Welcome to the Travel Hacking from Scratch Series – a series dedicated to getting those new into Travel Hacking up the curve as quickly as possible. Below is the layout of the series with links back to already published articles.
Today our topic is Weighing Convenience vs Cost – a look into the lengths that people go through to avoid taxes and fees and whether or not it’s worth it.
|The Benefits of Travel Hacking|
|Credit Cards – Which Card and Why|
|Churning Credit Cards|
|US Credit Cards (ITIN)|
|Using Your Points|
|Alternatives to DIY|
|Understanding the Power of Partners|
|Weighing Convenience vs Cost|
|How to Avoid High Taxes and Charges|
|How to Travel Better|
|Why You Need Status|
|Understanding Your Rights|
|Beyond Travel – Financial Freedom|
It’s my belief that a large majority of people that get into this hobby are looking for the best return on investment with their points. The lure of free travel (or at least very cheap travel) is very appealing, especially those that are on the two ends of the spectrum – younger folks that generally have less disposable income and a lot of time, and those that are in retirement that are on fixed incomes, have a lot of time, and a strong desire to travel.
This may be an over-generalization but I think it broadly covers off a couple of big demographics when it comes to people that are very interested in loyalty programs.
Outside of these two groups, there’s a large population that tends to be somewhere on the spectrum of having a decent amount of disposable income and a fixed period of time in which they can travel. This can be because of work commitments or having kids in school. Whatever the case may be, this group, more than any, faces the quandary of whether to prioritize money or time.
This post will hopefully bring to light the possibility of spending more money in taxes and fees to allow for a more convenient vacation.
How We Got Here
I’m going to be using a lot of generalizations in this post because I’m trying to speak broadly. I’m also using my personal experience to shape the discussion because I feel that the path that I am on, is a path that many of you may someday share.
I started out as the poor student that only wanted to travel as much as possible and doing so without the help of miles and points was very difficult because I was living off student loans and menial jobs that didn’t pay a lot.
As a student, I did everything in my power to understand things like which airlines ddon’t charge fuel surcharge, or which credit cards I should sign up for to earn enough miles for my next trip. I spent countless hours on forums, reading posts and reading the terms and conditions of programs so I could better understand how to best stretch my dollar (or in this case miles and points).
Because I had learned how to derive a lot of value from my miles and points, I grew used to the idea that my time was less valuable than the money that I saved.
Ultimately I didn’t mind because I could justify a Calgary (YYC) to Toronto (YYZ) to Montreal (YUL) to Instanbul (IST) travel day because I was in Business Class and I was being pampered along the way. If I’m being truthful, I still don’t mind it but I will feely admit that taking 2 days to get to my destination is less appealing than it used to be, regardless of how luxurious the travel is.
I had grown used to the mantra that “it’s not the destination, it’s the journey” and adopted it to my travel approach, however, in recent times, I have started to see the other side of the equation.
It Just Takes Money
I understand that many may not share this same sentiment but much like many things in the world, if you’re willing to throw money at the problem, it ceases to become a problem.
Let’s say, for example, you wanted to fly from Calgary (YYC) to London (LHR) and you wanted to travel in Business Class.
You have two choices. You can fly with Air Canada and get there pretty easily or you can fly with a lot of Star Alliance partners to the same destination but through a very circuitous routing that takes a significant amount of time.
Option 1 – Direct Flight with AC
If you search for something like Calgary (YYC) to London (LHR), you will pretty easily find award availability … but at a price.
What immediately stands out here are the large taxes and fees associated with getting to London ($589.41) but what you don’t see is that it took all of 30 seconds to find this flight and no knowledge was required around fuel surcharges, taxes, etc. Remember, these taxes are only for a one-way trip from London to Calgary.
There is a certain bliss associated with no having to worry about anything except availability. Additionally, if you compare the taxes and fees to the cash value of the ticket, what you are paying in taxes is relatively minuscule.
What’s interesting here is that the taxes and fees from the cash price of the ticket ($547.41) are virtually identical to the ones you would pay for the award ticket ($589.41).
Note the travel time of 8:45 for this direct route as we look into what an award flight might look like.
Option 2 – Circuitous Routing to Save Taxes and Fees
For those that want to travel around the same time but want to save money on taxes and fees, you’ll be in for quite the trip. Because of the nature of the trip and the limitations of the Aeroplan booking engine, I cannot show you the results through Aeroplan screenshots but I can show you what I pieced together.
As you can see, it’s quite a lot of travel. The total time you would be traveling would be 30:45 and while some would argue that you could meet up with some friends in Vancouver (YVR), explore Los Angeles and enjoy quite a lot of time in Swiss (LX) and Lufthansa (LH) Business Class, to me, this is a very unattractive itinerary.
Unfortunately, I cannot tell you what the taxes and fees would be without calling into Aeroplan for a manual calculation (which currently takes forever). Based on experience, I would presume that the taxes would be in and around $200-$250. Another word of caution with these types of flights – when you land at a lot of airports, you are still on the hook to pay the airport taxes, which can quickly add up.
While you could certainly find a better route such as Calgary (YYC) to Los Angeles (LAX) to Zurich (ZRH) to London (LHR), I didn’t want to spend 2+ hours finding the perfect itinerary for a hypothetical trip.
To find this itinerary, it took me about 20-25 minutes using tools like Award.Flights but for those that aren’t familiar with Alliances and routings, this would be a much more challenging task.
Both routings will get you where you want to go but the direct flight is significantly more attractive in terms of travel time but a little less attractive in terms of cash outlay.
What’s the Answer?
The crux of knowing which is better for you is that you have to understand how to properly conduct an award search so you know what options are available to you and what the taxes and fees are. Only then can you truly understand what your best option is.
With an award search, there are two time factors you need to consider:
- The time it takes to conduct the search (including the time required to learn the skill)
- The total travel time
I’m still at the stage of my travel life that I am still interested in trying out new products and experiencing the luxury associated with premium award travel but, to be honest, I’m getting to the point where I’m favoring more direct flights even if it means paying more in taxes and fees.
I can tell you quite honestly that my wife shakes her head when I tell her things like “we have 8 hours in Cairo so we’re going to get out to the pyramids, look around, and head back to the airport”. She will ask me why we are even going to Cairo if that’s the case, and my answer inevitably is that we need to go to Cairo in order to get to Istanbul and we need to get to Istanbul to fly the new Turkish Airlines 787.
I may have played that card too many times.
Ultimately the decision is yours as to whether you just bite the bullet and pay the taxes and fees associated with a direct flight (especially on Air Canada) or try to piece together an itinerary that values money over time and effort.
In either case, one should not dismiss either option when it comes to finding the right solution. It has become too easy in our hobby to simply search for the non-YQ routing without even considering the more expensive but direct routing and in the long run, that attitude may have a detrimental effect on how much you love and embrace this hobby.