All non-essential travel is off the table for now, but airlines and hotels are still accepting reservations for the future — often at deeply discounted rates.
If you're considering booking travel for several months out, consider sticking to refundable tickets and reservations made with points or miles so there's less risk of losing money if your plans need to be canceled.
You should also prioritize having an emergency fund of savings over booking a future vacation.
If you're in good financial standing, you could open a new rewards credit card now and earn its welcome bonus so you have a stash of points ready to go when you're ready to book a trip.
As a result of the coronavirus, our lives have become very small in scope. If you haven't had to cancel an upcoming trip, at the very least the current situation has likely put your vacation plans on hold. But while the world is largely housebound at this time, travel brands continue to sell flights and hotel rooms for dates in the future, and prices can be extremely low.
With airlines and hotels offering cheap rates and carriers such as JetBlue letting you book as far out as January 2021, you may be wondering whether it's worth jumping on any of the current travel deals to book vacation in the future. If you're considering pulling the trigger on a cheap flight or hotel room now for travel dates in the future, here's what you need to know.
If you do book travel, be prepared to cancel or reschedule
Booking a trip for the early fall may seem like a safe bet now, but no one knows when life will be back to normal. Given this uncertainty, you'll want to treat any travel reservations you make as subject to change.
Research change and cancellation policies before booking
Many travel brands have released customer-friendly change and cancellation policies. For example, American Airlines will waive change fees for travel through May 31, 2020, and it will waive change fees for travel booked by April 30, 2020.
Hotels generally let you cancel a few days before check-in without any penalty, but be sure to double-check a property's policy before you make a reservation.
Stick to refundable reservations
Zach Honig, Editor at Large at travel website The Points Guy, recommends steering clear of nonrefundable tickets and hotel stays. "Personally, I'm not purchasing any nonrefundable travel right now, though I have booked several award flights that I hope to take, since I've found business-class availability to be outstanding, for travel later in the year," he tells Business Insider.
Refundable tickets and hotel stays are often more expensive than their nonrefundable counterparts, however, which leads us to the next point ...
Booking with points or miles could save you some headaches (and money)
While most travel brands have adjusted their cancellation policies for paid reservations, if you have points or miles, consider booking any speculative flights or hotel stays with your rewards.
It's usually easier to cancel award tickets than cash reservations, and Honig notes that United is waiving award redeposit fees for the rest of 2020 as long as you cancel more than 30 days before departure. If you're looking to book through another airline program, check to see if they're offering award redeposit fee waivers as well.
Consider purchasing trip insurance
If you can't resist pulling the trigger on booking an expensive trip for the future, buying supplementary travel insurance could be a smart idea. While travel rewards credit cards like the Chase Sapphire Reserve®, Chase Sapphire Preferred® Card, and the Platinum Card® from American Express offer strong travel coverage, including trip cancellation and interruption insurance, their coverage limits the reasons for which you can cancel and receive a full refund.
Focus on your emergency fund first
While the urge to book travel is understandable given that we're all cooped up at home, it's wise to balance that wanderlust with the need for financial security.
"Given the vast amount of uncertainty that we're dealing with at this moment, my advice as a financial planner would be to focus on what you can control," says Eric Roberge, CFP and founder of Beyond Your Hammock. "Right now, that comes down to your personal saving, spending, and investment contributions."
"My priorities before spending on travel would be to pad my emergency fund (even if it was 'full,' having a little extra cash right now only adds security and stability), maintain or even increase my investment contributions, and do what I can to support others in my local community who may be struggling," Roberge continues.
That's not to say you can't book future travel and save money, but it's hard to overstate the importance of being financially prepared for any unforeseen circumstances during this uncertain time — especially as unemployment claims continue to skyrocket.
If you have travel points, such as Chase Ultimate Rewards and Amex Membership Rewards, keep in mind that you can redeem them for cash back. This won't get you maximum value in most cases, but if you're short on cash, this is an option for building your emergency fund.
You can still work toward your next award trip
You don't have to stop dreaming about an exotic vacation, even if you ultimately decide to hold off on booking future travel for now.
In fact, this is a great time to start earning points and miles so you'll be ready to go whenever we return to normalcy. Signing up for rewards credit cards like the Chase Sapphire Preferred and the Capital One® Venture® Rewards Credit Card and earning their welcome bonuses will put you in a perfect position to book award travel in the future.
Consider cards that earn transferable points (like Amex, Chase, or Citi points, or Capital One miles) as opposed to those that earn rewards with an airline or hotel program, so you're not locked into just one option for redeeming them. And remember that many cards offer bonus rewards on purchases such as online shopping, food delivery, and groceries.
Copyright 2020 Insider Inc. All rights reserved. From https://www.businessinsider.com. By Sarah Silbert.