Inflation Is Putting a Damper on Summer Travel, Survey Finds

Summer time journey season is upon us, and thousands and thousands of Individuals have plans to get out of city. A brand new NerdWallet survey finds that greater than 2 in 5 Individuals (42%) plan to take a trip that requires a flight and/or lodge keep in summer time 2023. These summer time vacationers say they’ll spend $3,293, on common, on these journey bills. That’s almost 109 million Individuals spending greater than $358 billion on summer time journey bills this yr, in accordance with NerdWallet evaluation.

The NerdWallet survey of greater than 2,000 U.S. adults performed on-line by The Harris Ballot requested summer time vacationers about their bank card spending and actions they’re taking to economize. Of these surveyed, 890 — known as 2023 summer time vacationers all through this examine — say they plan to take a trip that requires a flight and/or lodge keep this summer time. We additionally requested these not touring this summer time why they’re opting out.

• Some 2023 summer time vacationers may pay curiosity on their journey prices. Greater than 1 / 4 of 2023 summer time vacationers utilizing a bank card to pay for these journey bills (26%) say they gained’t repay the steadiness inside the first billing assertion, which means they’ll possible incur curiosity.

• Almost all 2023 summer time vacationers are attempting to economize. Most 2023 summer time vacationers (92%) are taking motion to economize on these journey bills, akin to selecting a lodge/motel/resort primarily based on worth as an alternative of facilities (39%) or driving as an alternative of flying (35%).

• Inflation is holding some from touring this summer time. Of Individuals who don’t plan to take a trip that requires a flight/lodge this summer time, the commonest cause they cite for not doing so is inflation has made journey too costly (23%). And 16% of non-summer vacationers say they don’t seem to be partaking in summer time holidays this yr as a result of inflation has made their different bills too costly, to allow them to’t afford to.

“Given will increase in demand and ongoing staffing shortages, most journey prices are rising increased than the general inflation charge,” says NerdWallet journey professional Sally French. “As a result of inflation is already excessive as-is, this summer time is ready to be tough for folks in search of to journey affordably.”

The vast majority of 2023 summer time vacationers (85%) plan to make use of a bank card to cowl journey bills, however this doesn’t imply most of those vacationers are taking over bank card debt. The survey finds that almost three-quarters of 2023 summer time vacationers utilizing a bank card to cowl these bills (74%) will repay the steadiness in full inside the first billing assertion, which suggests they gained’t accrue curiosity on these expenses. Nevertheless, the remaining 26% gained’t repay the journey bills inside the first billing assertion, so their summer time journey may cost a little greater than they budgeted because of curiosity expenses.

Technology Xers (ages 43-58) usually tend to say they’ll carry a steadiness than different generations. For instance, 37% of Gen X 2023 summer time vacationers who plan to place these journey bills on a bank card say they gained’t pay these off inside the first billing assertion. A smaller proportion of summer time vacationers within the different generations planning to make use of a bank card for his or her journey bills say they will not pay them off with the primary billing assertion — 23% of Technology Zers (ages 18-26), 24% of millennials (27-42) and 18% of child boomers (59-77).

Bank card debt is notoriously costly, however much more so in latest months. The common rate of interest on bank cards assessing curiosity is 20.92%, as of February 2023, in accordance with the Federal Reserve Financial institution of St. Louis. That’s lots of potential curiosity expenses on high of your journey spending.

Should you’ve charged summer time journey bills to a bank card — or plan to take action — create a plan to pay down this steadiness as shortly as potential so your trip recollections aren’t tainted by lingering bank card debt and expensive curiosity. After which make a plan to avoid wasting up for subsequent yr’s summer time journey.

“If it can save you for journey forward of time, you’ll keep away from paying curiosity on funds you may in any other case make on a bank card,” French says. “That mentioned, when you’re going to e-book journey that you simply intend to pay for later, make a transparent plan for a way you’ll make these funds. And when you discover room in your price range to pay down trip debt even sooner than you supposed, that’s even higher.”

Most summer time vacationers are taking steps to maintain prices down after a yr of serious worth will increase. Of the 2023 summer time vacationers, 92% say they’re taking motion to economize on these journey bills, akin to selecting a lodge/motel/resort primarily based on worth as an alternative of facilities (39%) or a flight primarily based on worth as an alternative of comfort (34%).

Greater than a 3rd of 2023 summer time vacationers (34%) say they’re utilizing bank card factors/miles to economize on these journey bills. A earlier NerdWallet survey discovered that journey rewards credit score cardholders have 55,300 factors/miles, on common, and these vacationers may save lots of of {dollars} or extra on their summer time holidays.

“Not like our recommendation on saving cash, NerdWallet virtually at all times recommends spending — moderately than saving — journey rewards,” French says. “Identical to inflation, factors inflation is actual; airways and resorts recurrently increase the variety of factors or miles wanted to e-book journey. Should you’re reserving a flight on an airline you’ve gotten miles with, it’s virtually at all times a good suggestion to avoid wasting your money and pay for it with miles.

“Journey rewards also can perform as a superb financial savings automobile. Utilizing factors and miles accrued all year long is usually a higher option to pay for journey, particularly if the choice goes into debt for journeys.”

Inflation hit budgets arduous over the previous yr, and journey bills aren’t immune. In line with the Bureau of Labor Statistics, airline fares are up 17.7% yearly, as of March 2023. So it’s unsurprising that our survey discovered that of Individuals who aren’t happening trip this summer time — no less than not one which requires a flight or lodge keep — the commonest cause is as a result of inflation has made journey too costly (23%).

Round 1 in 6 Individuals who aren’t touring this summer time (16%) say it’s as a result of inflation has made their different bills too costly, to allow them to’t afford to take a summer time trip.

Excessive inflation is outdoors your management, however there could also be choices to unlock cash if you wish to make a journey. That would imply slicing prices in your on a regular basis spending or studying the best way to journey on a price range. Summer time additionally tends to be a pricey time to journey, so it’d make sense to decide on a much less common time to plan a trip.

“Journey can definitely be prohibitively costly for some households, however there are methods to make it extra inexpensive,” French says. “Flexibility is vital. Avoiding peak-season journey is definitely smart if potential, however even shifting your flight schedule by a day (or perhaps a few hours) can influence airfares — typically by lots of of {dollars}.

“And don’t overlook the facility of bank card advantages in serving to you lower your expenses. Apart from rewards, playing cards branded to airways or resorts have a tendency to supply money-saving advantages once you journey particularly with them. Whereas actual advantages fluctuate by card, they may embody free checked baggage or breakfast at resorts.”

This survey was performed on-line inside the US by The Harris Ballot on behalf of NerdWallet from Feb. 7-9, 2023, amongst 2,080 U.S. adults ages 18 and older, amongst whom 890 are planning to take a trip that requires a flight and/or lodge keep in summer time 2023. The sampling precision of Harris on-line polls is measured by utilizing a Bayesian credible interval. For this examine, the pattern information is correct to inside +/- 2.8 proportion factors utilizing a 95% confidence degree. For full survey methodology, together with weighting variables and subgroup pattern sizes, please contact Lauren Nash at [email protected].