Hidden holiday costs and how to avoid them

Holidays have a habit of exceeding your carefully set budget in unexpected ways, and one of the main culprits is hidden travel costs.

These come in various forms, from stealth taxes to roaming phone charges, but with a little preparation, you can keep more of your money to enjoy your well-earned break. 

Here, we explore some common hidden costs and how you can avoid them.

Use comparison sites

Before you even arrive at your chosen destination, you can save money using a good comparison site such as TravelSupermarket, Skyscanner or Trivago.

These sites can help you find the cheapest flight, package or hotel, and also include plenty of reviews, so you can be confident you’re bagging a genuine bargain.  

Be careful when paying by card

Paying with contactless using our debit and credit cards has become second nature in the UK for a lot of people.

You might want to think twice about doing this while on holiday, however, as card fees are one of the most frequent unexpected costs that people encounter abroad.

Every card provider charges a different amount, so check the foreign purchase fees before using it. Some banks offer fee-free spending abroad but you should always check the limits beforehand.

You should also always pay in the local currency rather than sterling or euros as you’ll get a better exchange rate. 

Don’t get stung by cash charges

It’s tempting to wait until you’ve arrived at your destination before withdrawing cash.

However, your card provider or bank will likely charge you a percentage of the amount that you withdraw.

It's worth considering withdrawing a lump sum to minimise this charge or using a bank that allows fee-free withdrawals overseas, although there could be limits.

It’s wise to let your bank know you’ll be using your card abroad, so they don’t become suspicious about withdrawals in a foreign country and block your account. 

Restaurant service charges can bump up the bill

When calculating how much to spend on meals out on holiday, factor in a service charge, which is a hidden cost in most European restaurants.

If you have a great meal and service, you can always tip in the traditional way, but it's completely up to you.

It’s probably worth doing a little research on your destination so you know exactly what the customs and charges are. 

Data roaming adds up

Providers often advertise free data roaming within the EU, but check the details, especially in the post-Brexit world.

Also, your provider might start charging you once you’ve used up your UK data allowance.

Outside the EU, data roaming is more likely to be charged, including in popular destinations.

To avoid this hidden cost, why not simply turn off data roaming on your phone before going away? Many places provide free Wi-Fi, or you could opt for pocket Wi-Fi.

Tourist tax in holiday hotspots

You will usually pay this charge when you check into your hotel.

The idea is that by contributing through this small tax, you will help maintain the beauty of the place you are visiting. Everyone over the age of 16 is expected to pay. 

You can check online before travelling exactly how much your holiday destination charges and work it into your budget. 

Check or pre-book your airport transfer

Once your flight lands, you'll likely want to go to your hotel and settle in, so it’s all too easy to overpay a local taxi firm to get you there.

If you’re on a package holiday, it’s likely your airport transfer is included. If not, you can usually find a cost-effective way with a little research and preparation.

Pinpoint the best-value train and bus routes before you travel to see if they go near your hotel or pre-book a taxi.  

When things go wrong, know your rights

If your dream break is suddenly off the agenda due to a flight cancellation, where do you stand?

What are your rights and how can you claim compensation? 

Claiming a refund and getting compensation

When you book a trip and flights, you should buy travel insurance immediately — not only when there are major problems in the travel industry.

This should protect you from delays and cancellations, but make sure your insurance covers you for ‘scheduled airline failure’ and ‘financial failure of the accommodation provider.’

It’s true that you can sometimes claim a refund from your credit card provider or bank, but to be on the safe side, it pays to get insured.  

When it comes to compensation, there is an EU regulation that entitles you to it.

This covers delays of more than three hours or full cancellation, as long as the problem wasn’t caused by ‘extraordinary circumstances,’ such as extreme weather.  

In summary, EU-based airlines are obliged to help you. If your flight is delayed, they will compensate you, and if it’s cancelled, you will be entitled to a refund or an alternative flight.

Airlines outside the EU may not have to provide the same protection, so you’ll need to check what you’re entitled to with individual carriers. 

What about airport delays?

A major source of delay is the long airport security queue.

If you miss your flight for this reason, your airline won’t be liable for compensation or refunds, so you’ll need to try and claim on your travel insurance.

Make sure you have clear evidence that you turned up in good time for your flight — car parking tickets, receipts from on-site shops, for example.

If it looks like you'll miss your flight, let your airline know as they are obliged to help you if the delay is beyond your control, and should try and rebook your flight. 

The issues surrounding cancellations and delays are complex, and influenced by your unique circumstances.

To get all the information you need, read the booking terms and conditions carefully, and contact your airline or tour operator if you have any questions. 

Look at these articles for more insights and tips on travel insurance and your money.