Anatomy of a pennies on the dollar trip

Some people are skeptical of stories of inexpensive travel. In this post, I'll share the details of a recent trip to provide a real-world example of how one can spend $20 per day...or less...on international travel and lodging.*


PRINCIPLES FOR SUCCESSFUL SAVINGS
Before getting into the nitty-gritty, it's worth noting a few guidelines that help minimize expenses while maximizing experiences. While there's no single path to frugal globetrekking, I find the following to be helpful:

• Perfection is overrated. To put a spin on a popular truism, the desire for a perfect vacation is the enemy of a good vacation. With bigger expectations than practical information, it's not unusual for people to delay their plans while they try to create a "perfect" trip. Ironically, that desire for perfection results in quite the opposite...no trip at all! A better approach is to embrace the benefits of a little serendipity.
• Think differently. The planet is made up of roughly 325 territories--most of which we fail to consider when we think of travel. Instead of focusing on popular "bucket list" destinations during a handful of weeks of the year, allow external factors--such as shifts in the global economy, airline price wars, and unusual hotel promotions--to guide when and where you travel. 
• Be flexible. A controlling personality isn't compatible with the serenity of vacationing. Rather than planning every aspect of a vacation itinerary, leave some things to be worked out later. In doing so, you will be less likely to regret missing an experience that you found out about as the travel date drew near.

Combining these principles with travel tips is powerful stuff. A strategy of following promotions and redeeming them in creative ways can lead to travel that is remarkably inexpensive. Skeptical? The recent experiences that follow may address your doubts...

PUTTING A LOW-COST TRIP TOGETHER
After years of travel, I was a little embarrassed that I had yet to set foot in South America. For one reason or another, Asia, Europe, and Africa always seemed to win out over a trip to the Southern Hemisphere.

Flights
In April, I booked an open jaw + stopover award redemption--an effective way to visit at least three cities for the price of one round-trip ticket. Using 60,000 points from my Ultimate Rewards account plus a small amount for taxes and fees, I booked a trip on United Airlines.

Initially, the trip was to Buenos Aires, followed by a return from Rio de Janeiro, with a multi-day stopover in Panama City. However, Brazil had some sort of labor strike going on in their immigration department, so I couldn't get a visa in time. No problem; perfection is overrated...and as a major destination city, adding Rio to a trip the next time I'm in the area should be easy and affordable.

Though just two months remained before the trip was to begin, I was able to find award ticket availability that included a trip to Santiago, followed by a return from Montevideo, while keeping the stopover in Panama City. I had never considered Uruguay before, but had I not chosen to think differently, I would have missed out on an beautiful country that I now look forward to revisiting.

Four countries included in the trip.
Orange lines = paid with points; Red lines = paid with cash.

Cities
The great thing about the updated itinerary was that Buenos Aires is just a few hours from Montevideo, so while I was losing a stay in one country (Brazil), I was gaining two countries (Chile and Uruguay)...all while dropping my visa fees from $160 to zero.

Ultimately, I added day trip excursions in Chile and Uruguay, so the final itinerary included six cities spread across four countries:

• Chile: Santiago (4 nights), plus a day trip to Valparaiso
• Argentina: Buenos Aires (5 nights)
• Uruguay: a day trip through Colonia, and a stay in Montevideo (2 nights)
• Panama: Panama City (5 nights)

Accommodations
As for places to stay, it may sound crazy, but I waited until two weeks before departure until I finalized my plans to visit Buenos Aires...all because I wanted to be flexible.

Last year, IHG's decision to offer a 5-star hotel in Cairo for just 35 dollars worth of points per night (via their quarterly PointBreaks promotion) led me to swap plans to stop in Amsterdam and Brussels for a route that included the pyramids of Giza, and the minarets of Istanbul. This time around, the PointBreaks list included two of the cities in my existing itinerary. By waiting for the promotion's announcement before finalizing my destinations, I was able to book stays in Montevideo and Panama City for $35 worth of IHG points per night, rather than spending twice as much in Ultimate Rewards points (or cash). The 14,400 Ultimate Rewards that I saved are worth $245, and can easily be redeemed for 2 or 3 nights of lodging expenses in the future...saving points is just as good as earning them!

ACTUAL EXPENSES*
Travel and lodging expenses for all six cities totaled $337.40. That includes 16 hotel nights, four flights, a one-way ferry trip, a round-trip bus trip, and a one-way bus trip.

Had I paid cash for all of those services, I would have likely spent about $2,400, or about $140 for each day of the trip. However, by using a points strategy, I paid less than $20 a day.

It could have been even cheaper. Had I chosen to limit my travels to just two cities--whether Buenos Aires & Panama City, or any other pair--so that my award flights covered all travel, the daily average would have been reduced to less than $7.

An itemized breakdown of travel and lodging expenses. By using points, the major expenses for 17 days in 4 countries were just $337.

I'd add that none of the accommodations--neither travel nor lodging--sacrificed quality. All hotels were rated 3 or more stars, and were centrally located in desirable areas close to tourist attractions.

By using the Ultimate Rewards portal to book the stays, I was able to select properties that offered competitive pricing; I did not have to spend any more in points value than I would have wanted to spend with cash. The Ultimate Rewards points redeemed for the first 9 nights had a value of $641...that's $71 per night including tax for great properties that included kitchens and free daily breakfast.

In a nutshell, the Chase Ultimate Rewards program provides smart, cash-free hotel redemption options that one could only dream about using brand-specific hotel rewards programs. It's a basic principle in economics: greater supply within a market tends to lead to lower prices for the consumer.

DUPLICATING THE DEAL FOR YOURSELF

If you aren't already sitting on a stack of points, you might be wondering how long it takes to accumulate enough credit to offset thousands of dollars in travel.

Good news: you can go from zero to dream vacation in just a couple months. As long as you can be responsible with a credit card, paying the balance in full every month, a person can earn thousands of dollars worth of free money to be used to travel the world.

Take the following example. While I used the points listed above in South America (valued conservatively at $1,900), I was wrapping up the final steps to earn over 132,000 points worth around $2,500.

By shifting regular, monthly expenses onto a couple new credit cards, anyone can earn thousands of dollars worth of travel points. Repeat as needed.

Without changing my spending routine, in less than 90 days I earned over $1,800 in Ultimate Rewards, as well as about $700 worth of SPG points that I can use at the newly-merged Marriott / Starwood portfolio of properties.

WHAT'S NEXT?
As the saying goes, "the only thing to it is to do it."

I've got more points than I can spend in a single trip, so I'm shifting from "earning" to "burning". Over the next few months, I'll be looking a ways to maximize the value of the points that I've accumulated.

Even free money isn't free...we have to take the time to pick it up and decide how we want to use it.

Hopefully I've been able to inspire you to do something similar, whether you would like to start traveling "for free", or if you're just looking to get more bang out of your existing travel bucks. Either way, bon voyage!

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* A word about expenses:

Things not includes are meals, airport shuttles, local transportation (metro, bus, and taxi/rideshare), and entertainment. Those things are a matter for personal taste, and the expenses can vary greatly depending on one's preference. 

For example, I spent less than $2 per day to travel all over Buenos Aires on their excellent bus system. However, I could have spent 10 times that if I had chosen to travel by taxi. Likewise, I had some excellent meals that cost less than $5 in the same cities where I also chose to spend around $50 for dining experiences. 

As for entertainment, every city offers amazing things to do that are completely free or just extremely cheap...or one can choose to spend much more...it's all a matter of preference. My recommendation: buy a good guide book and use it to figure out how much or little you would like to spend. 

The takeaway is that it is completely possible to spend as much on transportation and meals as one would have spent staying at home...or one can choose to splurge on higher levels of service while they're on vacation. Since this post is about how cheap travel can be, I've left the matters of personal preference out.