Package providers negotiate bulk rates with airlines and hotels that aren't available to individual bookers, then bundle them together at a combined price. That negotiated rate is where the real savings usually come from — not just convenience, but genuinely lower wholesale pricing passed on to you.
Package pricing is also seasonal and demand-based, just like individual flights and hotels — the same package can cost noticeably more during a destination's peak season or around a major local event, even though the components (flight plus hotel) haven't individually changed much.
One thing that varies a lot between providers: what counts as "included." Some packages bundle only flight and hotel, others add transfers, some meals, or activities. Comparing two packages by price alone can be misleading if one includes airport transfers and the other doesn't — always check the inclusions list line by line before comparing totals.
Because packages are priced as a bundle, changing just one part (say, upgrading only the hotel) sometimes repriced the entire package rather than just adding the difference — worth asking about before assuming a small upgrade will only cost a small amount extra.
