TribLIVE

| Business

 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Vacations on layaway called the way to go

Email Newsletters

Click here to sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

'American Coyotes' Series

Traveling by Jeep, boat and foot, Tribune-Review investigative reporter Carl Prine and photojournalist Justin Merriman covered nearly 2,000 miles over two months along the border with Mexico to report on coyotes — the human traffickers who bring illegal immigrants into the United States. Most are Americans working for money and/or drugs. This series reports how their operations have a major impact on life for residents and the environment along the border — and beyond.

By Jennifer Waters
Thursday, May 16, 2013, 12:01 a.m.
 

That dream vacation that seems financially unreachable can now be had through an age-old payment method: layaway.

For as little as $100, you can book and start a payment plan for trips almost anywhere in the world.

“Layaway gives people flexibility and the ability to afford a vacation when everyone is watching their pennies,” said Laurie Bowden, vice president of strategic accounts at SearsVacations.com, a division of Sears Holding.

The buy-before-you-pay method has been around since the Depression, another time when credit was tight and jobs were scarce. Retailers have resuscitated the practice since the recession started as a means to encourage consumer spending. Consumers have used it not only to purchase big-ticket items and vacations, but also as a money-management tool.

“It has allowed more people to commit earlier to a trip and to commit more often,” said Marty Seslow, vice president of marketing and sales for Gate1Travel.com. “We are seeing more and more bookings early in the year for trips in September, October and November.”

Gate1 has offered a pay-as-you-go plan for many years, Seslow says, but didn't advertise it as a layaway program until its sales took a big hit in 2009. Since then, business has grown in double digits every year, and Gate1 is tracking bookings 30 percent above last year's record results — an increase Seslow attributes to layaways.

“It empowers the consumer with a little more choice,” he said. About 60 percent of his customers use the plan.

Only a handful of companies offer layaway vacation programs. Gate1 requires a nonrefundable deposit of $100 on most packages, though the payments for cruises and trips to some destinations are considerably higher. Sears Travel looks for 20 percent of the total cost of the trip, while Suzi Davis Travel in the Midwest wants $99 to book the trip. Westside International Travel, on the West Coast, will ask for $100 to $150 per person. Most won't charge you a service fee but may impose a cancellation fee.

The payments generally can be made on any time schedule you want, as long as the final payment is made 30 to 45 days before the trip (sometimes earlier for cruises and international trips). Travelers can book cruises more than a year in advance, but airfares can't be booked more than 11 months in advance. Some companies don't allow airfares on a payment schedule because the prices can change so quickly.

British Airways introduced a layaway vacation package earlier this year that entails a much heftier down payment. For flight-and-hotel and flight-and-car vacation packages between $3,000 and $3,499, a $900 deposit is required at booking. For holidays costing between $3,500 and $3,999, the deposit jumps to $1,050. Full payment is due 10 weeks before departure.

Bowden said she's experienced an uptick in family cruises with layaway plans. “It's not only for the budget-conscious, but it allows families to be flexible for bigger trips,” she said.

Average vacation costs vary widely, from about $1,500 per person, according to a 2012 American Express survey, to Gate1's average of about $2,500 per person. That adds up quickly if Grandpa and Grandma are taking the whole family on a cruise. A seven-day Alaska cruise in July through Gate1 costs roughly $1,600 per person, which includes flights from New York to Seattle. That would set a family of six back by about $10,000, or about $833 a month for a year, not including the down payment.

When spending that much money on a vacation as much as a year in advance — even with the layaway option — it might be advisable to take out travel insurance. That will cost an extra $100 to $149 per person.

Down payments and due dates will vary based on the destination and on the policies of the transport and hotels.

Jennifer Waters covers consumer topics for MarketWatch. She can be reached at jwaters@marketwatch.com.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read Business Headlines

  1. Range Resources cuts workforce 11%
  2. Post-Gazette offers voluntary buyouts in bid to avoid layoffs
  3. United Airlines hack coincided with incursion into government employee data
  4. Muni bond funds stressed
  5. Travelers find direct Web route to Priory’s spirited past in North Side
  6. Voice-assisted technology raises privacy concerns
  7. EPA ordered to ease limits on cross-border air pollution that involves Pennsylvania
  8. Plastics propel Bayer’s 2Q earnings
  9. Gold continues to fall further out of favor with investors
  10. China rebound, Fed statement fuel rally on Wall Street
  11. Fed holds steady on rates