While we’ve been busy counting down the days until summer vacation, something has been steadily creeping up on us– inflation.
As a result, recent studies reveal Americans are re-thinking their COVID revenge travel plans. Rather than sit another summer out, though, many Americans are switching up their vacation destinations.
Here’s the current outlook and a few tips on how to save money on travel.
Inflation Hits the Travel Industry
According to the Consumer Price Index, inflation has soared to 8.5% since last March, a forty-year high. Prices have gone up across the board, including food, energy, goods, and services. How exactly does that impact travel?
- Restaurant prices have gone up 6.9% since last March.
- Gas prices have gone up by 48% since last March.
- Airfare will continue to increase by 7% until at least May.
- The average rate increase for hotels is up 37%.
Some economists are hopeful that inflation has reached its peak. If so, will prices stay steady or begin to decline? That seems to be the critical question as we prepare for summer travel.
Summer Travel Plans Are Shifting
As inflation starts to impact our everyday lives, many people have chosen to cancel or downgrade their travel plans. Destination Analysts reported that 24.7% of Americans have already canceled at least one trip because of rising prices.
Blaine Thiederman, the Founder and Principal Advisor at Progress Wealth Management, told us, “I have several clients that recently changed their summer travel plans due to inflation.”
One client decided to abandon plans to go to Europe because of the airfare and opted to travel domestically. Another family got creative and decided to rent out their home on Airbnb to cover their mortgage and travel expenses while they were away.
Where Are Americans Going on Vacation?
Although travel plans are shifting, Americans are still enthusiastic about finally being able to get away this summer.
According to a recent travel trends report, “Approximately 3 in 4 travelers (74%) are planning to keep their summer trips within the United States, while 26% of travelers are planning international trips this year.”
“When it comes to what international locales are attracting tourists, it’s almost evenly split between Canada and/or Mexico and countries farther abroad.“
Tips for Saving Money on Travel
Create a Vacation Budget
If you’re still planning to vacation despite the current economic conditions, one way to save money on travel is to create a vacation budget. Start by pricing your most expensive items, like accommodation and transportation. Then allocate money for meals, alcohol, souvenir shopping, and activities. For this method to work, though, you’ll need to have the discipline to stick with it.
Redeem Miles, Points, and Rewards
Now would be a great time to use them if you’ve been racking up points, miles, or rewards. Depending on the program, you may be able to get a discounted, or even free, flight or hotel stay. According to a survey done last year, “Americans save an average of $757 per year by using credit card rewards.”
If you don’t participate in these programs, you should consider signing up. Many travel credit cards offer bonus miles or points once you’ve reached a certain spending threshold. As for hotels, once you’ve signed up for their rewards program, you’ll likely find frequent deals and promotions in your inbox.
Check Out Google Flights
The current average cost of airfare has increased by 7%, costing Americans around $330 for a domestic roundtrip. While the average cost for an international roundtrip flight comes in at around $880.
One great price comparison tool available to travelers is Google Flights. Google Flights is a unique search engine that allows you to compile flights from many major airlines all in one place. The website will allow you to search from multiple airports, set up price change alerts, and search for the most affordable destinations from your location.
Get Travel Insurance
While spending money on travel insurance sounds counterintuitive, it’s about protecting your bank account and peace of mind. You don’t want to be stuck footing the bill for a vacation disaster you had no control over. And, with the uncertainty of COVID variants, travel requirements, and flight staff shortages, you never know what might happen these days.
Surprisingly, inflation hasn’t caused as many vacation cancellations as one might have thought. Most Americans are generally excited and enthusiastic about the thought of getting away this summer. Inflation has, however, shifted or influenced travel destinations, with most people vacationing domestically and closer to home.
Whatever you decide to do this summer, stay safe and consider practicing financial responsibility to keep yourself out of trouble!