How to pay less for a holiday

Want to get away from it all but feeling the pinch? Many of us don’t want to sacrifice the option of having at least one holiday each year. The downside of that is we can end up still paying for it the following year.

However, there are ways of cutting the costs of a break. Here are some of the best.

Shop around – flights

There are number of flight comparison sites out there, so make sure you use them to do the hard work for you. Try the likes of Kayak, Skyscanner, Momondo and Fly.com.

Once you’ve done that, take a look at the cheapest airlines’ own websites, as they may have special deals on offer or a sale. If you're going to a popular holiday destination, check charter airlines such as Thomas Cook and Thomson, as well as scheduled airlines, as they may be cheaper.

Shop around – hotels

If you’re looking for a hotel, you should have a look at sites like lastminute.com and Expedia, which tend to get good deals on hotel prices (in fact Expedia even offers a guarantee that if you find the same hotel room cheaper anywhere else, it will refund the difference).

But there are loads of other sites to check out, like Discounthotels.co.uk, hotelclub.net, Hotel.com and (particularly if you are off to the States) hoteldiscount.com.

If you just want a cheap break somewhere, sign up for daily deals sites such as Groupon, LivingSocial, Groupola and KGBDeals, which regularly have hotel deals. Just make sure you check that the bargain they're presenting really is a good deal by looking at the hotel's own website.

It's also well worth reading the travel sections of national newspapers both during the week and at weekends, as they often have a selection of cracking looking deals. However, be sure to act quickly as they will disappear pretty sharpish!

lastminute.com isn't just great for arranging a trip at short notice – it's also a good place to get a hotel room at a shockingly low rate. The catch though is you don't know which hotel it is.

Plenty of brilliant hotels – we are talking top of the range here – have signed up to its Top Secret Hotel scheme, offering up to 45% off their nightly rates. You go on, pick which date you want to go, and you'll be given a description of the hotel, as well as its location and rating. But not its name.

lastminute.com's sister company Travelocity has a similar service and you'll see some Top Secret rooms listed in your results.

There's also Hotwire, which does exactly the same thing as lastminute.com and promises "four-star hotels at two-star prices".

Only after completing the booking do you get sent the name of the hotel. If you have figured out which hotel you're looking at before booking, you could then try your luck at phoning up, quoting the price you've been offered and seeing if the hotel will beat it. You might get lucky, as booking with them direct means they don't have to pay the referring website commission.

Shop around – package holidays and cruises

If you’re looking for a cheaper package holiday or cruise, first take a look at websites and brochures. Then try the likes of Teletext Holidays, Travel Zoo and Icelolly.com to get some idea of discount prices. If you’re brave enough, have a go at haggling. If you can find it cheaper than the brochure price then phone up the tour operator offering the holiday and see if they’ll beat it too. Or try a local travel agent.

If you book as early or as late as possible, you’ll save the most money. But if it’s a late package holiday booking you may not be told where exactly you’re going until you get to the airport.

Use loyalty points

A Tesco Clubcard, Nectar card or Avios (formerly Airmiles) account can turn your everyday spending into cheaper holidays.

Here are some of the companies you can redeem your points with via these loyalty schemes:

Scheme	Where points are redeemable
Clubcard	Avios, Virgin Atlantic Flying Club, Monarch, Marriott hotels, Hilton hotels, MacDonald hotels, Best Western hotels, Virgin Holidays, Cosmos, Park Resorts, P&O Cruises, Cottages4You, Thomson Al Fresco, Just Go coach holidays, UK Boat Hire, Euro Tunnel, Wightlink, Stena Line, Irish Ferries, Europcar, The Adventure Company, Hurtigruten
Nectar	easyJet, Eurostar, Expedia, Orient Express
Avios	Flights, hotels, Avis car hire, Eurostar, Brittany Ferries, Condor Ferries, DFDS Seaways, Irish Ferries, P&O Ferries

As well as earning Clubcard points on your Tesco shopping with a Clubcard, you can earn more points by paying with a Tesco Clubcard credit card at Tesco and wherever else you shop.

Likewise, if you're a Sainsbury's shopper paying with the Sainsbury's Bank Nectar credit card will increase your Nectar total, significantly in Sainsbury's stores but also elsewhere.

You can boost your Avios with the Lloyds TSB Duo Avios credit cards (you get an American Express and Mastercard). And, right now, if you spend a minimum of £500 a month for the first three months you have the cards you’ll receive 15,000 Avios – enough for one return flight to Western Europe (you’ll have to pay £30 in charges on top).

With these credit cards, make sure you pay your balance off in full each month or you'll be essentially paying money for your rewards in the form of interest.

If you're a bigger spender, the American Express Preferred Rewards Gold charge card will give you 20,000 Membership Reward points if you spend £2,000 in the first three months you hold the card. These points can be converted into Avios and Nectar points (on a one-for-one basis) or frequent flyer points for 15 airlines. Note that this is a charge card, not a credit card, so you have to pay off the balance in full each month. And there’s normally a £125 annual membership fee, although this is currently being waived for the first year.

[Related link: Compare reward credit cards]

Fly away with an airline credit card

Several airlines offer their own credit cards. Some offer a ‘free’ flight (although you still have to pay taxes and charges) as a joining incentive or when you spend a certain amount on the card after account opening.

Apply for the Flybe credit card before 30th April and spend on it (even £1) and you'll get a free return flight to selected destinations in the UK and Europe (plus taxes and fees). The representative APR is 18.9%.

Ryanair's credit card also offers flights when you spend. If you spend £100 in the first 90 days, you'll receive a voucher for a return flight (you'll have to pay taxes and charges on top). If you spend £3,000 in a six-month period (these run from 11th December-10th June and 11th June-10th December), you'll receive two flight vouchers. So you could earn up to five flight vouchers in your first year. The representative APR is 19.9%.

Virgin Atlantic offers an American Express and a Visa with its White Card. You earn one Flying Club Mile for every £1 spent on the Amex card and one Flying Club Mile for every £2 spent on the Visa. You'll get a bonus of 3,000 Flying Club Miles with your first purchase. The representative APR is 17.9%.

Again, make sure you pay off your balance in full each month.

[Related link: Compare airline credit cards]

Home swapping, house sitting and couchsurfing

These are arguably the cheapest ways to get accommodation.

Home swapping, as the name suggests, involves you staying in someone else’s home while they stay in yours. Websites that will match you up include Home Exchange and Home Link.

Or if you fancy looking after someone’s house somewhere else and perhaps watering the plants and feeding the fish for a week or two, you could try housesitting. The likes of Trusted Housesitters and Home Sitters match sitters with homeowners.

Couchsurfing is a bit more extreme, as you stay in someone’s home while they’re there too, often literally on the sofa. The advantage of this, beyond the fact that it’s free, is you have a local tour guide, or at least someone who can recommend places to go, on tap. The Couchsurfing website is the place to start your adventures.

[Related link: Don't forget your travel insurance – shop around here]