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Americans are embracing the desire to travel this summer despite their tight budgets affected by inflation.
Hopper economist Hayley Berg reveals that Americans are not only booking flights, hotels, rental cars, and vacation homes, but they are also actively seeking deals.
According to the NerdWallet Travel Price Index, the overall price of travel has increased by 16% since 2019.
However, considering the recent decrease in prices and cooling inflation, travelers still perceive it as a good deal. Airfares, for instance, have dropped by 13.4% compared to last year, based on the consumer price index. Car rental prices peaked in July 2021 but have been steadily declining, with May rates down 12.4% year over year.
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According to a survey conducted by The Vacationer, nearly 85% of American adults intend to travel this summer. In addition, over 60% of adults plan to travel for the July 4 weekend.
This year, international travel is particularly popular due to pent-up demand, as it is the first summer without Covid-related travel restrictions.
Americans Utilize ‘Deal-Seeking Behavior’ to Mitigate Inflation Impact
Americans are being resourceful with their expenses. A recent NerdWallet survey of 2,000 American adults reveals that 92% actively seek ways to save on travel.
NerdWallet travel expert Sally French highlights the limited choices individuals face due to inflation. However, when it comes to travel, there are options available to travel affordably.
Hopper users are taking advantage of price-watching features, booking flights during sales, and frequently checking trip and hotel prices. Hayley Berg confirms that despite shorter planning periods, there has been an increase in price comparisons, indicating price sensitivity without a decline in demand.
Berg emphasizes that deal-seeking behavior plays a significant role in facilitating travel.
Strategies for Maximizing Your Travel Budget
If your current financial situation doesn’t allow for travel, here are two alternatives to consider:
- Vacation in late summer or early fall: For international trips, September or October offer approximately 50% savings compared to the peak summer season. Robert Frick, a corporate economist at Navy Federal Credit Union, mentions that fall is an off-peak period, leading to significant price drops in travel. Berg recommends the end of August and mid-week flights for additional savings on international airfare and hotel rates.
- Utilize credit card benefits: While cash prices for hotel rooms have increased, rewards points rates remain relatively lower. This presents an ideal opportunity to use accumulated rewards balances. NerdWallet expert Sally French encourages travelers not to save their rewards and to spend them now. Additionally, considering a credit card with valuable travel benefits, even with an annual fee, can lead to long-term savings. These cards often offer perks such as free checked bags, complimentary hotel nights, travel insurance, and even TSA PreCheck.
If affordable prices are still elusive, it may be beneficial to postpone your bucket-list trip until next year. Robert Frick anticipates a decline in prices as the high demand driven by the desire to overcome the pandemic lockdowns subsides.
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