Seven money-saving secrets

Travelers are notorious penny-pinchers. If you aren’t the kind of person who spends hours online just to save a few bucks on a hotel room, you’re probably related to someone who does.

That may be one reason why there are few in the business who talk glowingly about their best customers being educated customers. The industry credo is something more along the lines of, “ignorance is bliss.”

There are notable exceptions. Travel agents, for example, spend a lot of time educating their customers about everything from the right place to book a business meeting to the perfect vacation spot. But even they don’t always tell you everything. More on that in a second.

In fact, the travel industry is full of secrets. Knowing them can help you save a lot of money on your next trip. Here are seven of them:

1. You can still wait until the last minute for a deal.

Pick up any travel magazine or turn on your TV, and you’ll see a travel “expert” warning you to book now if you want to still get a good deal on an airline ticket or hotel room. They’ll use big words like “load factors” and “occupancy rates.” Very impressive. But take a closer look at those numbers. Even in the best of times, load factors — a measure of how full a plane is flying — are around 80%. Do the math: that means 20% of the plane is still empty. How about hotels? Analysts get excited when average occupancy rates hit 70%. In other words, close to one-third of the rooms are unoccupied. And what happens with empty seats and rooms? They go on sale, often at the last minute.

2. Your travel agent is taking a commission.

In the mid-1990s, airlines began eliminating travel agency bonuses, and in response, agencies added booking fees to make up the shortfall (the average charge is $27 per airline ticket). By starting to bill customers, agents left their customers with the impression that they were now working exclusively for them, in much the same way as a lawyer, accountant or any other professional does.

But that’s not entirely true. Airlines may no longer pay commissions, but other travel companies, such as hotels, car rental agencies and cruise lines, do pay them, and sometimes generously. So how does this information save you money? Knowing that your agent is being compensated by the other side would make any traveler check the “deal” they’re getting from an agent against the prices they’re being quoted online. If there’s a big discrepancy, maybe there’s a problem.

3. The Internet isn't always the cheapest place to buy travel.

Don't count travel agents out, despite what I just wrote about commissions. Often, a good agent will have access to special deals you can't find on the Internet — in which case the booking fee is well worth the price that you'll pay for your ticket. How can agents score a better price than the Internet? Agencies can have affiliate agreements with a large travel company that negotiates lower rates on their behalf. (Think volume discount.) That's one reason that you should never limit your bargain-hunting to the Internet: because all the deals aren't online. Some of them can even be found in (brace yourself, please) the newspaper. Often, tour operators will advertise ridiculously low fares and package deals in the Sunday travel section.

4. Two roundtrip airline tickets are sometimes cheaper than one.

Airlines use sophisticated computer algorithms to price their tickets — a process called "yield management." Basically, it tries to predict demand for tickets and sets the price accordingly. But it doesn't always work so well. That's why a one-way ticket can cost more than a round-trip ticket (the system thinks you're a big-spending business traveler, and charges more). The solution, as counter-intuitive as it may seem, is to buy two sets of advance-purchase roundtrip tickets, but to use only half of each — a process called "back-to-back" ticketing. The trick works best with a short trip where you aren't staying over a Saturday night (the system thinks you're a big-spending business traveler if you don't stay over a Saturday night, too). Airlines frown on passengers who use this clever strategy, but legal experts I've spoken with say it is perfectly legal.

5. Car rental insurance is usually unnecessary.

When you rent a car, you'll be cautioned about the need to buy an optional collision-damage waiver. You may even be shown a picture of a car that was damaged, and for which the unfortunate rental customer had to pay thousands of dollars because he didn't buy the insurance.

But don't be swayed. Check your car insurance policy. It usually will cover you. If not, then rent with a credit card. Visa, for example, will cover you for most car rentals (but read the fine print carefully). The optional insurance is almost entirely profit to the car rental company, and employees are offered hefty bonuses for engaging in hard-sell tactics. Often, such policies can double the cost of your rental.

6. Where you buy your hotel room matters.

Hotels often have two classification systems for their rooms: the published categories, like standard, suite, ocean view; and the unpublished categories. These are secret, internal ways of tagging a room, ranging from the least desirable (that would be the one between the elevator and the ice machine, over the kitchen and under the disco) to the most desirable (usually, the presidential suite).

A hotel will classify its rooms based on how much you paid for it and where you bought it from. Did you score a cheapo room on a discount travel site? Odds are, you'll end up in the worst room in the house.

Here's how to still save money and get a better room: buy directly from the hotel's Web site. It typically treats its direct-booking customers better than outsiders. Hotels will deny they do this when they're on the record. But off the record, they admit it happens.

7. Flying is cheaper than driving.

As incredibly counterintuitive as it might sound, it's often cheaper to fly than to drive — particularly on longer flights.

How's that? Consider that even when gas prices soar, airfares have remained extremely low by historical standards. The bad news is that airlines can't make any money, because they have to pay sky-high fuel bills. But the good news is it's less expensive to zip across the country on a plane than to fill up your gas-guzzling SUV numerous times, and spend hours and hours on the road. There's no telling how long this will last. Eventually, air fares will have to rise so that airlines can start to cover their expenses (on some routes, notably to Europe, they already have). But until then, leave the car home and head to the airport if you want to save some money.

So what are your favorite travel secrets? Send me an e-mail and I'll include them in a future article.

Christopher Elliott is the author of Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals. Critics have called it "eye-opening" and "inspiring" -- it'll "grab your attention and won't let go." Order your copy now on Amazon, Barnes & Noble or iTunes.

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