Travelers are feeling the squeeze. Rising prices related to inflation, employment shortages and supply chain slowdowns are hitting the travel industry, just as summer travel planning — compounded by pent-up demand — peaks.
Prices for consumer goods were up 8.5% in March compared with March 2021, with airfares, up 23.6%, beating that. The return of leisure travel has bumped nightly hotel prices up 11.7% on average, to $148, according to the hospitality benchmarking firm STR, compared with 2019 at $132. Rental cars, gas and even Uber rides — up 12% recently, according to the marketing research firm NielsenIQ — are siphoning travel budgets.
When the going gets expensive, the frugal get smarter. You may spend more time planning your vacations while pursuing thrifty strategies, but the following tips provide a return on that investment.
On the road
High gas prices are a headwind. In a March survey from the market research firm Longwoods International, 38% of respondents said the rising cost of gas would greatly impact their travel decisions in the next six months.
Rental car prices are expected to remain high throughout the year, as agencies run short on inventory after selling much of it at the height of the pandemic and unable to replenish their fleets because of supply chain challenges. The travel search engine Kayak recently put the average rental car price at $101 a day in summer, up 67% over 2019.
To save, consider a Costco membership ($60 to $120) for access to its travel department’s rental car deals; a recent search found a daily savings of $30 on a rental in San Francisco. The free service AutoSlash uses your memberships in clubs such as Costco and services such as AAA to find discount rentals and then tracks them to see if the price drops.
Electric vehicles are one way around gas hikes. They’re still scarce as rentals, but Hertz now advertises them in seven U.S. airports and recently announced a deal with Swedish electric carmaker Polestar to buy 65,000 EVs over five years, with availability expected this spring in Europe and, by year end, in North America and Australia.
Taking the train
Taking a train isn’t realistic in most of the United States, except the Northeast corridor, where Amtrak said it carried five times as many riders between Washington, D.C., and New York City as airlines last year. Check the Amtrak deals page, which has a variety of sales, depending on where you’re traveling, including a current half-off deal on up to three companion tickets after paying for one full price ticket in Southern California.
There are many more rail options in Europe, where travelers can enjoy the scenery and reduce emissions, rather than taking a low-cost airline at rock-bottom prices. For four days of travel within a month, a Eurail Pass, good in 33 European countries, costs $273 for a person older than 28.
In the air
Airfares are 7% higher than pre-pandemic prices, at an average of $330 for a domestic round-trip ticket, according to the booking app Hopper. It expects the average to rise through May to $360.
“We will likely continue to see prices increase heading into summer travel due to a combination of pent-up demand, rising fuel costs and labor shortages,” said Paul Jacobs, general manager and vice president of the North American division of Kayak.
Since ticket prices change constantly, let websites do the monitoring. Search engines Kayak and Skyscanner offer flight price-tracking. Wednesday is the cheapest day to fly domestically, according to Kayak, with fares 13% lower; Sunday is the most expensive. For international, fly Thursday and avoid Fridays. Book six weeks in advance for domestic and 16 weeks for international, but stay vigilant.
“After booking, keep checking the fare,” said George Hobica, founder of flight-deal site Airfarewatchdog.com, who canceled a $650 flight when he found the same itinerary with the same airline earlier in the day for $400; after rebooking, he had a $250 flight credit. “Thanks to no-fee cancellation policies, it’s much easier to change to a cheaper flight or date,” he said.
Internationally, Hopper predicts the average round trip will be $940 in June, exceeding 2019 fares. Providing alternatives, a number of foreign low-cost carriers are new or returning service to stateside airports, including French Bee, which is introducing service between Los Angeles and Paris from $321 one way. Its existing New York-to-Paris fares start at $197.
Additionally, it offers packages that combine air and train travel on the French national railway. A recent search for a round-trip ticket between Newark, New Jersey, and Paris with train service to Lyon and back was $600 in May.
Remember that most low-cost carriers charge extra for things such as checked bags, meals and seat assignments, so factor those in when comparing prices to standard carriers, which include many of these in their fares. Flight frequency is another potential hazard; if something goes wrong weatherwise or mechanically, it may take awhile before a low-cost carrier can get you on your way.
Using loyalty points
Experts say now is always a good time to use your points and miles. Why? Because they don’t accrue interest and are prone to deflation as airlines may change their value, and, if you cancel, you’ll usually get the points back (versus a cash sale, which is often returned as a voucher).
Now is especially good as “points and miles don’t necessarily react as fast to external pricing pressures in the same way airfares do,” said Zach Griff, a senior reporter covering loyalty points for The Points Guy website.
Paying with miles may sometimes mean paying a fuel surcharge. Domestic carriers haven’t imposed surcharges on most award tickets, but if you’re looking to use your miles on British Airways or Emirates, be prepared.
“British Airways has astronomical surcharges, especially if you’re redeeming for coach or premium economy,” Griff said.
The Points Guy has a useful calculator that will help you determine whether to spend cash or use miles based on the value of the mile.
Hotels and updated hostels
Hotel rates are surging. Reflecting national trends, rates at Graduate Hotels, which has more than 30 locations in college towns, are up 12% for April through August compared with the same period in 2019.
“The desire to leave the house and travel is tremendous on the leisure side,” said Carter Wilson, senior vice president in consulting for hotel analyst firm STR. Demand is still lower than 2019, he said, but leisure travelers tend to pay more than business travelers, who often get corporate discounts, which accounts for the higher prices.
Hostels aren’t just for students any more. Private rooms with multiple beds make them family-friendly, and European brands such as Generator have expanded in the United States in recent years. The new Lolo Pass in Portland, Oregon, fits 282 guests in 87 rooms (rates from $35 for a shared room and $125 for a private), and includes a rooftop bar, restaurant and art gallery.
Penny-pinchers, keep your eye on Stay Open, an updated hostel in which each bed is a private pod and guests share upgraded bathrooms and lounges ($69 a night). For now, there’s just one 10-bed Stay Open in Venice Beach in Los Angeles, but another 240-bed property is coming to San Diego in 2024, including private rooms from about $100; its founders aim to turn vacant office space — a pandemic plague — into a chain of lodgings for digital nomads.
Renting a vacation home
Strong demand for short-term rentals has pushed prices up. Rentals are up 27% at Hawaii Life, a brokerage service with 320 rentals across the Hawaiian Islands, now averaging $490 a night. HomeToGo.com, a rental company, said the average price for a unit in the United States is up about 10% compared with 2019. Some of its most affordable rentals are in Carlsbad, California (the median price is $158 a night), Jacksonville, Florida ($159), Tucson, Arizonz ($210), and Nashville, Tennessee ($212).
Free home stays
Like other travel services, housesitting took a hit during the pandemic, but it has come back, like home rentals, by providing more privacy than hotels. Housesitting provides free accommodations on platforms such as House Sitters America ($49 membership for one year) and MindMyHouse ($20 a year), which match homeowners to travelers.
Similarly, home swaps on services such as HomeExchange (annual membership $175) and Love Home Swap ($11 a month) allow you to exchange your house with another traveler. HomeExchange said it had 51% more exchanges in April 2022 compared with April 2019.
Travelers heading to national parks should look for lodgings near but not in the preserves. A Saturday night in late June at Old Faithful Inn in Yellowstone recently cost $479 compared with $149 at the Chamberlin Inn in Cody, Wyoming, outside the park.
AutoCamp, which has units in Airstream trailers among its lodging options, has locations outside of Cape Cod, Joshua Tree and Yosemite national parks; rentals in AutoCamp Yosemite start at $189.
Stretch your dollar abroad
Travelers going abroad may benefit from the dollar’s current strength, up to 92 cents on the euro, compared with about 83 cents a year ago, according to XE currency exchange. Last summer, $1 got you .70 British pounds; today it gets about .77 pounds. At $1.26 to the Canadian dollar, U.S. currency puts American travelers at an advantage in Canada.
Savings may be eroded by higher prices. Some hotels in Europe are raising rates given the spike in energy costs after Russia’s invasion of Ukraine.