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Sunday, 10 March 2013

6 Myths about travel spending that cost you money this Valentine’s Day


Plenty of so-called conventional wisdom isn’t really wisdom, especially when it comes to travel spending.

The myth: Book your plane ticket as far ahead as possible.
The fact: The conventional wisdom that the early bird gets the worm was debunked last year when Airlines Reporting Corp. studied $82 billion worth of bookings and found that the sweet spot for prices is six weeks before the flight, when airlines start dangling deals to fill empty seats. In 2011, the study found that tickets were about 6% cheaper during this time frame, and the discount has been even higher in previous years. A more recent study published last week by CheapAir.com turned up similar results; it found that booking seven weeks out will let you score the best deals on airfare.
The myth: You need the extra insurance on your car rental.
The fact: The associate at the rental-car counter will probably recommend — if not outright push you to get — the supplementary insurance for damage, theft or liability in the case of an accident. Don’t let the hard sell fool you, because there’s a good chance you already have this coverage. Many car insurance policies cover rentals, but the details vary, so it is a good idea to contact your insurance company before your trip just to be sure.
The myth: You’ll get a better exchange rate overseas by paying in dollars.
The Fact: Having a merchant in another country convert your purchase price from local currency into dollars won’t let you avoid a foreign transaction fee. On top of that, you’ll probably lose money on the exchange thanks to a practice called dynamic currency conversion. In general, the rule of thumb is that it’s smartest to use credit cards when traveling overseas. Some cards offer purchase protection if an item breaks or isn’t delivered as promised and all of them let you dispute a transaction. According to research conducted by CardHub.com, credit cards offer an exchange rate that’s about 8% better than what you’d get at a big American bank, and about 16% better than changing currency at the airport. The big “but” here is to make sure you’re using a card that doesn’t slap on a foreign transaction fee of around 3%; this will cancel out a favorable exchange rate.

The myth: Airfare prices are lowest late Tuesday night.
The Fact: Christopher Elliott, a consumer advocate who focuses primarily on travel, calls it a “persistent myth” that the best airfares can be found after midnight on Tuesday. Sorry, night owls: Two new studies found that you’re not scoring a great deal just because you stayed up late. Researchers at Texas A&M University studied tickets for the same flights bought on different days of the week and found that those bought on the weekend were about 5% less. The study’s authors speculate that the predominance of leisure travel that takes place over the weekends drives this difference. “This conjecture is supported by the finding that the weekend purchase effect is distinctly larger on routes with a mixture of both business and leisure customers than on routes that disproportionately serve leisure customers,” they write.
The myth: The best hotel deals come from third-party sites.
The Fact: A room rate on a third-party booking site might look like a steal, but don’t assume that it is. Call the hotel directly if you find a deal on another site, since a growing number have rate guarantees. According to the New York Times, Starwood Hotels & Resorts, InterContinental Hotels Group, and Wyndham Hotel Group all now offer guarantees that you’ll get the best rate booking through them. Going to the hotel’s site might also turn up packages including other perks, like free parking or a complimentary drink in the lounge that the third-party booking sites don’t have.
The myth: Duty-free is a place to score deals.
The Fact: Perfume, sunglasses, gourmet chocolate — all at rock-bottom prices you can’t get unless you’re killing time in an airport terminal somewhere. That’s the implicit promise of duty-free stores, anyhow — but many offerings aren’t really all that special in terms of the savings. No, you’re not paying the tax you’d pay at a regular store, but duty-free goods sometimes can be priced higher than what you’d pay in a regular store. Esquire magazine did a side-by-side comparison of duty-free prices and found that it’s a mixed bag; there were decent deals on booze and cigarettes. But if you’re not into those vices, you might strike out: cologne and jewelry were cheaper at regular retailers. ”The big fragrance and cosmetics houses make more from duty free and travel retail than from many domestic markets,” research company Hendren Global Group: Top Facts said.

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