How to save big money on travel

24 07 2005

Originaly written Monday, July 04, 2005

Here are a few ways i made my trip cheaper. Hope that they might come in handy for those of you planning a trip away.

+NOTE – this is a post on how to save money traveling and will be boring to those not planning a trip away.

But for those of you thinking about traveling this might help.

Two ways to make travel cheaper here:

1. Cheap round-the-world plane tickets

2. Cheap travel insurance

Disclaimer: Although this is at the time of writing perfectly legal in australia, i take no responsibility for anyone doing any of this and its purely for educational purposes only yada yada yada…

How to get a Round-the-world ticket for about half the price.

Credit for this goes out to Bongers and Owen who came up with the original concept – brilliant guys. I did tweak it a bit for my own trip, to gain an extra 6 free flights 🙂 . This is so good if your planning a trip. Using this idea i made my round-the-world ticket so cheap that the travel agent who sold it to me was actually losing $1800 on selling me the ticket!!! It sounds too good to be true doesn’t it? This is a pretty complex job and requires a bit of research- here’s the background that allows this to work:

Some travel agents have a price match gaurantee. That is they’ll beat any price on a ticket. Flightcentre and Studentflights are two examples. However not all travel agents have access to the same airline carriers and routes. Also rather than buying prepackaged round the world ticket it is possible to create your own using what is called a ‘compositional’ ticket. This is where you buy a series of one-way tickets and string them together.

So i went to a travel agent with access to a large number of airline carriers and destinations, and worked out a compositional flight that took me around the world for a very cheap price (full credit to owen and bongers who’se itenerary i used as a guide). Becaue using compositional fares you can travel with random unknown airlines which are much cheaper, one drawback is you often have to go via these random cities. So in my case i was going to London via Bahrain on Saudi air. Then to spain via brussels on some other airline. And also traveling from London to New York via rejiavik on Iceland air. So basically i then had a cheap flight around the world but with secound-rate airlines and it wen’t at weird times via odd cities. But it was CHEAP $1900 to go round the world. .Then i took the quote to Studentflights and they had to match it. One snag can be getting the quote printed on company letterhead, as many travel agents know that if they do this they can have their prices undercut by other travel agents. However i’m sure anyone resourceful enough to try this can work out a way 😉 I wanted them to match it exactly, that is i told them i wanted to fly to london via bahrain and to madrid via brussels. So they had to fly me to these transit points which they didn’t have cheap access to as well as to the destinations and because they didn’t have access to the cheaper airlines it was going to cost a packet! But they could only charge me a price cheaper than what i had already been quoted. For them to match the itenerary of the flight – it was cheaper for them to give me a roud the world ticket which would cover those destinations. In my case that ticket cost Studentflights $3800, – thats before mark-up and profit. They sell them for more, . So they issued me with the round the world ticket. This ticket is with united airlines which is a good airline. Once they had issued me with the ticket, that is i had paid my deposit and hence they had already made the loss – i was able to change my destinations! That is i was able to change my stop in random places to whereever i wanted to go! Also the round the world ticket has many more included flights than my compositional flight and i was able to add these in to my itenerary. I was also able to get a number of flights in the US which were included in the oneworld ticket. So in short i now have:

Melbourne – London

London-Malaga(spain)

Madrid – London – Dubrovnik (croatia)

Naples (italy) – London

London – Rejavik (iceland) — this was a seperate ticket which cost studentflights $800 alone

rejavik – london-newyork

newyork – miami

miami – New Orleans

New Orleans – San Fransisco

Los Angeles – Honolulu

Honolulu – Melbourne

For $1900

To put that into perspective studentflights currently has a promotion for a return ticket to Rome for $1612. Ie Melboure-Rome-Melbourne.

It takes a bit of research, – just working out the compositional fare can take an hour or two but the rewards can be worth it. Note the key is to design the fare so that the cheapest way for the travel agent to match it is simply to give you a round the world ticket. If you don’t do this then they may simply match your flight to all the random destinations! (which would still be cheaper but nowhere near worth the effort).

How to get cheap travel insurance

The main key to getting cheap travel insurance is simple to understand yet few people do it shop around. That said so many people don’t do this!!! The insurance i ended up getting was half the price of the one i was originally looking at – a saving of $600!!!! It was also a much easier to access and comprehensive policy to boot. If you don’t wanna know how to do this in general then just click on the link below and it will take you to a good insurance policy. If your an aussie thinking about going overseas. If you’ve already bought travel insurance DO NOT go to this link or you’ll be kicking yourself. But if your planning a trip then have a look at this. I don’t wanna say how much cheaper this is (and just as good trust me i’ve done the research) coz it’ll piss off all those people who already have paid for travel insurance. But trust me its alot.

Update 6/7/05 – Note: funny how things pan out… – AFTER writing this article i recieved an email from onecover, offering me a commision for anyone purchasing insurance through the following link: http://www.1cover.com.au/index.html?rafID=40118 . So check em out and compare- but if you are going to buy travel insurance from these guys, then please navigate to their site from the above link. It doesn’t cost any extra and think of it as a free donation to the adventures of Tom :).

However if you want to learn how to do this kinda thing all the time then read on, because this is an excellent case study in the way companies rip off the average consumer and ways to avoid it. Having an understanding of the ways companies sell services was how i was able to save heaps of money in only this instance, may save you money down the track. The trick is to know the way that organisations sell services.. Meh i’m too tired to do a good job of writing this now… might do it later. Heres a real crappy sketch – Basically companies that sell services sell these services to consumers (you) but they also sell them to other companies at wholesale rates which can be heaps cheaper than the price you pay for them. These companies get these cheap prices because they buy in bulk and because it generates more revenue and market share due to different branding. Anyway the re-seller company then sells the product to consumers at the cheaper price + its own mark-up. So it can be cheaper to buy from a re-seller than from the original company. Note that your often (but not always) buying exactly the same service as if you bought from the original wholesaler. I know a bit about this coz when i worked for IBM one of my jobs was to monitor the sales of maintenance services provided by IBM to it’s resellers who in turn sold these services to the public for cheaper than IBM did. Sound like a dumb thing for a company to do? It’s not really – it generates greater revenue and market (I am not going to explain this). So the above company is just an internet company with really low overheads so can sell the service for cheaper, but is still selling exactly the same service as for example RACV (who have heaps of overheads due to advertising,beurocracy etc). The same concept applies to other corperate services such as Life Insurance, Car Insurance but also other services.

Well there ya go – Comments people? – let me know if this helps you guys and especially if you try either of these.
Note: I probably won’t post many more reports like this- not because i won’t be concieving and doing similar things, but because i won’t have enough time to write them down whilst traveling :).

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