Inflation is impacting virtually everything we spend our money on. Groceries and gas have been hard hit and so has the cost of travel. These rising costs can be a challenge in planning your summer vacation and other travel during the year.
Rising travel costs
Two areas that have shown among the highest levels of price increases in recent months are car rentals and lodging. Perhaps surprisingly, airfares in most cases are still at or below pre-pandemic levels. Even here the news is not all great as airfare costs are up double digits compared to the same period in 2021.
Other travel related areas that have seen price increases are restaurants and many entertainment venues. And of course, driving vacations will be more expensive due to the rising cost of gasoline.
A side impact of inflation are cutbacks or “shrinkflation.” This refers to things like some hotels cleaning rooms less often or only if the guest specifically requests the room be cleaned. There may be fewer towels in the room than in the past. Lobbies and public areas are typically unchanged, but the hotels are subtly cutting back on these other types of amenities to save money.
Staffing issues can also come into play not only with hotels but with airlines and other travel related industries. In the case of airlines, travelers may notice a greater use of automation such as chat boxes in customer service where they could more easily speak with a human in the past.
Travel demand is robust
Despite any inflationary issues, demand for travel remains robust. According to recent data from travel site Kayak, online searches for domestic flights were up 78% over a year ago and searches for international flights were up 140%.
After being cooped up at home for the better part of two years, people want to get back out there. Jack Johnson, Senior Vice President, Investments in Wedbush Securities Los Angeles office says, “Over the last couple of years due to the pandemic most of us put all, if not most, of our travel plans on hold. When planning a vacation, you will see that a lot of items have become more expensive due to inflation. I am recommending to clients to take into account that they spent little to nothing on travel and leisure over the last couple of years.”
He adds, “Keep in mind that the cost may have gone up, but you have not been spending this money over the last two years, so you were forced to save up for this trip. If you look at it from a long-term perspective, you probably are still way ahead. Now, go out there and explore and have some fun.”
How to budget and plan for your summer vacation in the face of rising costs
You can’t do anything about rising costs and travel inflation, but you can help minimize the impact on your plans by doing some upfront planning. Here are a few things to consider.
- Plan ahead. Often booking hotels and other aspects of your trip in advance can save you money. A related consideration is supply and demand. If you wait until the last minute to book a hotel, your choices will likely be limited in many locations. All that might be left are the higher priced rooms.
- Book directly with the hotel, they will often be more flexible if you need to change your travel plans, including dates of stay, at the last minute. You want to avoid change or cancellation fees to the extent possible.
- Buy tickets early for flights. They can increase as the dates near and you might run into reduced availability to popular destinations.
Besides a destination vacation, why not look at a “staycation” this year? If you live in a big city like Los Angeles, New York or Chicago, when was the last time you explored all of the neat things to do in your own city? Museums, live events, great restaurants and interesting neighborhoods are just some of the activities you can consider in these and many other cities around the county.
If you live near areas that offer outdoor activities like hiking, get out and explore. You will get an escape from your daily routine and get some exercise too.
A staycation is a great way to spend time with your kids and open their eyes to where they live. Even adults without kids can have some great experiences this way. You eliminate the costs and hassles of traveling someplace and you will still have a lot of fun. Maybe go away next year when things hopefully settle down a bit in terms of cost and demand.
Whatever you decide to do this summer and for the rest of the year in terms of a vacation, planning and flexibility are keys to a successful vacation. Whatever you decide, take the time off and enjoy yourself, you deserve it.
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