Holidays have become dirt cheap – but only if you book them right

Amid all the budget and interest rate outrage, the oil and economic uncertainty, and Delta Goodrem only coming fourth in Eurovision, you may have missed a big (and getting bigger) positive.

It’s been getting cheaper and cheaper to travel.

Sure, you might expect to bag a bargain to anywhere near the war zone right now, but I’m talking many more places than that. What’s more, it’s possible to work the system and the new ways to book to engineer an experience that is way cheaper than it previously would have been.

Here are the three steps I am using.

Step 1: Collect frequent flyer points with your every purchase. Firstly, know that I have just booked my children and I to fly return to Vancouver, Canada, for less than $600 in taxes.

Again. In fact, I haven’t paid for an international ticket in more than a decade. Yet everywhere I look, I see people forgoing the opportunity to earn reward points.

The silver lining of our cash rate going up three times this year is that the Australian dollar has also surged.

You’ll probably know that FlyBuys (Coles) is the shopping scheme hooked to Velocity and Everyday Rewards (Woolworths) is the Qantas companion. And you may look out for boosted points deals across different products and across all the affiliate merchants, too. Qantas collectors can also get points at BP service stations and at Red Energy.

But one of the best ways to maximise your points haul is to pre-purchase gift cards for spending you need to make at all sorts of other outlets and products, when on big bonus point deals. You can do this through the mentioned programs or on Qantas Shopping.

For instance, I just snared 20 times points on Apple gift cards to replace a dying phone. A $1000 spend (broken into two $500 cards) netted me 20,000 points. Note, you can use up to eight gift cards per purchase on Apple. You can also use cards for subscriptions – just redeem them to your Apple account to automatically cover your recurring charges.

And a hack to stack the points earned anywhere is to pay for everything with a rewards credit card (which also comes, for now, with bulk sign-up points).

Then there are all the products and services that are in the Qantas ecosystem itself – Qantas Money, Qantas Health and multiple other insurance offerings. Just be sure, factoring in the points value, that those products are still competitive.

Step 2: Redeem points to the right places. The silver lining of our cash rate going up three times this year – so far – is that the Australian dollar has surged against many other currencies. (The reason, in a nutshell, is the world’s investors seeking the highest returns.)

Our exchange rate against the Japanese yen is the best it has been in four decades, at 114 yen to the dollar as I type, making Japan excellent value for travellers. New Zealand is cheaper than it’s been in a decade – one Aussie dollar buys $NZ1.22.

And Vietnam, Sri Lanka and Indonesia have also become far better value. So set your travelling sights somewhere on sale. Then, snare the seats.

You might be able to get a good deal or frequent flyers might work – but they’re not going to just fall into your lap.

To fly on points, you will probably need to be flexible on dates (and maybe consider travelling outside school holidays). And, in the case of Qantas Classic Rewards, it helps to set your alarm to book on seats’ original 363-day-out release date.

However, Qantas does drop seats closer to departure nowadays, and higher-status members will have access to more (and they can sometimes even request seats to be opened up).

Also try alternative routes – maybe with a cheap domestic connection to get there – if your ideal itinerary isn’t available.

Step 3: Buy your accommodation on a cashback platform. The holiday savings start to beautifully compound if you then purchase your accommodation – also in advance – via a cashback platform.

These sound too good to be true but they are, in fact, the real deal. They are simply intermediary platforms that hook merchants up with customers, with the incentive of a slice of your money back: they bring business to the merchants.

Platforms include Shopback, TopCashback and Aura, and banks are getting in on the action, too.

Most will have deals with hundreds if not thousands of product or service providers to give you an option to transact, and receive money back, on virtually everything. (Note here that if you pay with a gift card, you will usually void the cash back – but you can still pay with a rewards credit card and earn points that way.)

Often, you will need to wait, say, 90 days for the cashback to hit your account, to ensure you don’t get a refund on the transaction or cancel the purchase.

Here’s the thing, though: Many platforms feature the big hotel booking websites and with accommodation representing such a large expense, the cash back can be huge. I always make sure the accommodation is on a discount, too, so there are two levels of savings.

What could you get back? Let’s say you spend $4000 on your family’s stay and bide your time to buy when there is a boosted 15 per cent cash back offer (I always do) – that’s $600 cash back.

Convert that into your destination currency at a favourable rate and voilà: there’s a chunk of your holiday spending money!

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at nicolessmartmoney.com. Follow her on Facebook, X and Instagram.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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