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Dear Yanni...Are refundable fares worth the cost?

Dear Yanni...Are refundable fares worth the cost?

A discussion of refundable fares and the woes of rebooking fees in this week's column.

Dear Yanni,

My company suggests we book refundable fares for our business travel, which seems like a waste of money if the meeting plans are set in stone. But at the same time I don’t want to waste more of the company’s money if plans do change. What are your thoughts?

  • Budget Conscious in Boston

Depends. Refundable fares can be very convenient if you know plans are likely to change, but are often unreasonably expensive if the chances of a trip being cancelled or altered are low.

Ask yourself how likely a trip is to be changed or cancelled. If you or the folks you are booking for are more-than-likely to keep the trip in place (let’s call it 80-20 odds), then paying the premium for a refundable fare is likely not worth it since discounted non-refundable fares, even with a change fee can net cheaper.

Shop around. Don’t fall into the trap of paying more for a non-refundable economy fare when either the last minute fare or business fares are cheaper. As an example, a fully refundable fare from New York to DC can be $750, but a same-day ticket is often $250-$350 each way and affords the total flexibility of booking day of. Of course, this is subject to availability, but if you’re booking nonrefundable for flexibility, it’s often found booking last minute at the same price or less. Further, one can take into account flight delays or weather and have a greater chance of selecting flights leaving on time.

Is the value there? I’m flummoxed by EA friends who tell me about bosses that insist on refundable Y class (economy) tickets. For so many routes, business is cheaper (even refundable business!). Don’t be afraid to consider or offer up the alternatives. Don’t assume folks understand the cost or lack of value in many refundable fares. If one frames it as a value opportunity-You could fly nonrefundable economy for $1,100, however, business is $850.

Where are you booking? If you book through a travel management platform, refundable fares are often more competitive than nonrefundable fares sold direct online. The most valuable refundable fares are those that are comparably priced to nonrefundable. In these instances, booking in advance to grab a great rate is absolutely advisable.

In total, refundable fares can have some value, but are often a misnomer for flexible. Booking last minute can still present both a savings and preserve greater flexibility. On a personal front, even with flight changes booked for myself and on behalf of others, I’ve always resisted a refundable fare in favor of nonrefundable. The one exception is when refundable is cheaper than nonrefundable, those are no brainers. I’ve also leveraged the price of refundable versus business. After all, why be tightly seated in coach and pay more?

 

Dear Yanni,

I’ve booked a ticket for my boss, but it turns out she doesn’t want to fly the whole itinerary. It seems like the rebooking fees are higher than just purchasing a new ticket. What should I do?

  • Reluctantly Rebooking in Reno

Ch-ch-ch-ch-changes… Never fun, often necessary. Flight changes are already a struggle to deal with between coordinating other people’s schedules, figuring out if different flights suit updates and then getting hit with potential fees. But what happens when it’s easier to keep part of a ticket and book something new rather than pay for the changes with one carrier, you ask? There in lies the rub.

First, let me just say, congratulations, you have officially made it to level 3 of travel planning. I don’t know if there’s a prize or how many points this gets you, but you are officially ready to start hacking the right trip for when things get complicated. No one needs to be wedded to the original ticket they’ve booked, so trying to make things work on an existing ticket can often be far (and fare) more complicated than it should be.

Let’s walk through an example. You booked your fave executive for a week of business meetings in the Pacific Northwest from Boston to Seattle on a Monday to be back on a Friday on Delta. Monday goes great, but Tuesday while she’s shuttling over to Portland, OR she finds out she has to get to New York by Thursday and Cincinnati on Friday and has to be back in time for an event in Boston Friday night. Panic ensues and you first attempt to arrange some sort of change on Delta but it’s a ton of additional fare. What now? Have no fear, look for new flights instead to compare and take it one city at a time. Turns out JetBlue can get her from Portland to JFK and is reasonably priced. Then what about Cincinnati and Boston? You search for those and find they are pretty expensive this last minute, but Delta flies there too. With your options in front of you, you snag JetBlue and can change the original Delta flight to a new multi-city NYC-CVG-BOS and you saved money. This may seem like a logical reasoning questions lifted from the LSATs, but this is real life.

Here’s what you need to remember:

  1. Pretend there is no pre-existing ticket
  2. Look at new one way/multi-city/round trips
  3. Figure out the cost to change the original ticket; and
  4. Book new flights and/or rebook the existing ticket for a current or future need or cancel it altogether for any potential credit or refund as needed.

Never feel constrained by an existing itinerary, things can and will change and you’ll get better at it the more it happens. Pro tip: if you notice over time that one person’s travel seems subject to change a lot more, consider refundable fares if they are reasonably comparable in price, or perhaps even wait until closer to the dates to book.

 


About the Author: Yanni Poulakos
Yanni has had the travel bug from a young age. From traveling to over 50 countries and stints spent living in Asia, South America, Europe and the Caribbean, his insights into hacking personal and business travel are grounded in first-hand experience. As a former road warrior, he once covered every province in Italy in 6 weeks by car, served as a travel manager for dozens of colleagues across the US and Europe while leading a fundraising team, and customized exclusive travel experiences for a smattering of politicians and celebrities. No matter whether at home or on the road, Yanni stringently adheres to his approaches to nutrition and self-care, with a fervent commitment to help others do the same.