How To Beat Travel Inflation

[Global Rescue]

After two years of limited travel, experts agree revenge travel will win out over inflation in 2022. If you and your family are planning to travel this year, here are some expert tips to help you lower travel costs and get the most out of your budget.

You may have noticed the effects of inflation every time you go to the grocery store — serving sizes are decreasing as prices are increasing. It’s glaringly apparent each trip to the gas station. In May, GasBuddy data, compiled from 150,000 gas stations across the U.S., found the nation’s average gas price is $4.46 per gallon. The national average has not been this high since July 2008, according to AAA.

In fact, since January 2022, families have been paying 7.5% more for the same goods and services they purchased in January 2021. Rising shipping costs and labor rates will continue to accelerate producer prices like never before.

With household spending budgets under new constraints, how will inflation influence 2022 travel plans?

Not as much as you would think. A Credit Karma survey found that 30% of people are getting ready to spend more this summer, and 22% say it’s going to be at least $1,000 more than their typical budget.

Destination Analysts, a travel and tourism market research firm in California, found that 60% of Americans say leisure travel is a high priority.

And a report by Skyscanner found trips are getting longer. As tourism markets in Australia, India, Thailand, Vietnam, and Indonesia reopen, trips 90 days or longer rose by 55%, 60-89 days increased by 80%, and 30-59 days rose by 43%. This trend of longer trips will continue well into December.

“Now more than ever, people want to travel. Many travelers expect to spend extra time or more money — or both — on upcoming vacations to compensate for the two-year pandemic-induced travel moratorium,” said Dan Richards, CEO of Global Rescue, the leading provider of medical, security, evacuation, and travel risk management services and a member of the U.S. Travel and Tourism Advisory Board at the U.S. Department of Commerce.

Tori Emerson Barnes, the U.S. Travel Association’s executive vice president of public affairs and policy, told CNBC: “Our latest data shows the pent-up demand for travel is overshadowing the current inflated prices of travel,” said Tori Emerson Barnes, the U.S. Travel Association’s executive vice president of public affairs and policy.

Revenge Travel vs. Higher Cost of Living​

After two years of limited travel, experts agree revenge travel will win out over inflation in 2022. Home improvement projects, big household purchases (like appliances and furniture), and new car purchases will most likely be cut from the budget first.

It’s not to say travelers won’t trim their vacation expenses as well. The average reported leisure travel budget for the next 12 months is $3,857, which is down from February’s $4,283. If gas prices continue to rise, 58% of American travelers predict they will be taking fewer road trips and 60% will take road trips closer to home.

Worldwide, some countries are more cost-conscious than others. According to research by YouGov, Asian markets are more likely to pick a holiday destination that costs less while consumers in Italy reveal the cost of the trip doesn’t concern them.

If you and your family are planning to travel this year, here are some expert tips to help you lower travel costs and get the most out of your budget.

Airfare​

According to finance company NerdWallet, airfares this year are still lower than pre-pandemic prices. But ticket prices are likely to climb later in the year, Peter Vlitas, executive vice president of Internova Travel Group, said in an interview with TravelAge West.

“Given the rise in fuel and the fact that fares were extremely low in 2020 and even up to now [in 2021], I think there will be a significant price increase in 2022,” said Vlitas, who oversaw airline sales and marketing for 17 years. “What will a consumer do? Will they stay with the mainline carriers? Will they look to connect where it’s cheaper? Will they go to a low-cost carrier? No one really knows.”

Prices may also creep up as the staffing shortage gets tighter. Thousands of pilots retired at the start of the pandemic, and now there aren’t enough pilots as travel rebounds. Many airlines have been forced to cancel flights just before the busy summer season.

Travel Tip: Book six weeks in advance for domestic flights and four months in advance for international flights. Flights are typically less expensive on a Tuesday or Wednesday.