I’m surprised I’ve never written about this topic before. As someone who travels a lot, I’ve long been fascinated by travel hacking, but I’m also frustrated with the way people talk about it. There are tons of blogs, websites, columns, and forums dedicated to the topic, but they’re quite narrowly focused on things like optimizing credit card points and getting the cheapest possible upgrades, or on niche topics like vegan travel, and they sort of miss the big picture. I find the right way to travel is to always consider the big picture.
I’m traveling intensely these days and it occurred to me recently that, despite the fact that I’ve been traveling my whole life, I’m still constantly learning and improving how I travel. I thought I’d share some of the things I’ve learned here, in the hopes that they help my fellow travelers.
Thing #1: Flexibility 🤸♂️
These days I typically plan my travel in two passes (which, incidentally, is also how I write). The first pass is quick, rough, and flexible. I do it as soon as possible once I know there’s a chance of a trip, and once I have a rough idea of the dates. I go ahead and lock in a ticket that’s good enough, even if I know there’s a good chance something will change later: i.e., even if I know I might have to change the dates, the route, or even decide later not to travel. I don’t spend time trying to perfect everything, I just pick something reasonable. This might mean paying a little bit too much, flying from a second choice airport, on a second choice airline, or having a less-than-perfect connection somewhere.
One reason I do this is because, on average, prices tend to go up (more on this in a moment). Other things equal, it’ll almost always be cheaper to book a trip today than tomorrow. This is especially true on busy routes that are almost always full (e.g., NY-CA, NY-London; more on this in a moment, too), and it’s especially true in higher fare classes, which also tend to fill up quickly. The difference between being the first person on the plane to book a business class fare and the last person is often $10,000 or more. Don’t be the last person.
I also do this because I’m busy and distracted. Needing to book a trip is something that nags at me until it’s done, even if it’s done imperfectly, as I described. And sometimes I get distracted and forget to book something until it’s very expensive. The important thing is that a ticket is bought and a hotel is booked. I can worry about optimizing things later; that happens during the second pass.
Flexible tickets make this possible. In general air travel only tends to get worse, but one big exception is the fact that the American carriers eliminated most change fees in 2020 during the pandemic, and thankfully haven’t brought them back. The catch is that the funds aren’t refunded, per se, but are instead returned as a travel credit that can be used with the same airline within a year. As long as you travel on the same airline often, these travel vouchers tend to be as good as cash.
In general airlines make this pretty easy, and show you your remaining travel credit when checking out. There are some byzantine rules to be aware of, however. One is that travel credits generally need to be used within one year of the original purchase date, which sounds straightforward enough until you’ve used, cancelled, and reused the same fares many times—accounting for this can get complicated. Another is that they only apply to travel that originates in the United States, which means that one way fares from abroad tend to have a change fee.
Another useful trick is to use miles wisely. There are sites that help you optimize use of miles, but I find their advice to be confusing, narrow, and generally quite out of date. For instance, they don’t talk about the fact that miles can be used to book trips on routes that aren’t otherwise available: as one example, United generally won’t sell you a ticket on a partner airline that doesn’t include travel on a standard United route for cash, but they’re happy to do so for miles. They can also be used to avoid the restrictions on flexibility for flights that originate abroad, just mentioned: all flights booked with miles are flexible, regardless of where they originate.
I often book multiple flights for a trip: at different times of day, on different days, or even from different airports. For instance, I might not know before the trip whether I want to leave ETHDenver on Saturday, Sunday, or Monday. It will depend on my meeting schedule and how I’m feeling. So rather than buying a single roundtrip ticket, I’ll buy a one way ticket to Denver, and three one way tickets home. Each ticket only costs around $200, and I’ll reuse the funds anyway. The trick is to never book overlapping flights on the same airline: airlines don’t like this, and they’ll randomly cancel one. Also, to always remember to cancel the ones you’re not going to use (many tickets immediately lose their value in case of a no-show).
The second booking pass happens shortly before a trip, anywhere from a week to a day before. At this point my travel plans are more firm, and are very unlikely to change. Most of the time this actually means doing nothing: I’m consistently surprised how good my “quick and reasonable” booking usually is, and very often stick with it. Sometimes this just means adjusting dates, times, connections, or airports to factor in more information (e.g., knowing more specifically which event I need to attend, where). Sometimes this means canceling a flexible trip booked with miles and rebooking a less flexible fare with cash. Sometimes it means buying the exact same ticket again, for less.
You heard that right: sometimes it’s cheaper to book a ticket last minute than way ahead of time. It doesn’t happen often, but in my experience it happens about 10% of the time. It’s also true of hotels. And it makes sense: if an airline still has empty seats or a hotel empty rooms at the last minute, it generally makes sense to sell them at a discount rather than let them go to waste. It’s always worth checking. It all depends on supply and demand.
Finally, a quick, obligatory note on airline loyalty programs and status: on the one hand, these require playing arbitrary games such as spending a certain amount or flying a certain number of legs with a given airline, which very often involves choosing suboptimal routes on at least some trips. On the other hand, the highest status tiers can be extremely valuable, mainly for the upgrades and access to top-tier customer service. In general I recommend ignoring loyalty programs unless you fly a lot, in which case it probably does make sense to optimize for status with at least one alliance.
Thing #2: Supply and Demand ⚖️
It helps a lot to have a mental model when doing the sort of optimization I’m describing above. This optimization is a lot of work and it’s complex, and a coherent mental model helps it all make sense: i.e., why it makes sense to book way ahead of time, to book multiple options, to keep an eye on fares, looking for last minute deals, etc. These things work a lot of the time, but they definitely don’t always work, and a mental model can also help us understand why.
Fortunately we don’t have to look very far or hard for a mental model. The simplest model is also the correct one: airlines use demand-based pricing, which is the same way hotels tend to price hotel rooms. Getting your head around how this works can really help with navigating travel planning.
Demand-based pricing in its simplest form is quite straightforward. Imagine there are 100 identical seats on an airplane. (In practice seats aren’t identical for all sorts of reasons, but to keep things simple, imagine a seat on a given route is a pure commodity.) The airline sets a base price, basically the price for the very first seat, call it $100. Each seat sold after that costs slightly more (or, more often, there are batches of seats available at a given price). The second seat sold might cost $105, the third $110, etc. Note that this pricing is usually non-linear! The 95th seat might sell for $1000 and the 100th seat for $1500.
In general, supply only decreases over time, i.e., consumers buy seats and the remaining supply of seats on a given route, on a given date, only decreases over time, so price tends to go up over time. Supply can increase if customers change or cancel their tickets, or if the airline decides to introduce a larger plane or another flight on a given route.
If you’re cryptonative and this sounds like a bonding curve, that’s because it’s basically the same mechanism. One difference is that, unlike trading against a bonding curve, airlines don’t let you sell seats back to them, or to someone else, at a different price than you originally paid. The market would be better and more efficient if they did, but there are lots of reasons this isn’t possible.
Demand-based pricing is popular because it’s sound economics. It allows the seller to price discriminate (i.e., to sell the same product at different prices to different customers) fairly, on the objective basis of demand, and it allows customers to discriminate as well. Those who are cost-conscious can choose to fly at times when demand is low, and those who are more time-conscious (e.g., business travelers) end up paying more. Everyone benefits: the airline earns more, and people who are flexible and cost conscious get access to cheaper tickets.
This is obviously a simplification, and airlines use algorithms that are vastly more complex than this to price fares, but if you understand this much, you understand more than 80% of what’s going on under the hood. With this framework, the system I described above in the first thing should also make more sense. Book something early to take advantage of the fact that prices typically go up over time (since aggregate demand tends to increase over time). Check prices last minute, because airlines are more willing to let go of excess supply at a discount at the last minute, and because occasionally aggregate supply increases or demand decreases.
It’s good to have a rough idea of the supply and demand for any given route and time when you’re planning a trip. The absolute worst thing as a buyer is to need to buy a seat when supply is low and demand is high. The best example of this is long-haul international flights right before a new school year begins. There are a ton of international students flying back to school exactly at this time, and they’re not very flexible with respect to time. For popular routes without a lot of supply (e.g., NYC <> Asia), prices tend to get sky high in August as a result. A ticket that might cost $500 at a time of low demand will easily cost $2000 or more when demand is high. A similar thing happens on a popular business route on Sunday evening or Monday morning, and on Friday.
Understanding supply-demand dynamics helps you understand your options and your power as a buyer, relative to the seller’s pricing power. You have much greater ability to find better options when flying a popular route during times of low demand, e.g., a redeye between New York and California. Demand varies not only seasonally (summer and right around the winter holidays tend to be high season, depending on the destination) but also depending on the day of the week (business travelers tend to travel Sun- or Mon-Fri, so travel on Tue-Wed-Thu or Saturday whenever possible). When only one airline flies your route of choice, understand that they have monopoly pricing power, so deal with it, or fly a less direct route, or from a different airport.
It’s not too hard to gauge supply and demand. For supply, you can simply check route maps or look at the options on Google Flights. For demand, you can look at pricing relative to the base line (a non-peak date far in the future). Most airlines also let you view the available seats when booking a flight, so you can get a rough idea of how full a plane already is (keep in mind that it’s always an undercount since some paid passengers haven’t yet been assigned a seat). Among other things, this is useful for knowing your chances of an upgrade.
While the concept of supply and demand is quite straightforward—it’s literally Econ 101—it took me a while to get my head around how these patterns manifest in an easier or worse booking and travel experience.
And whatever you do, don’t fly the day before Thanksgiving or the week before Christmas!
Thing #3: Get Creative 🎨
If it’s not already clear from the previous thing, the worst case scenario when booking travel is to be completely inflexible: needing to fly a particular route on a particular date at a particular time. When this happens, you’re totally at the mercy of the airline and its pricing algorithm. The more degrees of freedom you can introduce, the better off you are and the less you’ll pay. The most obvious degree of freedom is time: if you fly the same route a day or two earlier or later, you can often save a lot of money. Most travel booking sites and even most airlines make it pretty easy to compare the price of a given route across time.
But in my experience I’ve found that there are actually many other ways to be creative when booking flights. Changing airports can make a huge difference. It’s counterintuitive, but even adding a stop can often make a trip cheaper. It’s important to understand that airlines price fares that originate in different markets differently, even when those markets are geographically adjacent. For instance, flying direct from Hong Kong to New York on Cathay Pacific will cost more than flying the same airline via Hong Kong from a lower-cost Asian market such as Taiwan or Thailand. It’s much cheaper to fly domestically in China from Shenzhen than it is to fly to the same destination from Hong Kong, and it’s much cheaper to fly in Mexico from Tijuana than going the same place from San Diego or LA.
It sometimes helps to be flexible in fare class as well. Fare classes tend to be priced independently: in other words, a business class ticket may cost an arm and a leg because there’s a lot of demand, but economy or premium economy may still be very cheap. By contrast, occasionally a higher fare class will be competitive with a cheaper option for the same reason. It’s not that uncommon to see a premium economy fare that’s only slightly more expensive than economy, or even a business fare that costs about the same as premium economy. While it’s rare, I’ve even seen a business fare that was actually cheaper a few times. It always makes sense to check the price of all fare classes. If you want a business ticket but business is too expensive, consider buying a premium economy ticket instead and then bidding for an upgrade. This is another trick I learned recently: your chance of an upgrade is substantially higher from premium economy than from economy.
I also find that open jaw tickets are often a great deal. An open jaw ticket traditionally means flying into one airport, then back home from a different airport. I’ve had a lot of luck with open jaw itineraries from the United States to both Asia and Europe. If a roundtrip ticket to, say, Paris or Hong Kong is very expensive, I’ll often find a much cheaper option with a return flight from, say, Barcelona or Tokyo. Of course this doesn’t always make sense for every trip and every itinerary, especially when time is tight, but it can make trips much more interesting! Add a few days to the trip, add another destination, book a low cost one way flight between cities, and save money. Spend the savings on a few extra nights in a hotel.
By the same token, it’s often cheaper to buy tickets separately rather than as a single roundtrip itinerary. It’s quite easy to buy a one way ticket to your destination, then buy a separate one way ticket home from the same place. Sometimes, though rarely, it’s cheaper to do this even on the same airline; it’s more often cheaper to fly different airlines for the two legs. Be aware that the return ticket will almost definitely be priced in the origin market’s currency, and also make sure that you have a return ticket already purchased when you arrive, since many countries require it at immigration. Of course it’s also possible to split one leg of a trip into two itineraries, but this is tricky and can be dangerous because it usually means that you need to receive and recheck your bags, go through check in again, etc., which can be time-consuming. You can also get into trouble if the first flight is delayed.
Yet another strategy is to target a regional hub. I had a lot of trouble buying tickets recently to two very different cities, Bangkok and Mombasa. Bangkok is notorious for having extremely limited long-haul options for reasons I still don’t understand. I couldn’t find a reasonable fare to Bangkok from California. I ended up buying a roundtrip ticket to Hong Kong instead, then a much cheaper roundtrip fare between Hong Kong and Bangkok. It meant spending one night in Hong Kong, but I didn’t mind breaking up the long trip, so I booked a cheap hotel room at the airport, and it was still cheaper than booking the trip as a single itinerary. Rather than a long, expensive, multi-hop itinerary directly to Mombasa, I instead booked a good roundtrip fare to Dubai, then a cheap, short hop flight from Dubai to Mombasa. Dubai is tiny, has a great airport, and is easy to get around. I like the idea of breaking up a very long trip there to have dinner with a friend (and, again, spend a night at a hotel, rather than dealing with multiple multi-hour layovers).
One final trick that I’ve learned recently: there’s an asymmetry between the outbound and inbound legs of an international trip. Outbound, you definitely want to be on a single itinerary for the reason mentioned above: you don’t want to have to receive and re-check your baggage, you don’t want to worry too much about flight delays, etc.. But inbound, at least in the United States, you always have to receive your luggage, clear customs, and recheck it anyway. This means that you can easily skip the last leg of your trip, or add a one-day stop in the connecting city. When connecting in San Francisco or New York, I like to book an 8-10 hour layover. This allows me to recheck my bags immediately, then head downtown with just a backpack for a meeting or to meet a friend, which saves me a separate roundtrip later.
These are just some tips and tricks that have worked well for me. I’m sure there are many other ways to be creative when booking travel. I’m curious to hear what’s worked well for you.