Remember Mr and Mrs Smug, the couple who ruined your holiday boasting how they’d paid £299 at the last minute to book the same package you booked six months before for £599? Well, increasingly late bookers have far less to gloat about.

Those last-minute prices may look tempting, but often they don’t include the “extras”.

The later you book, the less choice you have - and you're stuck with the leftovers

Discounted holidays with the “too-good-to-be-true” headline prices of £199 are higher when you add on the extras. The big travel companies make buyers of discounted, last-minute deals (ie, bought eight weeks or less before departure) pay for many things you’d consider standard in a normal holiday package. Many companies now penalise late bookers by charging ‘late deal’ bookers extra for airport transfers, limits their luggage to 331bs instead of 441bs, and ration the time and help available from resort reps. These charges and others like them can add, on average, £50 to a holiday’s headline price.

Some of the best deals out there go to early bookers (but you must get your timing right).

A good time to book is when the new travel brochures first hit the shelves (it’s like queuing on the opening day of a department store sale). The first set of summer 2009 brochures were launched back in April, before most people had even taken their summer 2008 break. The second edition will be released in August, so be ready for them. Companies are filling these brochures with deals for early bookers - and being meaner to late ones. For example, there are limited numbers of free child places, and these are often only connected to the first and second editions of brochures. You can also get cheaper group bookings from early brochures (where one person in 10 goes free), and free insurance - as well as the best choice of hotels and flight times.

The later you book, the less choice you have - and you’re stuck with the leftovers.

Late bookers like shoppers on the last day of the January sales, are only going to be successful if they’re flexible. Not everyone wants (or car fit into) tangerine, size-8 Capri pants or is willing to risk being allocated any old hotel on arrival, If you want to fly from a local airport in daylight, stay in an ocean-facing room with a balcony, or travel during school holidays and still get a bargain, book sooner rather than later. This way you avoid rummaging in the end-of-sale bargain bin.

Demand for last-minute deals can outstrip supply, causing prices to shoot up.

This certainly happened in recent years. Packages in July and August went up, on average, £40 above the prices printed in brochures - there simply weren’t enough late deals to go around.

Low-cost and scheduled airlines are now geared up to make late bookers pay extra.

All airlines use sophisticated yield management computer systems to regulate the number of seats sold at the lowest fares. And low-cost airlines such as Transavia, easyJet and Ryanair have limited blocks of seats at the headline fares. So, when you see an offer for £29 per person return, you’ll only get that price if you’re one of the first to book. Week by week, until the flight departs, remaining ticket prices will go up. Airlines work on the principle that those who book last are the most desperate to get away and can pay accordingly.

A Ryanair spokesman says: To get the best prices, it helps to book at least three weeks in advance. People flying at the last minute will pay much more.

Wait too long to book a flight and it could end up costing you hundreds of pounds more. So, in short, plan ahead and next time you swap notes on prices with somebody, chances you’ll be the smug one!