Inflation is rising – and if it continues, Americans may start scrapping their travel plans.
According to a new CNBC + Acorns Invest in You survey conducted by Momentive, about 40% of U.S. adults said they would cancel a vacation or trip if consumer prices continue to rise. The online poll was conducted on March 23-24 in a national sample of 3,953 adults.
The consumer price index jumped 7.9% in February from 12 months ago, pushing up everything from gas to food to housing. March figures are expected to be released next week.
Meanwhile, the Travel Price Index, which measures the cost of traveling away from home in the United States and based on CPI data, is up 16.7% year-over-year in February and 12.3% higher than in February 2019.
There are no signs of a recession yet
To be sure, there are still no signs of a travel downturn. In fact, the post-lockdown demand is gaining momentum.
Tory Emerson Burns, executive vice president of public affairs and policy at the US Travel Association, said: “Our recent data shows that the growing demand for travel is surpassing the current inflation rate of travel.”
That feeling was recently expressed by Glenn Fogel, CEO of Booking Holdings, an online travel services company.
“When you have two-year-olds who don’t travel the way people want to travel and you make a lot of savings in that time, the price can be really high and people are saying, ‘I don’t care. I just want to travel. I’m somewhere. “I want to go,” Fogel said in an interview with CNBC’s “Closing Bell.”
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In fact, on the travel website Kayak, domestic flight searches increased by 78% compared to the same period last year, and international flight searches increased by 140% year-on-year.
“We suspect we will see an increase in demand for leisure travel,” said Paul Jacobs, general manager and vice president of Kayak North America.
“While we can see that prices will continue to rise, I expect that they will only increase slightly,” he added.
Compared to the same period last year, the price of domestic flights increased by about 25%, while international flights increased by about 41%, Kayak found.
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Moving forward, travel app hopper expects round-trip domestic ticket prices to rise by about 10% from now until June. This is a slightly larger increase than usual and is due to higher jet-fuel prices and paint-up demand, said Hailey Berg, head of Hopper in Price Intelligence.
Hotel prices have also risen by about 26% compared to last year, but according to Hopper, rental car prices have fallen due to last year’s supply constraints. However, according to the CPI, gas prices rose 38% in February from 12 months ago. According to GasBuddy, the average cost of a gallon of gas in the United States is now about $ 4.14 per gallon.
How to save money
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Booking a domestic flight at least six weeks in advance is usually one of the best ways to make a deal, when international flights should be booked about four months ahead of time, says Kayak’s Jacobs.
For this summer’s trip, book your flight in the first week of May, Hoppersberg advises.
“After that, prices will continue to rise steadily and it will be difficult to find really good deals for June and July,” he said.
You can get lower airfare if you book off your vacation for September or October.
You can set up price alerts through travel websites and apps to track airfare and hotel prices.
Being flexible with the days of the week can also save you money on flights. For example, domestic flights are 13% cheaper on Wednesdays and 15% more expensive than the national average on Sundays, Jacobs said.
Meanwhile, flying early for international flights can save you money, with flights between 5am and 10am being 22% less than other times of the day, he noted. Conversely, domestic flights between 10am and 10am are 12% cheaper than morning flights.
Also see alternative airports, since many areas have multiple choices. Low-cost carriers generally find it most economical to work outside of regional airports, Berg said.
If the price is too high to afford, consider staying at a nearby hotel.
“It’s a great way to spend time in a hotel with a pool … without spending a lot on travel,” Berg said.
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