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Travelers saw big-ticket items drop from their holiday budgets in July, offering at least a temporary reprieve after a sharp increase in costs earlier this year.
Airline ticket prices fell nearly 8 percent from June to July, while prices for car rentals and accommodations such as hotels fell 9.5 percent and about 3 percent, respectively, according to a monthly inflation report released Wednesday by the Labor Department of the USA. It was the second straight month of price declines for every category.
“I think that’s really good news when people are planning their vacations,” said Sally French, travel expert at NerdWallet.
Airline ticket prices peaked in May this year, driven by factors such as increased consumer demand following the Covid-19 pandemic and operational issues for airlines such as high jet fuel costs and staff shortages, which led companies to cut flight schedules. according to experts.
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That surge in airfare earlier in 2022 was “anomalous,” said Haley Berg, lead economist at Hopper.
Hotel and rental car prices also rose in the spring, while high gasoline costs also served to increase travel budgets.
“A lot” of people have been traveling recently, despite the high costs
Thirty-nine percent of travelers said the overall cost of travel being too expensive kept them from traveling more than they would have liked in the past six months, according to Destination Analysts, a travel market research firm. Almost half, 47%, specifically mentioned the cost of gasoline, and 27% did so for plane tickets.
Financial concerns have compounded other travel headaches over the past few months, such as an increase in lost luggage and delayed or canceled flights.
Even so, “a lot” of people still traveled during the summer — more than half of Americans took a trip in the past month, according to a Destination Analysts survey conducted in July.
Despite the recent cooling, travel largely remains more expensive than it was before the pandemic. Airline ticket prices this July rose 16% from July 2019, according to monthly consumer price index data.
Hotels rose a more modest 6% over the same period, while car rentals rose about 48%, “easily the sharpest price increase of all [travel] a category we’re tracking,” French said. In addition to consumer demand, factors such as semiconductor shortages that have affected the auto industry more broadly have spilled over to consumers, she added.
“It’s still important to remember [that] if you haven’t traveled or taken a big trip since pre-Covid, you should expect to pay more than what you’re used to,” French said.
How to score good deals on upcoming trips
Travel experts had a few tips to ease the sting of a potentially expensive trip.
Travelers who can remain flexible about vacation dates may be able to score a better deal on airfare, French said. A tool like Google Flights allows users to compare prices for selected travel dates as well as other combinations earlier or later in the week or month, for example, she said.
You may find that extending a trip by a day can save enough on airfare that it more than makes up for an extra night in a hotel—and gives you an extra day of vacation.
“I would encourage people to really be flexible with their budgeting,” French said.
For the best airfare deals, travelers planning domestic travel for the fall should book their airfare at least three to six weeks before departure, after which prices tend to rise quickly, Berg said.
Flying in the fall is also one of the best ways to save on international airfare, as prices are often lower in September and October than in the summer months, Berg added. Travelers usually get the best deal if they book about four weeks in advance, she said.
Also, departing midweek instead of on peak days typically saves about $35 per ticket, according to Hopper.
However, travelers may be better off booking a hotel closer to their arrival date, especially for major city destinations with ample accommodation, experts said. This is because hotels often lower their prices to clear inventory as the check-in date approaches.
Renting a car from a major airport hub can also be a safer bet, especially amid high demand — typically larger fleets at those hubs reduce the chances that a company will say they don’t have a vehicle for you upon arrival, Berg said. Travelers who prefer to fly into a regional airport may consider renting from a larger airport nearby and taking a taxi, for example.
Round-trip travel can also offer a financial benefit — especially in terms of rental cars and hotels — for those travelers willing to put in a little extra work, French said.
For example, travelers can often choose to defer payment for these purchases until their arrival date. Although travelers may pay a slightly higher price for this luxury, choosing a fully refundable hotel or rental car purchase allows travelers to monitor the prices leading up to their trip; if the price drops before then, travelers can book at the lower price and then cancel their original reservation, French said. However, users should of course be aware of any restrictions that may apply.