Wordpress - dbDelta not creating tables

From WordPress-codex about dbDelta:

The dbDelta function examines the current table structure, compares it to the desired table structure, and either adds or modifies the table as necessary, so it can be very handy for updates (see wp-admin/upgrade-schema.php for more examples of how to use dbDelta). Note that the dbDelta function is rather picky, however. For instance:

• You must put each field on its own line in your SQL statement.
• You must have two spaces between the words PRIMARY KEY and the definition of your primary key.
• You must use the key word KEY rather than its synonym INDEX and you must include at least one KEY.
• You must not use any apostrophes or backticks around field names.

With those caveats, here are the next lines in our function, which will actually create or update the table. You'll need to substitute your own table structure in the $sql variable.

I changed your sql: "create table $packagetable (

To this: "CREATE TABLE " . $packagetable . " (

Here is a working copy of your code:

global $booking_db_version;
$booking_db_version = "1.0.0";

function booking_install() {
    global $wpdb;
    global $booking_db_version;
    global $tableprefix;
    $installed_version = get_option('booking_db_option');

    $tableprefix = $wpdb->prefix . 'booking_';

    require_once(ABSPATH . 'wp-admin/includes/upgrade.php');

    if ( $installed_version !== $booking_db_version ) {
        // Create table for packages 
        $packagetable = $tableprefix . 'packages';
        $sql = "CREATE TABLE " . $packagetable . " (
            id INT NOT NULL AUTO_INCREMENT, 
            name TEXT NOT NULL, 
            description TEXT NOT NULL, 
            city1 TEXT NOT NULL, 
            city2 TEXT NOT NULL,
            PRIMARY KEY  (id)
        ) ". $charset_collate .";";
        dbDelta($sql);

        // Create table for hotels 
        $hoteltable = $tableprefix . 'hotels';
        $sql = "CREATE TABLE " . $hoteltable . " (
            id mediumint(9) NOT NULL AUTO_INCREMENT, 
            name text NOT NULL, 
            city text NOT NULL, 
            price decimal(10,2) NOT NULL,
            PRIMARY KEY  (id)
        ) ". $charset_collate .";";
        dbDelta($sql);

        // Create table for addons 
        $addontable = $tableprefix . 'addons';
        $sql = "CREATE TABLE " . $addontable . " (
            id mediumint(9) NOT NULL AUTO_INCREMENT, 
            name text NOT NULL, 
            addongroup text NOT NULL, 
            price decimal(10,2) NOT NULL,
            PRIMARY KEY  (id)
        ) ". $charset_collate .";";
        dbDelta($sql);

        // Create table for addon groups 
        $addongrouptable = $tableprefix . 'addon_groups';
        $sql = "CREATE TABLE " . $addongrouptable . " (
            id mediumint(9) NOT NULL AUTO_INCREMENT, 
            name text NOT NULL, 
            perhead text NOT NULL,
            PRIMARY KEY  (id)
        ) ". $charset_collate .";";
        dbDelta($sql);

        update_option('booking_db_version', $booking_db_version);
    }
}
register_activation_hook(__FILE__, 'booking_install');