The truth about holiday discounts – could a new ruling make it easier to spot the best deal?

How can you tell if a discount is genuine or not? Travel has always been an industry addicted to price-cutting – it has to be, because it deals in what are effectively perishable goods. Once a hotel room, an airline seat or a week’s car hire passes its sell-by date, the potential revenue is gone forever – so last-minute offers have always been a key part of the business. 

And it isn’t just late deals that have fuelled the discount syndrome. Any travel company knows the value of persuading people to book and pay as far in advance as possible. It gains a huge advantage by doing so – it can bank the money, save on marketing and advertising, and plan ahead with complete confidence. Hence all those early-booking incentives when holidays first go on sale.

The problem for the consumer is that the syndrome has now become so ingrained that we expect almost everything we book to be discounted in some way – and we have no fixed prices or reference points by which to navigate. The same thing is happening in many areas of retail, of course, especially online. But in travel – where we tend to be buying a one-off arrangement that we haven’t booked before – it is particularly tricky to work out whether we are being offered good value. 

The concept of a “real” or “base” brochure price, or airfare or room rate has just about disappeared. Everything about holidays is fluid.

But is all this about to change? Last week there was an interesting judgment by the Advertising Standards Authority (ASA) about a complaint against the retail arm of tour operator Thomas Cook. Last November, the complainant had seen a particular holiday advertised on thomascook.com – a 14-night, all-inclusive break in Cuba departing in May 2018. The promotion stated: “Total price was £2,736.00 [crossed through] – Saving today (13 per cent) – £350 – Total price £2,386.00.” He had been monitoring the price for several months, and he decided to challenge whether the saving was real. In other words, was the “original” price (£2,736) a genuine one?

Among other points, Thomas Cook argued – to summarise the ASA report – that the holiday went on sale 17 months in advance of departure and the price was then bound to fluctuate since it was subject to different factors such as promotional offers from their suppliers, exchange rate variations and customer demand. 

Thomas Cook said that in this case the launch price “had been set across a range of combinations for the holiday for departures between Dec 13 2016 and Jan 11 2017”.

No bookings had been taken at the launch price but Thomas Cook argued that this did not mean that the price wasn’t a genuine, retail price. I’m pretty certain that the vast majority of travel companies would have given a similar explanation. However, the ASA upheld the complaint. Its main argument was that that while customers were generally aware that holiday pricing was fluid, they would believe that “by purchasing the holiday at the lower price shown in the ad, the consumer would be making a genuine, meaningful saving against a price that had actually been charged.”

Therefore it concluded that the “savings claim had not been substantiated and was misleading” and ruled that “the ad must not appear again in the form complained of”. It also reported that Thomas Cook was considering ways of making changes “so that the pricing basis of holidays would be clearer to consumers”.

Of course, this doesn’t mean an end to fluid pricing. Operators and agents such as Thomas Cook can still vary the prices of their holidays according to demand or other factors which affect costs. But if they are to respect the ASA ruling, all travel companies will now have to be much more careful about making claims that the new prices represent a discount. 

Personally I think this is a good thing. Of course, discounting can offer excellent value for consumers, but if not done in a thoroughly transparent way, it can also confuse and mislead people. 

So anything which leads to more clarity in holiday pricing has to be a good thing. Whether a single ruling like this will be respected across such a cut-throat industry as travel, and whether the ASA has the resources to keep on top of any breaches, is far from certain, however. 

Key things to consider when booking a package

Holiday discounts

The vast majority of package holiday prices vary according to demand. There may be a notional price, but with traditional sun and sand holidays this is usually set well above the expected selling price.So a “discount” simply becomes a way of seducing you into thinking that you are getter a better deal than you really are. The same is true of “free” added extras. By booking now you will certainly get the best choice of peak season holidays, but when making your decision, ignore the size of the claimed discount and look at the bottom-line price.

Price match promises

These, which promise a refund if you find the same holiday cheaper within a set time after you have booked, sound reassuring – as though the operator really is confident that it is offering the lowest price.But it’s an easy promise to make, since the terms and conditions are normally also extremely limited, and very few people carry on looking for a holiday after they have just bought one.

Low deposits

These are a subtle ploy to tempt the uncertain into booking a holiday. But while they may help if cash is short after Christmas, they should not be seen as something which you could cancel later without taking too much of a loss.The small print on these offers nearly always requires you to pay the full deposit a few weeks later – and the contract will stipulate that this extra money is payable even if you cancel.

Free child places

These generally represent a saving on the child’s air fare and meals, since to qualify for the deal, children will be expected to share their parents’ room. They can be good value, but be very wary of holidays in self-catering apartments. Such “free” places do not count towards room occupancy – so if, as a family of four booking an apartment you opt for a free place for one of your children, the other three in the family will have to pay extra “under-occupancy supplements”.

In some cases this can make your overall holiday price more expensive than if you were to pay an ordinary adult fare for the child. So check both pricing mechanisms before booking.

Five ways to get the best hotel deal online

Stay focussed

Don’t get distracted by anything that attempts to rush you into a booking. Applying some basic maths often helps. For example, if a hotel has 100 rooms, the fact that 20 have been sold on a site in any one day might sound like a lot, but it doesn’t actually suggest that they are selling very fast.

Think price not discount

Always think about the price in isolation, not the discount it supposedly represents. Write it down separately. Are you happy to pay that amount for a hotel of that standard?

Cross-check

Try at least two different booking sites, and then go on to check the hotel’s website to see what price is being offered there. You may find different rooms or other deals.

Be savvy with dates

Take your travel dates into account. If you are staying a Sunday night in low season, for example, you can be confident that there is no need to rush to book. A bank holiday weekend is another matter – you will need to act quickly to get a decent deal.

Sort searches by price

Never trust the order of the first search results presented to you, often on the basis of what the site “recommends” or its “favourites”. They may be skewed by commission rates. Sort instead by price or rating.