Will Inflation Disrupt Your Travel Plans for the Summer? was written by Steve Cummings and originally appeared on The Frugal Expat. Steve Cummings is the founder of the personal finance blog The Frugal Expat. As a traveler and expat, he has learned a lot about how to save money, live frugally, and invest for the future. His mission is to help people in saving, investing, and reaching financial independence. It has been republished with permission. Please note that contributing opinions are that of the author. They are not always in strict alignment with our own opinions.
As the pandemic is ending in most of the world, people are starting to get their travel itch. The most problematic part of traveling is the rising costs of everything. Inflation is showing is the scary head, threatening our future travel plans, but should we be worried? Will inflation disrupt your travel plans this summer?
A Washington Post Report brought to the attention that many aspects of travel have been increasing due to inflation. The U.S. Travel Association’s travel price index has shown that prices have risen over 14.4% in October compared to 2020.
In February, the consumer price index rose 7.9% a year ago. The price of everything has gone up, and it is starting to affect the wallets of many people.
One of the most significant factors affecting travel is the price of oil. Throughout all social media, there are memes, comments, and complaints about the rising cost of gasoline. People see these things affecting their wallets, and one way to combat it is to drive less.
Motels and hotels have been among the highest inflation increases known to the travel sector. Last November, it was reported that hotels and motels had prices skyrocket to over 25% from what was seen from a year ago. Is this a good thing?
The Pandemic Factor
The pandemic caused a lot of fear and angst. Prices fell and airlines and travel industries suffered from the lack of income. People stopped traveling, countries shut down, and air travel became so complicated that it left a bad taste in many people’s mouths.
John Horn, professor of Economics at Olin Business school, said about the inflation of prices.
“First, as the economy is recovering from COVID and the shutdown, there has been an increase in demand for things people weren’t buying over the last year due to uncertainty about job future or lack of opportunity — like travel and dining out. As demand increases, so do prices. That’s one driver.”
As the pandemic is ending its rein on fear, there is an increase in demand for hotels, airlines, food, and gasoline. The increased demand is creating an increase in price for many places. As more people want to travel and book places, the price will rise because of the increased demand. When the supply was much higher during the height of the pandemic, you could find deals everywhere.
With the pent-up demand, people seek every opportunity to travel and see places. With this increased demand, you will most likely see prices continue to rise.
When comparing prices, you should not look at the prices you may have seen in 2020. Those prices were much more on discount due to the low demand to travel. It is better to look at the prices that were happening in 2019 to have a better idea of the increases in the travel industry.
Will Inflation Disrupt Your Travel Plans?
Inflation is going to continue to rise for travel. As the world continues to normalize and demand starts to fall, prices will become less of a threat to our wallets. It is necessary to take steps to find better deals and travel cheaper for the time being.
The rise in jet fuel will cause concern for many travelers as they will see flights go up in price.
Delta president Glen Hauenstein said, “We need to recapture somewhere between $15-20 each way on a ticket,”
The airlines expect prices to rise, so it may be prudent to start booking travel sooner rather than later.
There is a possibility that flights may up the fuel surcharges on international flights.
Airlines will do what they can to combat the higher fuel prices, but we too must take action to avoid some of these inflated prices.
3 Ways to Combat Higher Travel Prices
Here are three ways to combat the higher travel prices as you make plans to save money and travel simultaneously.
Start Travel Hacking
Travel Hacking is one excellent tool to allow you to travel cheaper. It is all about opening credit cards, using travel portals to find good deals, and using miles and points to travel for free.
As costs of things rise, you do not want to spend a whole budget just trying to get to one place. There are plenty of great credit cards and strategies that can allow you to accomplish your feat of achieving free travel. You can sign-up for them, hit the bonus, and use those to buy flights through travel partners or travel portals.
Saving money on flights can help offset many of the costs associated with travel. You can continue to travel cheaper without worrying about massive airline travel costs.
Traveling During Off-Peak Times
Traveling during off-peak times can mean having cheaper hotels, cheaper flights, and having a travel destination that is less crowded with tourists.
Steering clear of popular times during the year to travel, such as school holidays, religious holidays, or certain seasonal events, can allow you to find better deals and save money.
If you cannot steer clear of certain holidays, try steering clear of peak travel days. To find some of the best flight deals, try flying on a Tuesday, Wednesday, or Thursday. These days will have fewer people flying, allowing you have found better deals.
Become Financially Responsible
Financial Responsibility is key to saving money and traveling more. As we want to make travel plans for the summer, there needs to be better planning. The prices of many of the items that we enjoy are increasing, but we can create a budget and cut unnecessary spending.
Creating some new financial habits can allow you to travel cheaper, better, and enjoy your experiences more. It starts with making a budget, tracking your spending, and making financial goals to achieve your travel dreams.
Changing habits may not be easy, but making your dreams happen takes a few steps. It can be cutting your going out a budget and using that money to eat while traveling.
Following these three ways to combat the inflation of prices can allow you to have enjoyable travel plans this summer without worrying about inflation.