Inflation is Unlikely to Derail Travel Plans for Vacationers This Summer

The costs of traveling are on the rise, but don’t expect that to keep Americans from taking to the roads and skies this summer for vacation trips.

“People are kind of gritting their teeth and making the purchases because summer is coming and people want to travel in summer,” said Lindsey Roeschke, a travel and hospitality analyst at Morning Consult. “So it’s easier to make those trade-offs and to say, ‘Oh, I guess I’m not going to take that trip [during] spring break and I can just save more money and then travel over the summer.’”

Inflation as measured by the Consumer Price Index has shown an increase in prices associated with traveling. Lodging away from home was up 1% in April on a monthly unadjusted basis, while gasoline increased 5.2%, food away from home was up 0.3%, and airline ticket costs grew 4.1%. Inflation in most of these categories is far higher than before the pandemic.

Travel is Important For Younger Generations

Despite the rising costs, 72% of people say they are planning to travel, according to a recent survey by Bank of America.

Not only are consumers going on vacation more, they are staying about a day longer than they would have before COVID-19, according to a survey by Mastercard. This particularly affects the Gen-Z and millennial generations, who are traveling more than their predecessors ever did, according to Morning Consult.

“Travel in general for younger generations, in particular Millennials and Gen Z, is seen as an important part of who you are as a person and the way that you spend your time,” said Roeschke. “There’s a lot of exposure to social media and seeing other people traveling that inspires people to do it.”

Traveling abroad for big events is also up this year with consumers. From the European Championship of soccer in Munich, to the Summer Olympics in Paris and Taylor Swift concerts in various European cities.

“[Events] inspire people to go places,” Roeschke said. “When it comes to concerts specifically… many people say that it’s actually less expensive to fly to a different country and get a ticket to Taylor Swift.”

How Are Consumers Budgeting For Travel?

Many travelers are finding ways to get around the high prices.

Jamie Lam, a Californian college student living in Dallas, regularly tries to lower the costs of her flights home. A frequent tracker of flight and gasoline prices, she said travel costs are getting higher each time she visits, especially as summer approaches. 

She has also found that tickets are the cheapest on Tuesdays and Wednesdays and often uses Google Flights to track the prices and get a refund if the price becomes lower than what she paid.

Taking Advantage of a Strong Dollar

Some U.S. consumers are going international to find a good vacation deal. Mastercard found that Japan has become a popular destination this year because of its cheap accommodations and food. Travelers could also be taking advantage of the yen’s lowest level since 1990.

Traveling and learning about other cultures was 24-year-old Anh Tran’s main motivation to visit Japan in April. While there, she was surprised at how cheap food and non-essential goods were.

“Getting to Japan is more expensive up front,” Tran said. “But actually being there, you can basically spend like $20 within a day and you’re good.”

She said the hotel, flight, and public transportation in the country were the most expensive part of the trip. However, Tran said Japan seemed more affordable than how she lives back home.