How to plan your holiday airfare strategies

When it comes to planning your holiday travel, sooner is better. Or is it?

For example, if you’re flying home for Christmas, you’ll need to book tickets anywhere from 14 to 20 days in advance, in order to find the lowest airfare, according to advance booking data from Expedia. On the other hand, if you’re looking for a low fare for Thanksgiving, you missed your window—it ended Sept. 23. Sorry, flights are now up to 15 percent more expensive.

This holiday season, timing will be more important than ever. Wait too long and you could be stuck with a higher price. Book too early, and you’ll miss the best rates.

Take Lori Grube, who started planning her Thanksgiving trip to Hawaii a year ago. No kidding.

Grube, a law enforcement dispatcher in Gaines, N.Y., began tracking airfares and researching alternate airports in order to get the best fare to Honolulu. She determined that a 2 1/2-hour drive to Toronto could save her a bundle on airfare and that the best airline would be United. She downloaded the airline’s app and checked it obsessively for the best prices.

“The prices fluctuated quite a bit and when there was a price I felt was good, my husband didn’t think it was good enough,” she recalls. “So I forged ahead.”

Finally, she booked her tickets nine months before her vacation. Her price for two first-class seats to the Aloha State: $2,258. Not bad.

Here’s why booking early is usually a sound strategy: Airfares are generally headed higher, thanks to rising fuel prices, says Mahmood Khan who directs Virginia Tech’s hospitality and tourism management program. “Air travel will be costlier and early reservations are needed,” he says.

Hotels will also offer early discounts, but watch out for “gotchas.” Hotels will offer more pre-payment options, which means that in exchange for a modest discount, your room is totally nonrefundable. If your holiday plans change, that could cost you dearly.

But zigging when everyone else zags can sometimes also pay. An airfare analysis by Yapta.com found that, on average, air ticket prices sometimes drop closer to the departure date. Its data shows that 29% of airlines’ price drops occur 21 days or more in advance, dropping to 16% in the 15- to 21-day advance purchase time frame, followed by an increase to 27% 8 to 14 days prior to departure. Then prices drop again within one week of departure, as 29% of airline price decreases happen within this window.

Yapta also evaluated advanced booking volatility for hotel rates and found that rates drop consistently the closer to check-in, falling from an average of $242 per night to $228 per night, at an average net savings of $33 to $37 per night.

“Most price drops occur between seven days prior to arrival and check-in,” says Yapta spokesman Jeff Pecor. “At 30 days out, less than 1% of hotel bookings have a price drop, meaning the prices are stable.”

Although hotels may offer early discounts, make sure your holiday plans do not change or you can never have your refund.  (Source)

Travel experts say you can play the system by making your reservations early, as Grube did, or by changing your destination. Instead of visiting family, take the week and go abroad.

“Prices from many U.S. cities to European destinations remain competitive,” says Jessica Bisesto, who watches airfares for the travel site TravelPirates. “The U.S. dollar is strong against the euro these days, which makes travel throughout Europe more affordable than ever.”

If you don’t like those choices — book way in advance or go somewhere you’ve never been — then there’s a third option (besides staying home, of course). You can call the industry’s bluff and wait.

According to booking data compiled by StudentUniverse, a travel site that caters to cost-conscious college students, no one wants to fly on the Tuesday of Thanksgiving week. “If you fly then, you can save a considerable amount of the ticket cost. So can flying home on Thanksgiving morning,” says Danielle Dougan, a spokeswoman for StudentUniverse (this, of course, assumes you can convince your family to eat on Wednesday).

Does it ever feel like for these periods of peak demand — Thanksgiving, Christmas and New Years — that the travel industry, and especially airlines, have you over a barrel? Does it seem like you’re playing a game in order to just get a reasonable price?

The answer to both these questions, of course, is “yes.”

If you’re reading this story now, you’ve probably missed all the good deals for Thanksgiving, and maybe the rest of the year. Maybe it’s time to call the travel industry’s bluff (see below). Stay flexible, wait until almost the last minute, when travel companies get desperate to fill seats and hotel rooms. What have you got to lose?

Look for the “secret” cheap days.

The day of Thanksgiving, Christmas and New Years tend to be quieter and cheaper for airline tickets. A little flexibility can save you a lot of money.

Want a whole week? Try “dead week”—the first week of the year.

It’s typically the quietest week of the year and you can find great prices on tickets and accommodations.

Be opportunistic.

Many Caribbean destinations, struggling to recover from a wave of hurricanes, are expected to start discounting. Even places that aren’t affected, but are in the same region, might lower prices. And don’t feel guilty, these economies depend on tourism.

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DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.