Recently there has been a lot of talk around a method of saving on airfares called "Hidden City Ticketing". Whilst Hidden City Ticketing can save money, there are a number of catches when it comes to using it - catches that can cause extreme difficulties and extra cost if they are not fully understood.
If you are considering using Hidden City Ticketing then I would suggest reading and fully understanding the details below before you do to avoid getting badly burnt...
So What Is It?
Lets say you wanted to fly from St Louis (STL) to Atlanta (ATL).
Only one airline flies that route directly - Delta, as Atlanta is one of their hubs. Other airlines will of course allow you to fly from St Louis to Atlanta, but they will require you to have a stop somewhere. For example, with American Airlines you will need to fly via Charlotte, or with United Airlines via Chicago (ORD)
In a simplistic world, airlines would just charge for their flights based on the distance of the flight - but we all know that's not how airline prices work.
From a pricing perspective, Delta has the ability to charge a price premium for this flight. The passengers have the advantage that they don't need to have a stopover anywhere, and thus will arrive earlier - and thus they will likely be able to charge more for that flight. Thus if Delta was to charge $200 for that flight, United and American might need to charge $150 in order to get passengers to fly their more roundabout, and longer, routing.
But what if you don't actually want to go from St Louis to Atlanta, but you actually want to go to Chicago? This is a similar situation as above, only reversed - Delta don't fly that route directly (only via Atlanta), whilst United Airlines and American have direct flights. This time UA and AA get to charge the premium price (lets say $200 again), whilst Delta have to discount (say $180) in order to compensate for the stopover.
So now you've got 3 options for flying from St Louis to Chicago.
You can fly on United, and pay the $200 fare
You can fly on Delta, via Atlanta, at the discounted $180 fare
Or, you could book a ticket with United to fly from St Louis to Atlanta via Chicago for $150, but simply get off the plane in Chicago and not board your connecting flight!
Option 3 is what is known as "Hidden City Ticketing - you've purchased a ticket from St Louis to Atlanta, but your real destination is the "hidden city" along the route, Chicago!
You've managed to get the best routing (direct, with no stops!) for a price that was even cheaper than the indirect route with a stop. Not surprisingly the airline isn't going to be too happy with you as you've managed to get a flight they wanted to charge you $200 for, but only paid $150 for it - but what can they do, right?
The Downside of Hidden City Ticketing
Turns out, there are a number of things they can do - and some of them can end very badly for you.
The first thing most airlines will do when you fail to board a flight is that they will cancel the rest of the flights on your itinerary - including any return flights. In your efforts to get a cheap STL-ORD return flight you actually booked STL-ORD-ATL, then ATL-ORD-STL on the same booking, then the moment you fail to board your ORD-ATL flight they will cancel not only that flight (which you never intended to take anyway!), but also the ATL-ORD-STL flights for the return - leaving you stranded in Chicago with no return flight (and no refund!)
The workaround for this is fairly simple - book everything as a one-way flight - with your outbound and return trips on separate bookings. This can sometimes change the pricing dramatically (airlines often charge more for one-way flights than for returns), but it's really the only option.
This rule also means that you must be flying TO the hidden city, not FROM it. If you're trying to fly from Chicago (ORD) to St Louis, then booking ATL-ORD-STL won't help you as once you fail to board the ATL-ORD flight the airline will cancel your ORD-STL booking as well!
When you check bags for a flight, the airline will automatically send them to your final destination. If you fail to board your second flight, one of two things will happen
For domestic flights in the US, your bags will carry on to the final airport - even if you don't. As a result, if you checked bags for your STL-ORD-ATL flight but didn't go beyond Chicago, your bags will still fly to Atlanta - and then it'll be your responsibility (and cost!) to get them back. You can't expect any sympathy from the airline here, as they will likely know exactly what has happened...
For most other flights, there are laws that if you fail to board your flight then your bags must be removed. Whilst this does mean your bags will stop in the intermediate airport (Chicago, in our example - even though that's not technically relevant as this would be a US domestic flight), in doing so the airline will have had to delay the flight to remove the bags - at a real cost to them, and an annoyance to everyone on the flight. As a result, they are not going to do you any favors in actually getting your bags back to you, and at a minimum you can expect to be in for a significant delay whilst they do so.
So to put it simply, you can't check bags when using hidden city ticketing - but can only travel with carry-on bags.
If you travel light this might not sound like a big disadvantage, but there are countless things that can go wrong. If the airline decides your bags are too large/heavy, or if the plane runs out of space in the overhead bins, then you might be forced to check your bag even if you don't want to. At best, you will need to be very careful to make sure that this doesn't happen.
There used to be a workaround for this issue, which was known as "short checking", where the airline would allow you to check your bag only as far as an intermediate airport. Thus even though you were (apparently) flying to Atlanta, you could ask them to only check your bag as far as Chicago. In recent years most airlines have removed the ability to short check a bag - mainly because people were using it as a way to get around the baggage problem with hidden city ticketing! Whilst you can still ask, it's an almost certainty that you will be refused.
IRROPS (short for IRregular OPerationS) is airline speak for something going wrong. It could be a flight being canceled or delayed due to bad weather, a mechanical issue, or even an oversold flight that they need to move passengers off.
When you buy a ticket from St Louis to Atlanta via Chicago, the airlines obligation is to get you to Atlanta. There is no requirement for them to actually fly you on the route you've originally booked - although obviously they generally would if everything is going to plan.
If your St Louis to Chicago flight is cancelled, the airline might simply move you to a later flight on the same route - or they might move you to a completely different routing - such as St Louis to Newark to Atlanta, or even move you to another airlines flight such as putting you on the direct Delta St Louis to Atlanta flight.
Of course, as you were actually only headed to Chicago this leaves you with a problem - but it's one that you really can't do much about! Whilst you can certainly ask to be moved back to a St Louis->Chicago->Atlanta routing, there's absolutely no requirement for the airline to comply, and even if they do they will likely give you far lower priority than any passengers actually booked to Chicago so it could be hours or even days before you can actually get on a flight!
For the most part, there is nothing illegal about using Hidden City Ticketing. It is generally against the contract you have with the airline (the one that came along with your ticket but which of course nobody ever bothers to read!), most of which state that you can't buy a ticket you don't intend to fly. Of course, it's near impossible for the airline to prove you never intended to take the second flight (and didn't simply change plans halfway through), so unless you become a serial offender you're likely not going to have problems there.
That said, there are situations where there could be legal implications when travelling internationally. For example, say you had bought a ticket from the US to New Zealand via Australia, with an intent to stay in Australia. As you were booked as a transit passenger through Australia, the various Australian Arrival taxes would not have been paid with your ticket, as these are not changed for transit passengers - but they would be due as you are no longer transiting to New Zealand. This could potentially cause difficulties for either you or the airline.
Another issue that can occur with international itineraries is that of visa requirements. For example, it's not uncommon to find cheap hidden city flights from the US to Europe, with Russia being the final destination (for example, San Francisco -> Paris -> Moscow).
However in order to be allowed board even the first leg of this flight, you will need to have a visa for the final destination - Russia. It doesn't matter that you are planning to only fly only as far as Paris, you will not be allowed board the plane in San Francisco without a Russian visa.
One of the few routes where you can generally avoid the issues above are some international flights, connecting to a domestic flight, where your real destination (the hidden city) is the first point of arrival from the international flight.
For example, say you want to fly from Singapore to San Francisco. Adding an additional flight to somewhere in the US could cause the price to drop (eg, Singapore -> San Francisco -> Reno)
As is the case in many (but not all!) countries, the US requires you to collect your bags at the first point of entry into the country - in this case San Francisco. Despite the fact your baggage is tagged all the way to your final destination, you would normally need to collect it in San Francisco and then give it back to the airline for your connecting flight - but in general there is nothing stopping you simply taking your luggage and leaving the airport.
However even then you need to be careful as the rules can and do vary from country-to-country, and even airport-to-airport. For example, whilst it's possible to do what is described above in San Francisco, it is NOT possible at Washington Dullas airport, as connecting passengers (and their bags) are sent to a separate immigrations/customs area where there is no choice but to re-check your bag!
So Is It Worth It?
Obviously different people will have different answers to this, but in my opinion, Hidden City Ticketing is NOT worth the effort or trouble it can cause. Yes, there is the opportunity to save some money, but in most cases the risk of something going wrong outweigh the potential savings.
If you know you'll be travelling with only a small amount of carry-on luggage (ie, something that can fit under the seat in-front of you), on a route that has a low chance of IRROPS/delays, and are willing to fight to get what you want if something does go wrong, then it might be worth your effort - but in most cases the potential for problem outweighs the advantages.