We've traveled a few times with our nanny. We pay all her travel and hotel expenses. We pay the same hourly rate as we do at for both travel time and "babysitting". Meals are paid for when dining with the family. We have everything spelled out in our contract (but we usually give an "unexpected" bonus just before the trip to help out with expenses). In our experience this works out pretty well.

The most important thing is to make sure that the ground rules are established before you leave for the trip. What activities do you expect the Nanny to do with the kids while you are traveling? Can she invite guests into the hotel/apartment? Will you have established hours, or is she "on call"

I've posted some more detailed information about traveling with a nanny on my website (which is about travel with kids)
http://www.deliciousbaby.com/travel/family-travel-tips/travelling-with-o...

I'll also add that traveling with grandparents or other family can be a less expensive way to get some help (and a break) on a family vacation

Debbie
http://www.deliciousbaby.com