Package holidays vs direct bookings: the pros and cons

30 August 2016

Package deal or do it yourself? Saga assesses the best and worst of both booking methods to help you make up your mind…



Package deals

What are they?

Package holidays are usually all-in-one deals with flights, transfers, accommodation and sometimes food included. During the 1970s package holidays enabled millions of Britons to holiday abroad, but the advent of no-frills flights and holiday comparison websites saw their popularity wane in the early 21st-century. 

However, in recent years package holidays have seen a resurgence, largely thanks to travellers seeking greater financial security (package holidays are generally protected by Atol – see more below) after the collapse of several high-profile holiday companies, not to mention the penchant of budget airlines to slap hidden costs such as baggage fees onto fares. 

According to the Association of British Travel Agents (ABTA), they still remain the most popular type of booking, with 46 per cent of holidaymakers opting for a package deal each year.  

The pros

  • Cost - Because many operators have struck deals with airlines and hoteliers, package holidays tend to be cheaper than arranging a similar booking yourself. As flights, accommodation and maybe meals/transport are paid upfront, prices are more transparent from the outset, allowing people to budget more effectively during their trip.
  • Better protection - By law, package holidays sold through UK travel companies are required to be protected underneath the government-backed Atol scheme. This means that if your travel company goes bust or your airline fails, you will be refunded if you are yet to travel, and entitled to hotel costs/flights home if you are already abroad. Always ask before you book whether a holiday is Atol-protected – when Lowcostholidays went into administration last July [2016], 140,000 holidaymakers found they had negligible protection because it was registered in Spain (and therefore exempt from Atol requirements).
  • Lack of stress - Package holidays remove much of the burden and computer rage that comes with planning a holiday and trawling through hundreds of price comparison websites.
  • For skiing and other wintersports holidays, package deals are usually better value because tour operators usually run their own accommodation in the mountains, have negotiated special rates, with lift passes and equipment hire often included in the package too.
  • Families - Package holidays are often better for those travelling with children, with many tour operators organising kids’ activities and playgrounds. 
  • For solo travellers - Booking a package deal may be advantageous as many companies offer reduced-price or omit singles’ supplements.
  • Package resorts usually have a tour operator representative on the ground dealing with requests, excursions or emergencies.
  • Package holidays once meant a fortnight in Benidorm being herded around by a loudmouthed clipboard-wielding rep. But  over the past five years, they’ve evolved to offer boutique hotel stays in upscale destinations. Brand such as and Saga Holidays and Thomas Cook’s new ‘bohemian’ lifestyle brand, Casa Cook, offers a range of adults-only getaways and boutique resorts/hotels. 
  • Some companies allow you to customise your own package such as Saga, which gives customers the option to dispense with frills such as all-inclusive bars and full-board meals 
  • Package holidays don’t just cater to the sunlounger crowd either – there are package holidays for music festivals, backpackers or specialist activities such as cycling.  

Related: Discover Saga's extensive range of holidays and cruises exclusively for the over 50's

Cons

  • Travel agents have agreements with big tourism operators, meaning commission-hungry employees will promote their tours over other options.  This could result in you being cajoled into buying the first holiday they suggest, which you may later end up detesting. Always check comparison sites such as Expedia, TravelSupermarket or Ice Lolly to see if you can get a better deal yourself. 
  • Package holidays often mean compromising. Although you may be happy with the hotel and destination, you may be less chuffed with the full-board meal plan that requires you to dine in the bland hotel restaurant every night rather than the charming Greek taverna down the road.
  • Package holidays are best suited for breaks of standard length (usually a week or a fortnight).  If you want to go away for a more irregular period of time, such as nine or 17 days, tour operators may not be able to help you.
  • On some agency/package websites, details such as room categories, breakfast and local taxes can be nebulous, with terms and conditions varying too.
  • Timings of flights can be inconvenient – sometimes at 4am – meaning you may have to stay near Heathrow, Gatwick or Manchester airport overnight.

Related: Find a range of airport hotels and parking with Holiday Extras.

Direct bookings/DIY bookings

What are they?

The boom in budget airlines and last-minute websites in the early 21st-century meant that package holidays fell out of fashion, with holidaymakers giving travel agents the cold-shoulder by booking their own breaks. 

Indeed, in a Travelex survey earlier this year, 85 per cent of those questioned said they preferred the freedom of planning their own trips abroad. But does it always pay to cut out the middleman? And do DIY bookings offer the same security as package holidays?

Pros

  • Freedom - Do-it-yourself holidays allow travellers to stay in whatever hotel they want, dine in whatever restaurant they choose, plus give a better choice of flight times. If you intend to go away for an extended trip or unusual period that doesn’t neatly dovetail into the fortnight/week duration of many package breaks, you’re better off booking independently. They also work better for city breaks and multi-stop holidays or if you’re planning on journeying to a less well-trodden destination.
  • Lower commission - Independent travellers don’t have to pay the tour operator’s stipend. They can also save money by booking directly through hotel/airline websites rather than through a booking engine or agency, whose commissions can result in you overpaying by over 10 per cent. Research by IHG Rewards Club earlier this year found travellers waste a collective £20m a year by using hotel comparison sites rather than booking direct. Also, by booking direct through hotel/airline websites, you can be showered with incentives such as signing up for customer loyalty schemes, room upgrades, complimentary spa treatments, free breakfasts, air miles or hotel chain loyalty points.
  • Some package deals include add-ons such as chauffeured transfers, airport parking or all-inclusive bars, which you might not need and are always cheaper if booked independently.
  • Booking holidays yourself means can take advantage of money-saving travel hacks, such as snagging cheaper flights by enabling private browsing (travel sites often track visits and can increase prices based on search history) and taking advantage of last-minute hotel deals.
  • The rigidity of package holidays means they can dampen much of the spontaneity that makes travel so much fun.

Related: Discover Saga's flexible holiday collection

Cons

  • The costs - Having forked out for restaurant meals, taxis and excursions during their fortnight in the sun, holidaymakers are often crestfallen by the size of their credit card bill when they get home. 
  • Many booking sites offer you the chance to reserve a hotel room, but payment is only taken when you check into the accommodation. This can be problematic as rates fluctuate and could even increase by the time you take your holiday.
  • Lack of protection - If you book your journey direct with the airline, or your accommodation through a villa company, you won’t be protected underneath the Atol scheme (see above). This could leave you stranded and/or powerless if the airline/accommodation goes bust. However, if you book your flight and hotel or car hire together (or within 24 hours) from the same travel website, it should be Atol-protected, just like traditional package holidays. Regardless of your booking methods, make sure your insurance includes airline and end-supplier failure cover which should protect you if your airline or hotel/villa company goes out of business.
The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.