Most Americans (63 percent) are likely to take at least one vacation this summer, although the vast majority (80 percent) are making changes due to inflation, according to a recent Bankrate survey. The most common modifications are:
- Selecting less expensive accommodations and/or destinations (29 percent, up from 22 percent last year)
- Engaging in cheaper activities (28 percent, up from 23 percent last year)
- Traveling for fewer days (26 percent, up from 19 percent last year)
- Taking fewer trips (26 percent, up from 25 percent last year)
- Driving rather than flying to their destination (26 percent, up from 16 percent last year)
I think it’s really interesting that more people are traveling, and that adaptations are also on the rise. It shows that the pent-up demand, which stacked up during the pandemic, still has room to run. Consumers are being practical with their budgets, though. They want to go somewhere, even if it means cutting some corners.
Last summer, we saw a huge increase in travel — especially air travel — as COVID-19 fears and restrictions eased. From Memorial Day weekend through Labor Day weekend last year, the Transportation Security Administration screened 17 percent more airline passengers compared to the same time period in 2021. Prices were high, but many people couldn’t wait to get out after dealing with more than two years of COVID protocols.
The travel industry buckled under the pressure
We found that nearly eight in 10 travelers experienced at least one travel-related problem in 2022, led by high prices, long waits, poor customer service and hard-to-find availability.
The Department of Transportation said that 42 percent more flights were canceled in 2022 than in 2019. Airlines struggled to keep up, even though last year’s passenger traffic was down about 10 percent from 2019.
Now it’s surpassing 2019 levels, which has the travel industry bracing for more trouble. As Axios puts it, “Flying is shaping up to be an absolute nightmare this summer.” After cutting way back during the pandemic, airlines and other travel suppliers (such as hotels and rental car agencies) are still dealing with staffing and equipment shortages. They have been overwhelmed by the surge in demand and haven’t caught up yet.
Interestingly, inflation surged at a faster pace last spring and summer, but consumers seem to be feeling the effects more sharply this year. Part of that is because today’s figures are building off a higher base. Airline fares, for example, rose 24 percent from March 2021 to March 2022, and then another 18 percent on top of that from March 2022 to March 2023, according to the Bureau of Labor Statistics. Hotel costs increased 29 percent and 8 percent, respectively.
There’s a cumulative effect of month after month of higher prices on just about everything, plus the interest rate increases that the Federal Reserve has implemented in an effort to fight inflation. The average credit card rate jumped more in 2022 than any other year since we began tracking rates in 1985. It currently sits at a record-high 20.23 percent.
Still, it’s important to use your vacation time
I don’t mean to be a downer. Paid vacation time is a nice perk, and it’s important to take time off to relax, recharge and enjoy being with family and friends. Some things, like travel prices, delays and cancellations, are out of our control. I was disappointed to see that only a third of Americans who received paid vacation time planned to use all of it last year, and 30 percent thought they would use less than half of their allotted time.
If nothing else, plan a staycation and play tourist in your local area. Our latest survey revealed that 28 percent of likely summer vacationers will do so. But there’s also a good chance you can go somewhere for less money than you think.
Money-saving travel tips
First off, tap into any rewards points or miles that you’ve accumulated. About one in four rewards credit card holders didn’t redeem any of these points or miles last year, our sister site CreditCards.com reports. And about half of U.S. adults have unused gift cards, averaging $175 per person. This adds up to a substantial missed opportunity. Unused rewards and gift cards lose value over time to inflation, and also because people sometimes let them expire, forget about them or (in the case of gift cards) lose them.
Here’s another tip: Let the deal dictate the destination. So often, people do the opposite. They get their heart set on a specific place at a specific time, which seriously limits their ability to save. Let’s say you want to go to a beach this summer (the most popular destination among vacationers we surveyed). If you don’t really care which beach city or town you visit, you can research various options and pick a spot that looks good and perhaps has cheaper flights, hotels, activities and so on.
In general, the more flexible you can be, the better. For example, are you able to travel on cheaper dates? Flights and hotels are often cheaper midweek, so flying in on a Wednesday and back on the following Wednesday might be less expensive than departing on Saturday and returning the following Saturday or Sunday. And a Monday to Friday hotel stay is often cheaper than a Wednesday to Sunday stay, even though it’s the same number of nights. Visiting somewhere during its offseason or shoulder season is always a bargain. And the strong dollar is making international destinations more affordable these days.
The bottom line
It’s not too late to plan a great summer getaway. With some advanced planning and creativity, there’s fun in the sun for any budget.
Have a question about credit cards? E-mail me at firstname.lastname@example.org and I’d be happy to help.