If you’ve ever shopped in a wholesale retail store like Costco (COST), Sam’s Club (WMT) or BJ’s Wholesale, you’re probably more familiar with their barrels of cheese balls and big bottles of olive oil than you are with their vacation packages. While these membership-only warehouse clubs have cornered the market on buying groceries in bulk, they haven’t made as big an impact on the travel industry — yet. BJ’s started providing travel services in 1990; Costco in 2001; while Sam’s Club started in June 2014.
Offering deals on everything from cruises to rental cars, wholesale retail clubs are quickly becoming a one-stop shop for members’ travel needs. So why should non-members care? Because these clubs are selling deals that are often better than what’s found on popular third-party booking sites like Expedia and Hotels.com. The bargains come attached to yearly dues that range from $45 to $55 for a basic membership, but for many current members, the discounts are worth the fee.
What They’re Selling
When it comes to travel services, wholesale retail clubs maintain the same approach used in-store: Provide everything a consumer could need, from mattresses to beef jerky, and offer it at a discounted price. Peruse the travel services section on the websites of Costco, Sam’s Club or BJ’s Wholesale, and you’ll see their offerings run the gamut from flights and cruises to car rentals and theme park tickets. Sam’s Club even offers deals on vacation rentals and airport shuttles.
But the inventory can be restricted compared to what you might find on other travel booking sites. “We didn’t use Costco for airfare in any of our trips and booked that separately,” said Paige Dawson, a Costco member who has booked several vacations through the club, including trips to Hawaii and Spain. “The air options were more limited in terms of carriers, and also for some of the trips we used miles for either flights or upgrades.”
For Seong Ohm, Sam’s Club senior vice president of merchandise business services, the at times narrow options are the result of the company’s commitment to providing only cost-effective, high-value choices for its customers. “We know members are paying to shop with us. If we can’t show value, we won’t offer it,” Ohm said.
Costco members save 10 percent at Hyatt Hotels (H) and Best Western properties, but beyond those discounts, Costco doesn’t offer much in the way of hotels. Vacation packages — which can include extras like car rentals, breakfasts and resort credits — are Costco’s specialty. For a five-night stay at Aulani, a Disney (DIS) resort and spa, Costco offers a package starting at $1,019 per person (for travel between May 1 and May 31) and it includes a full-size rental car. Compared to a similar search in Februrary on Hotels.com, a five-night trip to the same resort in late May costs $2,070 per room, without the rental car.
Included extras like these were one reason Nick Valente, a five-year Costco member, decided to book his honeymoon in July 2014 to Kauai and The Big Island through the wholesale club. The vacation package he selected included a car rental, daily breakfast, complimentary upgrades and resort credits. For Ohm, who recently booked a three-night stay at Wynn Las Vegas (WYNN) through Sam’s Club Travel, she paid a nightly rate of $210 and received a room upgrade complete with a panoramic view. According to Ohm, that was the lowest price she found when comparing several other booking sites. Indeed, a Hotels.com search for a three-night stay between April 16 and 21 at the Wynn turned up a nightly rate of $399, while Sam’s Club offered a nightly rate of $249, plus two free breakfast buffets.
The prospect of resort credits and vacation add-ons isn’t the only reason members are choosing to book through these retailers. “The prices were exactly the same as all of the other travel sites – I mean, to the last penny,” said Kelly Seiler, who has been a Costco member for eight years and booked a Disney cruisethrough the retailer in 2014. “The reason we went with Costco, though, was because, if we booked through them, we received a Costco gift card.”
In Seiler’s case, she and her family ended up with a $400 gift card, which translated to $400-worth of free groceries for them. BJ’s also offers gift cards for cruise or vacation packages booked through the site, in addition to rebates for hotel reservations. Sam’s Club offers a similar incentive for its members with its TripleDip rewards program. Through the program, members accumulate one point for every dollar spent for booking hotels, airfare, vacation packages, cruises and Hertz car rentals through the club. These points can be used to pay for future hotel reservations.
Aside from inventory limitations, there are a few other compromises you must reckon with if you choose to book through a wholesale retail club. If you reserve a hotel through BJ’s Wholesale or Sam’s Club, you’re not booking directly with the hotel like you would with Costco. As with other travel third-party booking sites, this could pose a problem if you encounter any hiccups with your trip or if you want to change or cancel your reservation. But Ohm notes that Sam’s Club offers round-the-clock customer support and adds that the company is willing to “hand-hold” customers through any unexpected trip snafus. Seiler backs up Costco’s customer service with her own Disney cruise experience: “The travel agents were extremely helpful and I spoke to them numerous times on the phone — I wasn’t just booking blindly on a website.”
Another drawback? Rebates, specifically at BJ’s Wholesale Club. Part of the advertised enticements on BJ’s website are its rebates, but the fact that you have to fill out a form online and wait to receive cash back (up to three weeks after booking) is enough to turn consumers away who would rather reap the benefits immediately upon booking. As with most travel booking sites, there is a hefty amount of fine print to read. Does this nightly rate include the daily resort fee? Are the government taxes, fees and fuel surcharges included in the overall cruise fare? And if you’re a loyalty member with a hotel or airline, you could also be missing out on the opportunity to use or earn frequent flier miles or loyalty points by booking through a wholesale retail club, as Dawson noted above.
Still, even with the potential shortcomings, Seiler, Dawson and Valente are satisfied with their wholesale vacation, responding to the question of, “Would you book another trip this way?” with a resounding “Yes.”
[source : dailyfinance.com]