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Americans are eager to travel this summer despite inflation-strapped budgets.
“They’re booking flights, hotels, rental cars, vacation homes,” said Hopper economist Hayley Berg. “They are also exhibiting deal-seeking behavior.”
But that still feels like a deal, considering some recent easing in prices as inflation cools. Airfares are down 13.4% since last year, according to the latest figures from the consumer price index. Car rental prices peaked in July 2021, according to NerdWallet, and have been consistently declining. Rates in May are down 12.4% year over year.
International travel is particularly popular this summer, primarily due to pent-up demand, as this is the first summer without Covid-related travel restrictions, Berg said.
Americans are being extra savvy with their dollars this year. More than nine in 10 adults, 92%, say they look for ways to save on travel, according to a recent NerdWallet survey of 2,000 American adults.
“What’s been challenging about inflation is there’s just not a ton of variability in your choices a day,” said NerdWallet travel expert Sally French. “You might be able to go for the organic eggs or the regular eggs.”
“With travel, people do have those options: It’s possible to travel cheaply.”
Hopper users are applying price-watching features, booking their flights when they are on sale and coming back to check the price of their trips and hotels 30% to 50% more than they did pre-pandemic, according to Berg.
“Despite that period of planning getting smaller, they’re checking prices more,” she said. “That tells us that there definitely is price sensitivity, but we’ve not seen a slowdown in demand.”
“I do think it’s the deal-seeking behavior that’s enabling a lot of this travel,” Berg added.
If now is not the best time money-wise for you to take the leap, here are two things to consider:
- Vacation in late summer, early fall. For international trips, consider going in September or October, where you could save roughly half the price compared with the summer high season, said Berg. “Travel prices always decline dramatically in the fall because it’s an off-peak,” said Robert Frick, a corporate economist at Navy Federal Credit Union.
However, if that’s not realistic for families or students for whom the academic year is starting, Berg suggests considering the end of August and flying mid-week. “You’re going to save about $50 a ticket on international flights, anywhere from $150 to $200 per ticket just by buying on those less-popular days,” she said. You can also save on hotel nightly rates if you check in on a Monday and out on a Thursday or skip that Saturday-night stay.
- Leverage credit card benefits. Cash prices have gone up for hotel rooms, but points rates haven’t caught up yet, so this is a good time to take advantage of any rewards balances you have accrued, said French. “Don’t save them,” she said. “Spend them now because typically, they’ll be more valuable this year than even other years.”
Now may also be a smart time to consider a credit card with valuable travel benefits, even if it carries an annual fee. “It can be a turn off to see a credit card that has any $100 annual fee, but the reality is, a lot of these credit cards offer benefits that can save you money in the long run,” French said. Some of these credit cards with airline or hotel brands offer free checked bags, free hotel room nights, travel insurance and even TSA PreCheck.
If you’re still not seeing prices that work, consider shelving that bucket-list trip until next year. Frick sees travel at its peak this year as people are getting over a “claustrophobia hangover” from the pandemic lockdowns. He expects prices to be significantly lower next year as demand wanes.