Why You Should Be Prepared to Lose a Deposit if You Book Travel Now

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When the world came to a halt due to the COVID-19 pandemic in early 2020, the travel and hospitality industries were among the hardest hit. From airlines to hotels, and all the peripheral industries that benefit from travel, revenues plummeted and businesses scrambled to figure out ways to keep afloat. To keep customers happy, airlines offered vouchers and credits on trips that had to be canceled; hotels dropped their rates to record low prices; and restaurants and bars pivoted to take-out models. If you had a trip booked in 2020 or early 2021, chances were good that you could easily get a refund or a cheaper price if you were forced to cancel.

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With the vaccine rollout gaining momentum every day, life is beginning to open back up in much more significant ways. That means these industries have less motivation to make it easy on consumers to protect their deposits. Not only that, but many of the travel vouchers or credits that airlines offered to customers had restrictive timelines for re-booking that were only in the fine print, according to NBC. This summer, consumers need to book their trips with care so that they don’t lose money. Here are tips and strategies for keeping your deposits safe and travel costs down.

Make Your Money Work for You

Expect More Expensive Rates

In order to recoup serious losses, many businesses within travel and hospitality have been forced to raise their rates. Expect to pay more money for flights, hotels, rental cars and even food, and plan accordingly. According to Investopedia, flights are generally more expensive between July and August, so perhaps try to book flights before or after that window. Hotel prices have been rising steadily since early 2021, as well, and are expected to increase through the summer, according to CNBC. With that in mind, it would be wise to book earlier rather than later. Now’s the time to do a lot of research, comparison shop, and avoid booking travel packages through sites such as Travelocity, as it may be cheaper to book each part of your trip individually.

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Read the Fine Print

Whether you’re booking a flight, an Airbnb, an RV rental or a campsite, don’t assume that your reservation has an easy cancellation policy; always read the fine print. Some businesses have generous refund policies within days of your travel dates, while others require notice spanning months to get all your money back. Certain places may even have non-refundable deposits no matter when you cancel. Just make sure you’re checking all these details before you click “pay.”

Make Your Money Work for You

Buy Travel Insurance

If ever there was a year to buy travel insurance, this one is it, according to Forbes. While travel insurance may not defray all costs, it helps protect against cancellation fees, fees for changing travel dates or travel times and costs associated with baggage loss or delay.

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“As travel resumes and airlines and hotels bring back cancellation or change fees, it’s more crucial than ever to have travel insurance,” Sasha Gainullin, CEO of Battleface, said in a statement. “If 2020 taught us anything, it is that plans can change and that the unexpected does happen.”

Use Miles or Points

If you have airline miles or points, don’t wait to use them — they may make a bigger dent this summer with the higher prices, according to the blog Million Mile Secrets. And if you don’t have a miles-generating credit card or plan, open one immediately to start earning them for future travel.

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Coronavirus Limits May Still Apply

Nobody has declared the pandemic over, so keep in mind that there may still be limits on what you can do on vacation. “Before you book your flights and hotels, make sure that you can do the things you want,” warns travel industry analyst Henry Harteveldt of Atmosphere Research Group. “Do your research first about availability and ticket prices and everything else before you start purchasing,” he told The Washington Post. “You don’t want to be stuck spending a lot of money only to find that something isn’t available or is going to be far more expensive than you thought.”

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Last updated: May 19, 2021

About the Author

Jordan Rosenfeld is a freelance writer and author of nine books. She holds a B.A. from Sonoma State University and an MFA from Bennington College. Her articles and essays about finances and other topics has appeared in a wide range of publications and clients, including The Atlantic, The Billfold, Good Magazine, GoBanking Rates, Daily Worth, Quartz, Medical Economics, The New York Times, Ozy, Paypal, The Washington Post and for numerous business clients. As someone who had to learn many of her lessons about money the hard way, she enjoys writing about personal finance to empower and educate people on how to make the most of what they have and live a better quality of life.

 

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