By Dawn Gilbertson

You can't toss a vacation package into your cart during a Costco run. No one in a hairnet is offering samples of Caribbean cruises. The only in-store indication the retail juggernaut sells travel is a rack of blink-and-you'll-miss-it brochures near store exits.

So it's no surprise that Costco Travel is hardly a household name. I regularly encounter travelers who have no idea you can book a vacation through Costco, let alone a Seabourn cruise, Ritz-Carlton resort or European adventure. (I even booked a work trip to Hawaii last year because the deal was unbeatable.)

But sleeping on their deals could cost you.

Costco Travel started small 25 years ago and has become a major force in the competition for your vacation dollars. It has more than 800 in-house agents, 13 buyers and five call centers. The travel brochure it publishes three times a year now runs close to 80 pages. There are even more choices online, plus last-minute specials.

The famously private, publicly traded company reveals scant details about the size of the business and skips trade-magazine travel-agency rankings. But executives revealed this nugget during an earnings call last week: U.S. Costco members booked more than $100 million in travel in the five days after Thanksgiving, up 12% from a year ago. Annual gross bookings run in the billions, executives told me in a rare interview at the company's Issaquah, Wash., headquarters.

Costco is no Expedia or Booking.com. Those sites generate about 10 times the monthly website traffic of Costco's 5 million visits, according to data firm Similarweb. And those giant online agencies offer everything a traveler could want from airline tickets to hotels around the world at every price point.

Staying selective

Costco has a limited but ever-growing lineup, the same selective strategy it uses when selecting items for its warehouses.

It only sells airline tickets as part of a package and then not every airline (no Southwest, for example.) It offers rental cars through four providers: Alamos, Avis, Budget and Enterprise.

You can book vacation packages in Hawaii, the Caribbean, Mexico, Florida, Las Vegas and other destinations, but only at select resorts. And you have to be a Costco member, of course.

"We know who we are. We know what we do well," says Chris Hendrix, assistant vice president and general merchandise manager of Costco Travel.

And what Costco Travel does well is negotiate vacation values for its 135 million members, many of them with plenty to spend on travel. It focuses on deals and perks in places it can score them.

My six-night hotel and rental-car package in Maui over Thanksgiving last year cost $2,031, minus airfare, and included daily breakfast for two, a daily $50 resort credit and the resort fee. I'm a direct booker most of the time, but that couldn't be beat.

Many Costco bookings also include a Costco gift card for use after the trip. Costco knows that money, and likely more, is going back into the store when travelers redeem the cards.

Sandy Georgitsis and her husband stock up at Costco once a month and always bring home a $4.99 rotisserie chicken for dinner. But she was skeptical about booking a vacation through Costco when family members recommended it for a 10-day anniversary and milestone birthday trip to Hawaii last year.

"The price was jaw dropping. I honestly couldn't believe it," she said. The couple paid $4,300 for two, including flights from Chicago, a rental car, a beachfront hotel and all taxes and fees.

She now tells friends to book trips there and is eyeing a Costco package to Europe.

Jon Bortz runs a company that owns hotels across the country. He admits to being both skeptical and intrigued at the idea of selling some rooms through Costco. The ultimate selling point: Only Costco members have access to any deals it cuts, and they have money to spend on vacations.

"We don't use them all the time, but we use them a good bit," says Bortz, chairman and chief executive officer of Pebblebrook Hotel Trust. "They drive a lot of business."

Starting small

Costco got into the travel business with an acquisition of a small vacation-package wholesaler called Pacific Escapes in 2000. It was a test.

"Can we do this in Costco fashion?" says Pat Callans, executive vice president of administration for Costco Wholesale. "Can we do this in a way that is going to really add value and members are going to like it?"

They did. Costco Travel got its own website in 2009. Beach trips led to car rentals and cruises.

Just don't call it your typical online travel agency. Costco says it mainly sells vacations because its members like to travel and satisfied members renew and upgrade their memberships, maybe even sign up for the Costco credit card. Memberships are Costco's lifeblood, bringing in $5.3 billion of its $275 billion in annual revenue but the bulk of its profits.

Kathy Robinson, who joined Costco Travel in 2004 and now runs it, says she ends every new-employee orientation by drilling home the importance of member satisfaction.

"We are lucky that we get to sell travel; that's the best job in the world," she tells them, but that's not job No. 1.

Travel agency or not, Costco has grander travel ambitions. It still drives executives nuts when people, even self-described Costco fanatics or members of their own extended families, don't turn to Costco for travel.

Callans says he books car rentals through Costco all the time and preaches the savings to anyone who will listen, most recently his siblings in Chicago.

I, too, have been recommending Costco as the best place for rental cars for more than a dozen years. Just last week a friend saved $200 on a last-minute holiday reservation in Phoenix.

I'd go so far to call it the hot dog of Costco Travel, something that gets you in the door and breeds loyalty.

"I don't know that I would make that comparison," Callans says, laughing. "That means you can't change the price on it ever."

He prefers to call car rentals a good introduction to Costco Travel, a calling card. In addition to low prices, travelers who book cars through Costco don't need to use a credit card to reserve the rental, and the fee for an additional driver is waived.

Beth Kinerk, senior vice president of global sales for Avis Budget Group, says Costco is one of the car-rental company's top partners. Costco members tend to book more premium cars and rent them for longer.

"I want more and more people to find out about Costco," she says.

Arlene Haggar, a lab technician for a New Jersey school district, is already sold. She stumbled across Costco Travel about a decade ago from one of those brochures by the exit and has booked several trips. Last year, she and her husband plunked down nearly $7,000 for a Costco package to Paris and Amsterdam.

She strayed for recent trips to Iceland and Tenerife, Spain, because Costco didn't have what she wanted but is back and shopping for a Europe trip for spring break next year. Some friends are still perplexed.

"When I tell them I book a trip through Costco, they say, 'Oh really, they do that?'"

Yes, yes they do.

Write to Dawn Gilbertson at dawn.gilbertson@wsj.com

(END) Dow Jones Newswires

December 16, 2025 20:00 ET (01:00 GMT)

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