjet from Canada. New options are starting to crop up again for flights across the Atlantic. If you head to the cheap vacation spots, you’ll spend less on the ground when you get there too.

6) Book at least one night with your new hotel points for a cheaper vacation

You should be sitting on a few nights’ worth of hotel points from that second credit card, so cash some of those in to offset a few nights of lodging. This is especially useful if you need to be near an airport for the first or last night. I had two one-night stays in Munich recently before and after a trip to the Czech Republic. I cashed in Hilton points both times: one night near the airport and one in the city center when we arrived back by train. Here was our view: 

hotel loyalty points for a cheaper vacation

Always check the real prices though to see if it’s worth it. Paying 30,000 hotel points for a room that’s going for $68 doesn’t make much sense. The cheaper the country, the less sense it usually makes to cash in points unless you’re going to go for the Intercontinental with your points when you could usually only afford to stay at Holiday Inn Express or worse if you’re paying with real money.

Use that penny a point calculation as an easy rule of thumb because at that level you can be sure it’s worth doing. (If a $400 room is going for 25,000 points, that’s a deal and you should book it. If it takes 25,000 points to book an $80 room, probably not.)

7) Use HotelsCombined and rental sites for the paid nights

In most cases, you can be relatively sure you’re seeing the best price available on the web if you use HotelsCombined or a similar aggregator like Kayak to search for a hotel. Then pay close attention to the ratings before you book, both the overall score and the individual reviews. I especially like to do this on Booking.com because only guests who have stayed there can leave a review (unlike with TripAdvisor) and you can sort by “lowest price and best reviewed.” 

In foreign countries or with independent hotels, you may be able to negotiate a better rate over the phone or by e-mail. They pay the likes of Expedia close to 25% commission and love to avoid that. Planning ahead can actually cost you more in some cases, especially since a lot of budget hotels aren’t even on those sites. 

If you’ll be somewhere for a long time though or you’re a family, renting from Airbnb or Vrbo might be a smarter (and cheaper) option. 

7.5) Or, do a home exchange

Could you stay in someone else’s house while they’re staying in yours? Or does one of you have a vacation home so you could do a non-simultaneous exchange? Many people who belong to home exchange organizations spend very little on vacation. They cash in miles for flights and then stay in a house for nothing after arrival. They’re just paying for some ground transportation, food, and having fun.

I’m excited about a new home swap service I wrote about recently that’s geared to people who still need to get work done at least part of the time. All members have fast internet and some kind of work space, usually with a good chair you can sit in for hours at a time. I’m a member of both of those linked above and have saved thousands of dollars in accommodation costs by doing home exchanges. I just did one last month for a week in Puerto Vallarta! 

Some have also found success without having a home of their own, by housesitting with a service like TrustedHousesitters

8) Go Beyond the Tourist Places After Arrival

This is obvious to seasoned travelers, but sometimes not so obvious to people who only travel for a week or two per year. If you want a cheaper vacation, you can often save a small fortune just by getting out of the tourist zone. This is especially true for the “greatest hits of travel” kinds of places like big European cities and beach resorts. 

Walk for 20 minutes to get into a neighborhood where real people live, for a start. (Unless you’re somewhere like Santorini Island, where every building has been turned into an Airbnb, hotel, or restaurant.) Or if you’re in a city, hop on the metro or a local bus and go several stops. If you’re at a beach resort area, like Playa del Carmen, just walk away from the ocean and keep going. 

Tools like Yelp and Google Maps can be helpful, but many of the best local joints aren’t getting reviews on apps like that. The locals who eat there aren’t using them–just other people like you. So don’t be afraid to put the phone away and wander. Or ask people who make an average salary where to go eat, not the hotel concierge who deals with tourists all day. 

Related post: Eat local, drink local, buy local when you travel on a budget

There are lots of other ways you can play around the margins to get a cheaper vacation next time you travel, but this post is focused on the big expenses. Airfare and lodging are generally going to be your biggest expenses for a vacation of a week or two, no matter where you go. Next after that is food, which can be offset by the advice above and/or by having a kitchen in your rental apartment for at least one meal a day. Keep in mind too that lunch is generally a better value than dinner in most cities, especially in Latin America. 

Ready to get a cheaper vacation now? Follow the steps above and I guarantee you that you will save a small fortune. I’ve seen people pull it off over and over again. Often it’s the people of very average means that travel abroad the most: I meet lots of teachers, bartenders, low-level office workers, and nurses. They’re just smart about how they do it in order to maximize the budget they have to work with. 

See you on the road!