The travel industry has experienced many ups and downs since the pandemic, but despite high costs, travel still seems to be a priority for many Americans.
2022 was a big year for travel. After a couple years of avoiding travel, people were ready to visit family, have a change of scenery, and use travel vouchers from canceled trips. The trend continued going strong in 2023, despite inflation making travel more expensive than usual.
“Revenge Travel” and Expectations
We expected travel rates to be high in 2022, due to “revenge travel.” After people had to cancel their trips because of the pandemic, 2022 was the year that many of those travelers finally decided to take their vacations.
But because of the high inflation rate, we also expected to see a cooldown on travel in 2023. It’s more expensive than usual to do just about everything, so it would make sense that people would wait before traveling again.
However, that hasn’t been the case. According to a Forbes survey, 87 percent of Americans planned to travel as much in 2023 as they did in 2022, and 49 percent planned to travel even more.
Generally, when times are tough and prices are high, travel is one of those luxuries that people will cut back on. But after years of staying home and missing out on experiences, travel has become even more of a priority for many people.
What has changed?
The cost of travel is still high, except for one key area – airfare. Airfare has actually seen a fairly substantial decrease in prices, coming down 13.2 percent between October of 2022 and October of 2023.
Hotels, on the other hand, have increased 13.3 percent since October of 2019, while food is up a staggering 25.1 percent during the same time period.
In general, the cost of travel has gone up quite a bit across the board over the past four years. But that still hasn’t deterred travelers.
How are travelers funding their trips?
Data shows that while travel is more expensive, people have no intention of staying home. So how are they affording their trips?
According to the Forbes survey, 45 percent of travelers are planning to allocate more of their budget to travel this year. So while they know it’s going to cost more, they’re prioritizing it over other expenses.
Additionally, many people are using travel points and reward credit cards to help fund their travel this year. Half of all travelers reported using credit cards to pay for their trips, and of those cardholders, 66 percent were using rewards cards.
But all of that doesn’t mean travelers are ignoring the higher costs. Of those surveyed, 23 percent of respondents said they’re opting to travel during the off-season to save money, and 21 percent are choosing a more affordable destination.
Ways to Save on Travel
If you’re planning to travel soon, there are some ways you can cut costs and make your trip more affordable. Here are some quick tips to help you save:
- Start monitoring flight prices three to four months before your trip to find the best deal, or use an app that will alert you when prices fall.
- If you plan to travel frequently, sign up for miles, points or other rewards programs to help you save on future trips.
- If you’re traveling with a group, look for an Air BnB or other lodging that will allow you to share your space and split the cost.
- Plan out your trips at the beginning of the year with a budget in mind. You might choose one longer, more luxurious trip over several shorter ones, or vice versa.
Whatever you choose to do, plan ahead so you can scope out the best rates and set aside some money for your travels. Booking sooner rather than later gives you time and options, which means you might be able to find better deals.
Do you need help planning for your financial future? Contact me today to set up a meeting to talk about your goals.