Inflation and airline schedule disruptions are grabbing plenty of news headlines. But travel statistics show it’s not impacting travel plans as severely as you might think.
By Labor Day, U.S. airline travelers returned to the skies at more than 98% of pre-pandemic levels, according to the Transportation Security Administration. Drivers hit the road for the Fourth of July in record numbers, according to AAA, despite high gas prices. The global vacation rentals marketplace saw a 60% uplift in searches for vacation rentals for the summer season and a 9% increase in the average length of stay.
Savvy travelers are finding ways to trim travel expenses to manage budgets. Three in five travelers (61%) will reduce the amount of money they spend on eating out before cutting back on holidays and travel. According to Skift, they’ll do the same during travel: eating out less and choosing cheaper alternatives for their transportation and accommodation.
According to the Global Rescue Travel Safety and Sentiment Survey, most travelers (79%) report inflation won’t change their plans, but 21% say it will. Their trip adjustments include traveling for fewer days (21%), flying on less expensive plane tickets (19%), staying at less costly hotels (15%), eating out less or at less expensive restaurants (12%) and greatly reducing or not buying souvenirs or gifts during their trip (6%).
How you travel by air matters too.
“Smaller airlines and shorter routes are the ones usually being cut by airlines because their pilots need to be used for the long-haul flights. It is wise for travelers to select more stable routes,” said Kimberly Franke, Kanna Travel Services based in Montana.
The city you fly out of will also make a difference. For example, you’re in New York City and want to travel to Miami for a weeklong vacation. You can fly out of a larger airport — like JFK — nonstop to Miami for $288 roundtrip per person. Choose a smaller airport, like White Plains/Westchester in metro NYC, and a roundtrip, nonstop flight is $2,038 per person.
“Larger cities can offer better routes and rates. Smaller cities or towns are currently suffering from routes being canceled and higher cost tickets,” said Franke.
Airline ticket prices are going up, not down, as you get closer to your departure date. “Airlines are selling out the lower fare class options first and, from there, the fare class only gets more expensive. This is not a trend that is likely to change anytime soon given staff shortages and gas prices,” Franke said.
In general, you should book six weeks in advance for domestic flights and four months in advance for international flights. Flights are typically less expensive on a Tuesday or Wednesday.
Booking in advance is also a good idea for hotels. “Some hotels, like Four Seasons and Marriott, use dynamic pricing — the higher the projected occupancy, the higher the price for the available rooms,” said Mimi Lichtenstein, owner of Truvay Travel. Not all hotels offer discounts, but it is worth inquiring about upgrades or negotiating prices for a longer stay.
Business trips are back, according to the U.S. Travel Association. Companies are planning in-person meetings as the top travel expense for 2022. Corporate travelers are taking advantage of this opportunity by taking leisure days on a work-related trip, a growing trend called “bleisure travel.”
Virtual meetings simply can’t replace face-to-face meetings. Personal interaction will always be more effective at establishing and maintaining relationships, fostering trust and driving company growth.
“The company will usually pay for the flights if the added days don’t increase total flight costs. But don’t think of it as a paid vacation. If the leisure portion of the trip falls on the weekdays, the expectation is that the employee will use vacation days or work remotely, as well as pay for any additional leisure expenses incurred. That’s why many traveling employees plan their trips to take advantage of long holiday weekends,” said Stephanie Diamond, vice president of Global Rescue Human Capital Management.
Currency exchange can help make up for the rising costs of travel. Argentina, now open to all travel, is a good deal for U.S. travelers since $1 USD is translating to $142 Argentine Pesos, a 45% increase in value in the last year. The Canadian dollar is 13% more valuable than the Euro since a year ago, potentially prompting increased trips to the Eurozone from Canada.
Be sure to exchange your money before returning home. Many currencies are unable to be exchanged after you depart the country or can be difficult to locate a facility that will exchange a specific currency. For example, the West African franc is extremely hard to exchange for USD in the states.
Marietta Formanek, CPA is vice president of accounting and finance operations at Global Rescue. She’s held senior finance positions with Orvis Co., AI Squared and is a KPMG alumnus.