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Francesco Riccardo Iacomeno | moment | Getty Images
Persistent inflation and rising interest rates have strained many household budgets, and consumers are turning away from certain purchases such as home improvement projects or clothing. But millions of American consumers don’t give up on their vacations.
A Deloitte survey from last month found that 50% of respondents planned to take a vacation that included paid accommodations over the summer, up from 46% last year. In a sign of strong demand, TSA screened nearly 10 million people over Memorial Day weekend, just over the same number in pre-pandemic 2019. And American Airlines This week it raised its adjusted earnings forecast for the quarter, thanks to strong demand and cheaper fuel.
Many travelers see some relief when booking airline tickets or filling up The tank is ahead of a wild ride, at least compared to last year.
Airfare prices, for example, fell 0.9% in April compared to a year ago, according to the latest federal release. Read inflation.
However, consumer spending is starting to ease overall, but “the categories that are holding up the strongest are travel categories,” said Jason Gaughan, head of consumer credit card products at Bank of America.
Location is everything
Prices vary greatly depending on where travelers plan to go. The average domestic round-trip airfare was $306 this summer, down 19% from last year, though still 6% higher than it was in 2019, according to travel website Hopper.
International travel picked up again this year as countries around the world lifted restrictions imposed during the pandemic. But domestic destinations, which have dominated travel during the pandemic, are still in high demand. This is especially true because airlines have boosted their ability to fly to Europe and other international destinations, but it’s hard to find deals during the late spring and summer rush hour.
Hooper’s data showed that the average cost of air travel to Europe was $1,167 round-trip this summer, up 36% from last year.
Lodging has also been more affordable this year, even within the U.S. Hotel occupancy averaged 60.6% from January though April, with average overnight rates of $152.68, according to hotel data firm STR. This is up from 63% occupancy and average nightly rates of $130.05 during the same period in 2019, and up from 58.4% occupancy and average nightly rates of $141 last year.
However, there are vast differences between some destinations due to changing travel patterns. Overnight hotel rates in Maui, Hawaii, are up more than 53% since 2019 to $535.90, the largest percentage increase in the United States, according to STR. Meanwhile, hotel rates in the San Jose and Santa Cruz, California areas fell nearly 17% from 2019 to $171.52 as business travel in tech and other sectors did not recover to pre-pandemic levels.
Money saving strategies
Consumers looking to save money while traveling need to be flexible. Travel experts suggest booking outside of traditional peak periods, such as the fall shoulder season, though there are trade-offs, such as the possibility of bad weather.
Some clients may find cheaper fares and bookings in September or October for the Northern Caribbean, but that comes with risks, said Kobe Guerrero, Caribbean travel specialist with Trip Wasp Travel in Raleigh, North Carolina.
“But then you might have a hurricane that ruins your whole vacation,” Guerrero said. She said she would require buyers to have travel insurance.
Some travelers also try to prepare by booking ahead of time.
“Luxury resorts get booked a couple of years in advance,” Guerrero said.
Others forgo some spending elsewhere to pay for flights.
Parvez Virani, IT Project ManagerAnd He and his wife saidAnd Zoha Karmali, the property manager, used American Airlines frequent flyer miles to visit New York City over Memorial Day weekend, but saved money by going back on a Wednesday instead of at the end of the weekend.
Virani said the couple had been cooking dinner at home to save on eating out before their trip with 10-year-old Yorkie, Jordan.
“We’re cutting costs at home,” he said.
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