Before making a down payment on an all-inclusive vacation this spring, consider this: Even though all-inclusive deals usually come with higher price tags, the extra cost might be well worth it. Economists and travel experts say that pre-paying for all the food, drinks, and relaxation you can buy can actually help you have a more enjoyable getaway because you don't have to keep thinking about the money you're spending.
Here's what you should know before booking your next vacation:
People don't like to pay for every little thing. When you head to the Caribbean and end up pulling out your wallet every five minutes for drinks, food, and other indulgences, you can end up in a foul mood. Paying for one product or service at a time, says George Loewenstein, professor of economics and psychology at Carnegie Mellon University, "makes the costs and how much you're paying much more salient. You're forced to think about it more."
He compares the process to buying a luxury car with multiple features, such as heated electronic seats. People tend to enjoy the seats more when they come as part of the overall package than if they paid an extra $400 for them, he says.
In part of his research, Loewenstein scans people's brains while they're making spending decisions. When they are in the process of forking out money, their brains' "pain centers"—the areas associated with pain and nausea—are activated. So if people can avoid constantly getting their wallets out while on vacation, they can avoid some of that pain, he says.
People can relax more if they've pre-paid. "If you already paid for it, then it feels free. Otherwise, on the last day, you're thinking, 'Oh no, when I get back I'll have to pay for this,'" says Loewenstein. The vacation itself, then, is enhanced by the fact that you've already paid for it. This way of thinking, he says, is called "prospective accounting," because we tend to focus on future payments more than past ones. Prospective accounting is particularly strong with something like a vacation, which lasts a short period. For cars or durable goods such as washing machines, people don't mind paying for them over time, because they are still enjoying their benefits.
All-inclusive resorts are made for budgeters. Since pre-paying means that you know exactly how much you're paying ahead of time, it's a useful strategy for people with strict limits on how much they can spend, says Chris McGinnis, consumer travel expert for Best Western's Youmustbetrippin.com blog. "When you book a vacation at an all inclusive resort, nearly everything is paid for in advance and there is little nickel and diming after the fact. So you don't end up going on vacation and coming home to an outrageous credit card bill for extras," he adds.
You can avoid tipping confusion. In many parts of Europe and Asia, people tend to tip less than they do in the United States; the cultural confusion can lead to awkward moments. Some travelers would prefer to bypass such uncomfortable awkwardness by pre-paying for all costs, including tips, in advance. "It does remove a source of stress," says Lowenstein.
[For more on how much to tip in different circumstances, read "The New Rules of Tipping"]
Every deal is different. "Be sure you know what is included and what is not included," warns McGinnis. Few places are truly "all-inclusive" and many resorts charge for extras, from spa treatments to alcohol. Even when a hotel advertises "tips included," some vacationers find that tips are, in fact, expected from staff members. Similarly, a person accustomed to high-end alcohol brands may want to check their availability before signing up for a week of 'free' drinks. Travel expert Peter Greenberg points out that some all-inclusive resorts charge for golf and babysitting; others exclude airfare. Calculating how much you're likely to spend on a per-item basis—for example, will you really want to drink 10 Bahama Mamas a day?—can help you determine if the all-inclusive fee is fairly priced.