Cheap package holidays are put together to suit as many people as possible, so they can be piled high and sold at a low price. So if you want a standard seven, 10 or 14-night stay in a traditional holiday destination, it's usually cheapest to get a package holiday. However, this isn't always the case.
Sometimes you can save substantially by putting together your own break. To help you work out the cheapest option for your holiday, you need to ask yourself these seven questions:
1. Where are you going?
One major category where packages tend to compete poorly is with city breaks, because there is simply so much choice for independent travellers. At the bargain basement end of the market, you can fly to the cheapest possible destination, on an early bird booking with a budget airline (for example, you can spend as little as £60 on return flights to Barcelona). You can then choose the accommodation that suits your budget - from a house swap to Airbnb, hostels, B&Bs or hotels. In Barcelona, for example, Airbnb has a host of options from £15 a night; so a four-night break in Barcelona could set you back £120 for flights and accommodation. A package will struggle to compete with that.
2. Are you flexible about your destination?
In some cases, people want a stress-free holiday somewhere familiar, and the package is perfect. In others, travellers want something affordable, and the package just seems to fit the bill.
If you fit into the second category, then you could put together a DIY package in a less popular destination for as little as a third of the price. If, for example, instead of gong skiing in the pricey French Alps, you selected Poland, Romania or Bulgaria, you can put together a cheaper break. If you also considered airports a little further away from the resorts, staying outside popular towns, and opting for a self-catered apartment, you can get a deal for the fraction of the cost of a package.
3. How much value are you getting from the added extras?
It's nice to be able to get a ski pass thrown in, or two-weeks' entry to a theme park. It's also indulgent to be able to have an in-flight meal, and then anything you want to eat a drink at the resort. However, instead of working out how much it would cost you to exactly replicate what you will get from the extras on a package (which will almost always cost more to put together yourself especially if you go all-inclusive), ask yourself what you actually intend to use.If, for example, you are planning a ski holiday but want to have plenty of rest days, then do you need a ski pass for the whole of your break? Likewise, will you go to the theme parks every day, and will you over-eat quite so spectacularly when the food isn't included? There will be some people who want the lot, and for whom an all-inclusive package is an exceptionally good deal, but it's worth checking whether you are that kind of holidaymaker.
4. Who are you going with?
If you are travelling alone, you may well be better off with a DIY break, because package holidays tend to focus almost exclusively on people travelling together, and the per person price is always based on two people sharing. If you cannot share, then you will be charged a single supplement and given far less choice about where you can stay, so you may find yourself better off booking things separately.
5. How much time do you want to spend organising your holiday?
If you are a dedicated bargain-hunter with plenty of time to shop around, then you could get a better deal by piecing together incredible bargains yourself. This may mean going off the beaten track, and using self-catering accommodation from Owners Direct, or Airbnb. While this suits people who get a kick out of creating their own bargain holiday, there will be those who find the whole thing frustrating and time-consuming. For them, the savings involved may simply not be worth the effort in tracking down the break, or keeping on top of things when they go away. If this describes you, then you're going to lose interest well before you've found the best deals, so it's worth signing up for a package and accepting your slightly pricier fate.
6. Are you looking for a last-minute deal?
If you book at the last minute, package holidays are far more likely to offer better discounts. There are a few reasons for this. It's partly because of the way tour operators run their businesses - so at the last minute it's better to sell a holiday at any price than leave it unsold. It's also partly because the hotel and airline are less likely to be concerned about damage to their brand image if the discount is hidden inside a package. And it's partly because of the way air fares increase as you get closer to your departure date, which means that DIY deals are incredibly hard to come by - while packages locked in the price of the air fare months earlier when flights were much cheaper. It means that the last-minute cut-price market is the place to look for a package rather than try to snap up cheap flights and hotels. The discounts in the last-minute market are so striking that in some cases independent travellers will find it cheaper to book a package and then not use the hotel instead of booking a flight separately.
7. Are the savings worth it?
This is something everyone needs to ask, whether they have decided to book a package or a DIY holiday. If you make a decision based on price, you need to be sure that you are still getting the holiday you want.
If, for example, you are at heart an independent minded person who likes to explore and do their own thing, how happy will you be enjoying the all-inclusive entertainments and sitting by the pool? If, meanwhile, you just want to relax on holiday, will you be happy hiring a car, driving to an unfamiliar location and staying in accommodation you found online? Will you enjoy having to hunt down local entertainment, activities, food and drink, or will it be too much work for what is meant to be a relaxing break? In the final analysis, if a holiday doesn't give you enough of what you need, then no kind of saving qualifies as a good deal.
Finally, you need to think about protection. Package holidays are usually protected by ATOL or ABTA, which means that if the travel company goes bust you'll be refunded if you haven't travelled yet, and found alternative accommodation and flights home if you're already on holiday.
If you go on a DIY break, then in most cases you are not ATOL protected. However, since 2012 it has been possible to get the protection if you book a flight, hotel or car hire together - or within 24 hours of each other. If you book using a credit card, and the holiday costs at least £100, you will also have the extra protection from the credit card firm if any of the companies involved go out of business.