Are you sure that vacation package is a good deal?

Flickr photo of Waldorf AstoriaHotels spend a lot of money hiring marketing, advertising, and public relations specialists to sell packages to consumers, and lots of times, they win by getting press. But just because you see a hotel package advertised in a newspaper or a blog doesn't mean the editors of that blog have lifted a finger to figure out of it's really a deal.

From your pocketbook's perspective, there are only two kinds of packages: discount and "value-added." Discount packages truly give you a break, and they end up costing you less money than if you bought all of the components individually. But "value-added" packages are sales tools, and the stuff you get is provided as a convenience so you don't have to assemble them yourself, and possibly at a mark-up.

There's only one way to know if that hotel or vacation package that you're about to buy is a discount package or one designed to put expensive frosting on the same old cupcake. And that's to see what everything costs individually and do the math yourself.
Luxury hotels can set up some convincing smoke and mirrors. They toss in lush amenities like champagne, car service, and spa treatments to make the package look golden, but in fact, you could maybe do a little better without their help.

When I wrote the "Family Values" column for Travel + Leisure, this is what I did for every single package. Some hotels and vacation sellers hated that I did the math to fact-check the true value of their promotions, but it was the only way to separate the wheat from the chaff.

Take the famous New York City hotel Waldorf=Astoria. (Yes, it uses an equal sign in its name, which is appropriate considering the math you'll have to do to figure out if you can afford it.) The hotel is a legendary Park Avenue property that regularly hosts American presidents and was once home to songwriting royalty Cole Porter. The Waldorf recently announced something it calls the "Real Deal Family Package."

With the package, you get a mini-suite, one in-room movie per day, four coupons to the Starbucks in the hotel that can be used for continental breakfasts, and a rollaway bed or crib.

For that, the price "starts from" $389.

You'd think from the name "Real Deal Family Package" (it's coded RDLPKG) means that you're getting a deal at that price. But never take a hotel's package for at face value. I asked the people selling the package to break down the real-world costs to see if you really are saving anything.
  • The price of a mini-suite on August 20, a sample date during the promotion, was $379, but suites can range from $329 to $699 depending on the date chosen. (The package is good until December 5, so it includes Thanksgiving weekend, for which New York City prices can be extreme -- hence the high-water mark of $699.)
  • A movie on the hotel system costs between $18.95 and $29.95, depending on how new the movie is.
  • The coupons are valued at approximately $15 each, and you get four, bringing the maximum value to $60.
  • Cribs or rollaways cost $50 per night.
So if you book this package when the room rates are normally $329, you will have paid $389 for stuff that would have cost you $407.95 (if you don't need the crib) or $457.95 (if you do).

You have to make sure to watch that in-room movie, though, and it had better be an old movie, because it accounts entirely for the $18.85 that you would save without the crib or rollaway bed. If you forget to watch the movie, though, you've saved nothing at all, and this "real deal" isn't a deal at all -- just a nice night at a historic hotel that you could have booked yourself.

At higher rates, and if you need the crib, it's good for a little more, and you will save money, but you have to re-price your proposed night's stay using the package to know for sure, because that "starts from $389" line is a hint that the price of the package will fluctuate, and possibly dramatically.

At the lowest possible rate, this package is really only good for a free in-room movie and a rollaway bed. Much of the time, though, the regular room rate will be higher than $329 (on August 20, for example, it was $379), which could make the value stronger. The difference in value is proof that you should always inspect the components of any hotel or vacation package that you intend to book.

You won't know the true value unless you 1) price that hotel room for the exact same night with no package and 2) factor in the cost of the "value-added" amenities.

I just use the hotel's online reservations system to do get the first number, and I call the hotel and nose around the Web to find the answers to the second question.
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