Vacations are expensive now, but you can spot ways to save
More than two years into the pandemic, vacationers are making travel plans with renewed zeal. But because of a number of economic, logistical and geopolitical issues, a summer getaway will come at a steep, painful price this year.
Crowds are driving up demand as travel companies continue to deal with labor shortages. Fuel prices set record highs and have fallen only slightly. Rental car shortages persist. And inflation is hitting every part of a traveler’s budget.
“You’re going to be in for some sticker shock,” warned travel analyst Henry Harteveldt, president of
Atmosphere Research Group.
Sally French, a travel rewards expert at NerdWallet, has been analyzing the impact of inflation on common travel expenses – including rental cars, hotels, food and entertainment such as movies and concerts.
“Definitely every single category is more expensive now than it was this time last year,” she said.
Here’s a breakdown of where travel expenses stand, what people should expect as they plan summer trips and how they might save a few bucks.
FLIGHTS: UP 12.7% FROM FEBRUARY 2021
According to consumer price index data released by the Bureau of Labor
Statistics, airline fares were up 12.7% in February compared to the previous year, but down more than 14% compared to 2019.
“People have short-term memories,” French said. “They just remember ‘Last year, I got this awesome flight deal.’ ”
At the beginning of April, travel booking app Hopper said domestic airfare was averaging $330 for round trips, which is 40% higher than at the start of the year. For international trips, the average was
$810, up from $650 at the beginning of the year.
The company expects those prices to keep rising, forecasting domestic airfare to reach $360 for a round trip through May.
International airfare is expected to peak at $940 in June.
Hayley Berg, head of price intelligence at Hopper – which uses different data than the Bureau of Labor Statistics – said its calculations show domestic airfare is even higher than pre-pandemic figures: up from 2019 by 7%.
Harteveldt said several factors are pushing prices up this year, including strong demand, the higher price of jet fuel and trimmed capacity.
“Airlines have been very clear that they intend to not only raise prices, but take other actions to help them recoup most of the higher energy prices they’re paying,” he said.
Budget advice: Harteveldt said new low-cost airlines such as Breeze Airways or Avelo Airlines could provide lower fares than their competitors if their routes match a traveler’s needs. He suggested looking for deals that bundle airfare and lodging in a package, which can lower the total price of a trip. For those with trip flexibility, there is the option of putting off a summer trip to the less-expensive earlyfall season.
Berg said travelers also might want to opt for international trips with a lower price tag, choosing Mexico or Central America over Europe to save several hundred dollars.
“If travelers are willing to reconsider their destinations, they can spend less than they have in previous summers even though prices are higher,” she said.
HOTELS: UP 40% FROM MARCH 2021
Travel research firm STR said the average daily hotel price in the United States between March 1 to 26 was $147.15. That is significantly higher than the same time last year, when average rates were nearly $105, and higher than 2019, when the average nightly stay was $132.56.
Carter Wilson, STR’s senior vice president of consulting, said last summer was already recordbreaking. He said labor shortages and higher wages are also pushing rates up this year.
“Any kind of destination that normally caters to leisure demand did phenomenally last summer,” he said. “That has kind of continued unabated.”
Budget advice: Wilson said higher prices won’t be spread around equally, especially as business travel takes longer to recover.
“If you’re looking to stay in a major urban market at a convention center hotel, that’s going to be more reasonable to find a room at than a resort,” he said. “Those urban cores that rely on international demand and major conventions and business demand are still trying to make inroads.”
Harteveldt said travelers are better off shopping directly on hotel brand websites rather than pricecomparison sites because that’s where they’ll find discounts for things such as membership in AAA.
AIRBNB AND VRBO: UP 13% FROM FEBRUARY 2021
Short-term rentals are also commanding higher rates, according to AirDNA, which tracks the performance of millions of properties on Airbnb and Vrbo. The company said average daily rates in the United States in February were nearly $273, up 13% compared to last year and 32% from 2019. In late March, AirDNA said summer rates so far were about 5.5% higher than last year.
Budget advice: French recommends people take advantage of a kitchen or kitchenette so they can grab food at a grocery store and avoid eating at a restaurant for every meal.
RENTAL CARS: UP 19% FROM MARCH 2021
In mid-March, Hopper said rental cars had been averaging about $83 a day, up 19 percent from the same time in 2021. Industry watchers expect to see demand surge – and prices follow – this summer.
“The current situation is that rental car companies will still be charging higher prices simply because the supply has not met the demand,” Mike Taylor, head of the travel and hospitality practice at J.D. Power, told The Washington Post last month.
Budget advice: Considering the cost of rental cars and gas, French said she might avoid a road trip this year. She suggested flying to a destination with good public transportation instead. But if someone must have a rental car, she and other experts recommend searching for that first to avoid any unwelcome surprises around price or availability.
“Book the rental car first because that’s going to be the most surprising part of your trip,” she said.
GAS: UP 45% FROM APRIL 2021
According to AAA, the national average price of a gallon of regular unleaded was just over $4.16 on Wednesday, compared to about $2.87 a year ago. Prices have ticked down in recent weeks after reaching record highs in March, but gas is still potentially a major line item in summer road trip budgets.
Budget advice: Road trippers should take advantage of apps such as GasBuddy or tools such as Waze and Google Maps that can locate cheaper gas. Costco members can also purchase the chain’s discounted fuel.
CRUISES: NOT SAILING AT THIS TIME LAST YEAR
The world’s largest cruise operators have said that they are seeing strong prices – in some cases, higher than 2019 – in the second half of 2022. U.S. cruises weren’t even sailing at this time a year ago; they started to return last summer after suspending operations for more than a year because of the pandemic.
David Crooks, senior vice president of product and operations for cruise seller World Travel Holdings, said in an email that cruise prices this year and next still look like a good deal because of “significant increases in landbased alternatives.”
“With the CDC lifting its Travel Health Notice for cruises, a strong pent-up demand, and stringent cruise line health protocols combined with low pricing, consumers are recognizing the value of cruising, and demand is coming in very strong,” he said.
Budget advice: Booking in the fall instead of peak summer dates in the Caribbean will save money (but will also mean taking a cruise during the historically busier part of hurricane season). A seven-day Eastern Caribbean cruise on a new Carnival ship, for example, costs $1,169 a person for a balcony room when it departs on July 10. When the ship leaves for the same itinerary on Sept. 24, a balcony room is priced at $839 per person.