Francesco Ricardo Iacomino | The Moment | Getty Images
Ongoing inflation and higher interest rates have strained many household budgets, and consumers are shying away from some purchases, such as home improvement items or clothing. But millions of American consumers aren’t giving up on their vacations.
A Deloitte survey last month found that 50% of respondents planned to take a summer vacation, including paying for accommodation, up from 46% last year. In a sign of strong demand, the U.S. Transportation Security Administration screened nearly 10 million people over Memorial Day weekend, slightly higher than the same period in 2019 before the pandemic. American airlines It raised its adjusted earnings forecast for the current quarter this week on strong demand and cheaper fuel.
Many travelers are booking tickets or fill in Tank before the road trip, at least compared to last year.
Airfares, for example, were down 0.9% in April from a year earlier, according to the latest federal data inflation read.
However, consumer spending in general has started to slow, but “the strongest category has been the travel category,” said Jason Gaughan, head of consumer credit card products at Bank of America.
location is everything
Prices vary widely, depending on where travelers plan to go. The average fare for a round-trip domestic flight this summer was $306, down 19% from last year but still 6% higher than in 2019, according to the travel website Hopper.
International travel has picked up this year as countries around the world lift pandemic restrictions. But there is still plenty of demand for the domestic destinations that have dominated travel during the pandemic. That’s especially true because airlines have increased capacity to Europe and other international destinations, but bargains can be hard to find during the late spring and peak summer months.
The average fare for a round-trip ticket to Europe this summer was $1,167, up 36 percent from last year, according to Hopper.
Lodging is also more expensive this year, with hotel occupancy averaging 60.6% and an average nightly room rate of $152.68 between January and April, according to hotel data firm STR. That’s higher than the 63% occupancy rate and $130.05 average nightly room rate for the same period in 2019, and above last year’s 58.4% occupancy rate and $141 per night average room rate.
But there are huge differences between some destinations due to changing travel patterns. Nightly hotel rates in Maui, Hawaii, have risen more than 53% since 2019 to $535.90, the largest increase in the U.S., according to STR. Meanwhile, hotel prices in the San Jose and Santa Cruz, California, area dropped nearly 17% from 2019 to $171.52 as business travel in tech and other industries still hasn’t returned to pre-pandemic levels.
money saving strategy
Consumers looking to save money while traveling need to be flexible. Travel experts recommend booking outside of traditional peak times, such as during the fall’s off-season, but there are trade-offs, such as the possibility of worse weather.
Kirby Guerrero, Caribbean travel expert at Raleigh, N.C.-based travel agency Trip and Sip Travel, said some clients may find cheaper northern Caribbean rates and fares to book in September or October, but that’s not the case. There is a risk.
“But a hurricane can ruin your entire vacation,” Guerrero said. She said she would require buyers to purchase travel insurance.
Some travelers also try to be prepared by booking in advance.
“Luxury resorts are booked up to two years in advance,” Guerrero said.
Others forgo some spending elsewhere to pay for travel.
IT Project Manager Pervez Virani, he and his wife said, Property manager Zoha Karmali used American Airlines frequent flyer miles to visit New York City over Memorial Day weekend, but they returned on Wednesday instead of at the end of the weekend to save money.
Virani said the couple had been cooking at home before taking 10-year-old Jordan on the trip to save money on eating out.
“We’re cutting costs domestically,” he said.