Travel costs fell in April’s inflation reading. The dip may be short-lived, experts warn
Sunrise at Laguna Torre in Patagonia, Argentina.
© Marco Bottigelli | Moment | Getty Images
Travel in 2023 has been expensive. Indeed, some prices — like those for international flights — have hit record highs.
Americans are unleashing their wanderlust en masse after a few years of pandemic-era trip delays, making for a busy — and likely costly — summer travel season.
“In my 19 years in the industry, this is by far the busiest year I’ve had on record,” Jessica Griscavage, a travel advisor and founder of Runway Travel, recently told CNBC.
Typical trip costs increased by 9% in the first quarter of 2023, according to the NerdWallet Travel Price Index, which includes prices for flights, hotels, car rentals and dining out. When expressed in dollar terms, travelers would have paid an extra $180 per person for a $2,000 trip, NerdWallet found.
But travelers saw a reprieve in April, according to federal data.
Airline ticket prices declined by 2.6% in April relative to March, according to the consumer price index, issued Wednesday by the U.S. Bureau of Labor Statistics. They had risen in February and March.
Hotel and motel prices, as well as those to rent a car or truck, each fell by more than 3% during the month.
“As has been the case ever since the onset of the pandemic, travel prices have been volatile,” said Sally French, a travel expert at NerdWallet.
The reprieve may be temporary — but it’s hard to know
The April reprieve may be temporary in some categories, though.
Round-trip domestic airfare, for example, will jump by 7% in May and another 5% in June, where it will peak at $328 a ticket, according to a forecast by Hopper, a travel app. And travelers are “in for some sticker shock” relative to international airfare, which is around its highest level in five years, Hopper said.
General travel prices “are certainly higher than what they were pre-pandemic and even versus just last year,” French said.
However, while consumer demand has been high, airlines and hotels have at the same time introduced more supply via additional flight routes, hotel staff and vacation rentals — meaning travel costs “might not be as dire this year as some had anticipated,” she said.
More from Personal Finance:
How I doubled my money with a ‘black market’ exchange rate in Argentina
U.S. passport delays may be four months long — and could get worse
Why travel to Europe is no longer a ‘screaming, bargain-basement’ deal
Because the future is uncertain, she recommends booking a trip now rather than trying to wait for a better deal. Some travel providers allow consumers to book now without paying upfront and then rebook at a lower cost later, she added.
Here are some insights and ways to save on your trip, shared during a recent summer-travel conversation with Griscavage, the travel advisor; CNBC airline reporter Leslie Josephs and CNBC associate personal finance editor Ken Kiesnoski.
These tips are an excerpt from “This week, your wallet,” a weekly audio show on Twitter produced by CNBC’s Personal Finance team. Listen to the latest episode here.
1. Be flexible
Anton Petrus | Moment | Getty Images
Staying flexible on when — and even where — you travel can yield big savings.
Traveling midweek as opposed to the weekend is typically a money-saver. Instead of a major city, maybe consider somewhere more off the beaten track.
Not everyone has this luxury, of course. Parents may be beholden to school schedules; others might be locked into rigid schedules, too.
Travelers with some leeway can use tools such as Google Flights and Explore to discover good travel deals during the year, based on factors such as departure city and destination.
It’s a plug-and-play technique that’s “a little art and a little science,” Kiesnoski said.
Airfare is generally the first thing people buy, and accommodations such as hotel rooms often follow from there. Travelers can consult other online portals including Booking.com, Hotels.com, Airbnb, Expedia and Orbitz.
2. Travel in the off season
Orbon Alija | E+ | Getty Images
This is an offshoot of the “flexibility” category.
For many popular destinations — especially those in the Northern Hemisphere — demand peaks in June, July and August. To that point, airline officials have indicated in company earnings reports that they expect a “monster summer,” Josephs said.
But visiting a locale in the fall or winter may yield savings — and perhaps a better experience as crowds dwindle and it gets easier to book must-see attractions.
“I think you’re going to enjoy it a little bit more,” Griscavage said of off-season travel to popular cities.
3. Use your rewards
Many people built up frequent flier miles during the pandemic by using their credit cards that carry travel rewards benefits, Josephs said.
Now is a good time to use — and not hoard — those benefits, especially since it’s expensive to buy a flight in cash.
4. Use credit card benefits
Credit cards — especially those geared toward travel — may carry perks such as travel or rental car insurance. You may qualify for those benefits if you buy part or all of a trip with that card.
What that means: You might not have to buy any supplemental insurance policies, for example.
“Always check with your credit cards and see how good the insurance is,” Griscavage said.
It’s important to ask certain questions, such as whether a card’s benefits cover preexisting medical conditions during a trip, for example.