A current dilemma among avid travellers is whether to go ahead a book a trip in light of the enormous uncertainty around COVID-19’s continuing impact on the world. Hence, I thought I’d take a look at some of the considerations involved in making tentative plans for travel in 2021.
What’s a “Speculative” Booking?
To borrow from an online dictionary definition, a speculative trip is one based on conjecture rather than knowledge. So, it might happen, it might not.
The act of booking travel speculatively is likely quite familiar to points and miles enthusiasts. For instance, one might do it after some significant news announced by a loyalty program, such as a shuffling of hotel reward categories or a short-lived opportunity to pounce on a super deal.
I’ve made many speculative hotel bookings on points for trips that never materialized, along with a few that did in fact turn into fantastic getaways. With hotel reward reservations, there is very little risk involved in locking in a future stay. You can always just cancel and get all your points back.
You assume more risk when booking airfare however. If you don’t end up taking the trip, you’re typically subject to a cancellation or change fee. The same goes for cruises or vacation packages.
Flexible Cancellation Policies
Many travel companies are now providing relaxed change or cancellation policies to encourage new bookings.
Under the Air Canada “Ready for takeoff” policy, bookings made before December 31, 2020 for travel by December 31, 2021 are eligible for one free change. If you cancel, you’ll receive a travel voucher with no expiry date. Alternatively, you may convert the value of the ticket into Aeroplan miles with a 65% bonus.
Until October 16, 2020, Aeroplan tickets may be cancelled for a full refund of miles along with the taxes and fees. This date has been extended in the past so it’s reasonably likely to be extended again.
For WestJet flights booked before December 31, 2020, there is no fee to change or cancel your flight. The full value of cancelled flights will be put into a Travel Bank valid for 24 months from the date of issue.
Whatever airline or company you book with, be sure to carefully review all of the terms and conditions before making your purchase.
Risk vs. Reward
In addition to the booking terms, there are further pros and cons worth considering.
Although many travel deals may be advertised as risk-free, there are still broader financial perils to keep in mind. The coronavirus pandemic has devastated the travel industry and while many companies will presumably survive intact, it’s not exactly a sure thing. Recall when Thomas Cook went belly up about a year ago. Any time you have your money tied up in a purchase that won’t be realized until well into the future, there is at least a little bit of risk that the business will no longer be afloat when your trip rolls around.
TravelZoo is website that lists vacation deals from a wide variety of companies. Their discounts on resort stays in the Maldives have generated a lot of interest in the Red Flag Deals forum. Note the current offer along with a recently expired one and an earlier one. It was fascinating to see just how many people were eager to buy. Clearly the fully refundable nature of the deal was a huge factor in their decision, but it’s still a lot of money to sink into a voucher.
Aside from the monetary risk, there is of course the psychological risk of getting too keyed up about a trip that may not happen. Normally, booking a trip you view as a long shot might not cause you much distress if it fizzles. But these last several months of depressing news could perhaps lead to more intense disappointment should the trip not come to fruition.
The counterargument is the notion that having a vacation off in the distance to look forward to could produce a much needed boost to your mood today. If it serves as a positive distraction from the gloom of 2020, and as long as you’re realistic about your chances, it could be a wise move.
A major incentive to book is also the potential to capitalize on a terrific deal. If you’re a bargain hunter, it’s hard not to be on the lookout for ways to save money on future travel. And, on the points and miles side, you might discover reward availability that would otherwise be extremely scarce.
If you’re feeling optimistic about travel by mid-2021, it’s possible now to book flights nearly to the end of next summer. Hotel reservations can generally be made for dates even further into the year. In hotel loyalty programs that use dynamic reward pricing, you might be able to score a great low redemption rate.
As an example, the Holiday Inn Paris – Notre Dame is only 22,500 IHG points on many dates next summer. Although the cash rate this far out probably doesn’t accurately reflect what it will be when booking closer in, the rate for a 1 Queen Bed With Balcony is currently over 200 Euro per night in that timeframe. Even if the rate drops to half of that, a reward rate of 22,500 IHG points is still a good deal.
For a Canadian option, the Holiday Inn: Ottawa Downtown – Parliament Hill ranges from between 12,500 and 17,500 points per night in July 2021 compared to a cash rate of around $170.
I’ve previously shared a few thoughts on the subject of post-pandemic travel preparation and ideas on what to do with no trip to plan during this period of limbo before the world recovers from the COVID-19 nightmare. Thus, it seemed reasonable enough to move on to the topic of speculative bookings. Variations on a theme, I guess.
It’s very interesting to hear about folks proceeding with planning and booking travel. Some openly confess that they don’t actually expect their trip to go forward. Others are optimistic and feel the odds are high enough to get something squared away.
Personally, if I make any speculative travel bookings it will be limited to hotels – either reward reservations where the value is clearly beyond the norm, or a regular booking at a super low rate. Even with airlines offering more flexible change and cancellation policies, I wouldn’t want to end up with a voucher or a credit if I decide to cancel. I would make an exception for an Aeroplan redemption ahead of the new program coming November 8th, if the miles required were going to change significantly.
Right now, it’s just nice to appreciate the good fortune of living in Atlantic Canada.
Hopefully by this time next year the worst of the pandemic will be in the rear view mirror and we can all get back to travelling – making genuine bookings, not theoretical ones.