One Way or the Other, You’re Paying for a Vacation Membership — Even if You Don’t Use One!

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When selecting a travel program to use, be it an online booking engine or a vacation membership program, it helps to know where you’re spending your money to get the best value for your travel style.

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I call the hotel-focused online booking engines the Big 4. They are:

  1. Hotels.com
  2. Orbitz
  3. Expedia
  4. Travelocity
  • Priceline is of course one of the big players, but with its customer bidding structure, it operates a little differently, so we’re zeroing in on the others for this discussion.

These travel sites are all primarily discount hotel based booking services. They work similarly by working with various hotel venues to ensure rooms are filled, but at a discounted rate, which they agree to cover. They make their commissions from booking fees and an up-charge percentage, which still offers end-users a discounted hotel stay under normally published hotel rates.

Visitors to these sites are not charged a membership fee up front to access the hotel savings. Yet that’s essentially what visitors wind up doing — in addition to booking fees. The best value is offered, therefore, to those who do not travel often and who either need to or prefer to stay in hotels (as opposed to other venues such as resorts, pool homes, log homes, etc.) while visiting their destinations.

The key here is: “do not travel often.” Given there is no upfront access fee, the small up-charge may be worth the difference in cost.

But how often is “often”? Up-charges can be way over 100% of the rates secured by these services. It is in this way they are able to promise you 50% or better savings on your hotel stay and still make a profit. So for purposes of argument, let’s say you want to stay at a hotel that normally costs $200 for the night. You get it via one of the Big 4 for $100. That’s pretty good! But again, for the sake of argument, the room cost the online booking engine (OBE) providers only $50. That leaves the provider with a $50 profit. Per person. Per night. A week-long stay for two people would generate a $700 profit for the OBEs. Plus booking fees.

A fair exchange, you say. It made them $50 (per person, per night), but I saved $100 per person, per night. Yes, that is a good deal. Until you do this enough times to pay for a membership that provides you either the same or better hotel discount, not to mention other significant travel venue discounts. So how many times is that? Well, it depends on the membership. Some memberships cost about $3,000. Some $2,000. Some 1,000. And some less.

Let’s look at this using the same $50 profit per/* example:

For the $3,000 membership, you’d need to stay only 60 nights (30 nights for two people) to cover the service fee incurred by the online booking agency. Naturally, if over a period of years, you plan on traveling alone and you do not plan on staying overnight for 60+ nights, this membership would not be worth the investment.

But the above example is only using only one travel style for one hotel cost. Naturally, as a traveler you will likely visit more than one hotel for more than one night at more than one rate during your lifetime. And you will likely not be traveling alone each time.

For the $2,000 membership, you’d need to take only 50 nights to cover your expense (25 nights for two people)

And for the $1,000 membership, you’d need to take only 20 (10 nights for two people).

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Getting a personal, real-life perspective:

happytravelgirlBy age 16, I had visited Cabo San Lucas, Baja, CA for two weeks (13 nights) and Grand Cayman, BWI for two weeks (another 13 nights).

happytravelgirlBy age 20, I had added a second trip to Grand Cayman, BWI and one to Bonaire, Dutch Antilles (13 nights)..

Byhappytravelgirl age 30, add on a week’s visit to Jamaica, one to Honduras, a SCUBA cruise in the Caribbean, a 3-day jaunt to Cozumel and more than a couple cross-country tours that expanded a period of months, not weeks. (OK, I give up counting nights.)

happytravelgirlBy age 40, add a week-long California touring honeymoon, a 3-day mission trip to Mexico and several weekend and holiday getaways here in the U.S.

happytravelgirlBy age 50, work had taken me to several trade show venues across the country, and I wound up staying in Galveston for about a month during my daughter’s hospitalization.

It’s amazingly easy to rack up those 60 nights! And those discount access costs add up quickly! Remember, for purposes of the above booking engine profit example, that’s $50 (+ or -) per night, per person over age 12. Access for a week-long hotel stay for two people would then = $700 using a “free” online booking engine. And each time another week-long hotel stay is booked at this or a similar venue or rate, the access fee is paid again!

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As you can see, you also need to consider the type of travel you take most often. Hotels may be the first thing you think of for travel accommodations, but they are certainly not the only option! You may wish to take the family on a resort vacation, for example. Or you may wish to take a second honeymoon in Paris. You might even want to cruise the Caribbean Seas. Who knows? Each travel style tacks on one more up-charge, plus commissions to the online booking engines. The point is, if you travel with even modest frequency as I have, you are spending more with “free” online booking engines than the cost of a good vacation membership.

Only you can determine the long term value in the travel programs you select. Just be aware that you’re paying for access to discount programs one way or the other. The question is, which program is best suited to your own travel needs? Click here to find out.

Happy Traveling!

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Filed under: Travel Programs • Value Comparisons

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