Inflation is here and it’s wreaking havoc on travel budgets. Our Frugal Traveler columnist on how to strategize in a world of rising prices.
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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 percent in March compared to March 2021, with airfares, up 23.6 percent, beating that. The return of leisure travel has bumped nightly hotel prices up 11.7 percent on average, to $148, according to the hospitality benchmarking firm STR, compared to 2019 at $132. Rental cars, gas and even Uber rides — up 12 percent 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.
High gas prices are a headwind. In a March survey from the market research firm Longwoods International, 38 percent 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 percent 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 like Costco and services like 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 the Swedish electric carmaker Polestar to buy 65,000 E.V.s over five years, with availability expected this spring in Europe and, by year end, in North America and Australia.
Stateside, Hertz currently rents high-end Teslas. A recent search in Atlanta turned up a Tesla for $156 a day (compared to about $85 for a sedan getting 27 miles per gallon). Unless you’re planning an epic trip, it’s hard to imagine how those gas savings would exceed the E.V. rental bill, though the latter will reduce emissions.
The car-sharing service Turo says demand for electric cars has been booming with more than 13,000 rented in the last month. The platform has more affordable electric models available, reducing both gas and tailpipe emissions. A recent search in Los Angeles, for example, turned up Polestars for under $100 a day.
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 an adult over age 28.
“Traveling by train in many European countries is cost-effective and efficient, with a wide choice of punctual services,” said Sarah-Leigh Shenton, the marketing director of Red Savannah, a travel planning service. “Traveling from Venice to Florence, for example, takes three hours by road, compared with just over two hours by high-speed train.”
Airfares are 7 percent higher than prepandemic 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, the general manager and vice president of the North American division of Kayak.
Since ticket prices change constantly, let websites do the monitoring. The search engines Kayak and Skyscanner offer flight price-tracking. Wednesday is the cheapest day to fly domestically, according to Kayak, with fares 13 percent 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, the founder of the 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 and Paris with train service to Lyon and back was $600 in May.
Condor Airlines from Germany is back with its biggest U.S. deployment after skipping last summer. It flies between Frankfurt and a dozen American airports, including new service from New York City, Los Angeles and San Francisco. A recent search found flights that cost 30 percent less than Delta and Lufthansa.
Spain-based Level is introducing routes between Barcelona and Los Angeles (from $479 round trip), New York ($425) and Boston ($475). The airline will have more than 11,000 weekly seats on routes between the United States and Spain, twice the number it had in 2019.
Remember that most low-cost carriers charge extra for things like 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 weather-wise or mechanically, it may take a while before a low-cost carrier can get you on your way.
Experts say now is always a good time to use your points and miles. Why? Because they don’t accrue interest, 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,” Mr. Griff added.
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.
Hotel rates are surging. Reflecting national trends, rates at Graduate Hotels, which has more than 30 locations in college towns, are up 12 percent for April through August compared to the same period in 2019.
“The desire to leave the house and travel is tremendous on the leisure side,” said Carter Wilson, the senior vice president in consulting for the hotel analyst firm STR. Demand is still lower than 2019, he explained, 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 like Generator have expanded in the United States in recent years. The new Lolo Pass in Portland, Ore., 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.
Always check the deal page of the hotel you’d like to book or sign up for their newsletter. High gas prices have inspired a number of hotels to offer fuel givebacks. In San Diego, Town and Country Resort is offering $50 toward gas and parking over a two-night stay through June (rooms from $189). On North Carolina’s Outer Banks, the Sanderling Resort, is offering a $50 gas rebate with a two-night stay booked by May 1 for travel through Dec. 31 (rooms from $379). The Hotel Winters in northern Yolo County, Calif., is offering a $50 gas gift card and a bottle of wine to guests staying Monday through Thursdays through May 31 (rooms from $229).
Even without seasonal promotions, some tried and true rules for thrifty booking apply, including booking midweek stays. At the Hotel Covington, in Covington, Ky., across the river from Cincinnati, midweek stays cost $259 compared to $449 on weekends.
Discounts often apply to multiple-night stays. The Bellmoor Inn and Spa in Rehoboth Beach, Del., takes 15 percent off two-night stays midweek (from $299 a night before the discount) and the new Hotel Bethany Beach in nearby Bethany Beach offers 25 percent off three-night stays (from $109).
Strong demand for short-term rentals has pushed prices up. Rentals are up 27 percent 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 percent compared to 2019. Some of its most affordable rentals are in Carlsbad, Calif. (the median price is $158 a night), Jacksonville, Fla. ($159), Tucson, Ariz. ($210), and Nashville ($212).
Keep an eye on fees, especially cleaning fees, which are best amortized over a longer stay. A $100-a-night cabin on Airbnb with a $150 cleaning fee comes to $250 for one night. Spread over a week, it adds closer to $20 a night to the rate. Or look for a rental without a cleaning fee, like one of the tiny homes at Majestic Farm in rural Sullivan County in the Catskill Mountains (from $155 a night).
Looking ahead. As governments across the world loosen coronavirus restrictions, the travel industry hopes this will be the year that travel comes roaring back. Here is what to expect:
Air travel. Many more passengers are expected to fly compared to last year. You’ll still need to check the latest entry requirements, and wear a mask for now. But more destinations will be within reach as countries reopen to tourists.
Lodging. During the pandemic, many travelers discovered the privacy offered by rental residences. Hotels hope to compete again by offering stylish extended-stay properties, sustainable options, rooftop bars and co-working spaces.
Rental cars. Travelers can expect higher prices, and older cars with high mileage, since companies still haven’t been able to expand their fleets. Seeking an alternative? Car-sharing platforms might be a more affordable option.
Cruises. Despite a bumpy start to the year, thanks to Omicron’s surge, demand for cruises remains high. Luxury expedition voyages are particularly appealing right now, because they typically sail on smaller ships and steer away from crowded destinations.
Destinations. Cities are officially back: Travelers are eager to dive into the sights, bites and sounds of a metropolis like Paris or New York. For a more relaxing time, some resorts in the U.S. are pioneering an almost all-inclusive model that takes the guesswork out of planning a vacation.
Experiences. Travel options centered around sexual wellness (think couples retreats and beachfront sessions with intimacy coaches) are growing popular. Trips with an educational bent, meanwhile, are increasingly sought after by families with children.
Consider a big house — which may look expensive — and fill it with friends and family to split the cost. Sasha Hoffman, who runs the group-travel planning service The Sasha Edition, recently rented a villa for 14 on St. Lucia for $1,900; a nearby luxury hotel was charging $3,000 a night for a double. She and her group paid the equivalent of $135 a person a night.
Like other travel services, house-sitting took a hit during the pandemic, but has come back, like home rentals, by providing more privacy than hotels. House-sitting provides free accommodations on platforms like House Sitters America ($49 membership for one year) and MindMyHouse ($20 a year), which match homeowners to travelers.
At Trusted Housesitters ($129 annual membership), where membership is now higher than it was before the pandemic, most arrangements include pet sitting. Recent listings included a two-bedroom, two-cat apartment in Washington, D.C., and a ranch home with a golden doodle near Raleigh, N.C.
The pets “are going to sleep in the bed with you, so you do need to be a pet lover,” said Stephanie Perry, of Dover, Del., who frequently house-sits while running a digital business.
Similarly, home swaps on services like 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 percent more exchanges in April 2022 compared to April 2019.
“It’s typically a more personal experience,” said Ryan Wolffe, an architect in Avon, Colo., who has been exchanging his ski area condo for about 20 years, adding that exchange partners usually leave gifts of local food and area recommendations.
Exchanges work best in popular cities, said Aaron Brown, an attorney and travel blogger who has exchanged his second home in downtown Seattle about 75 times. “It’s a convenient and cost-effective way to travel,” he said.
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 to $149 at the Chamberlin Inn in Cody, Wyo., outside the park.
AutoCamp, which has units in Airstream trailers among its lodging options, has locations outside of Cape Cod, Joshua Tree, Yosemite and Zion national parks; rentals in AutoCamp Yosemite start at $189.
Or find less popular options in nature. Getaway specializes in stationing tiny-home-style rentals in wooded areas within a few hours’ drive of major cities, with rentals starting around $109. In the past year it has opened Getaways outside of Chicago, Nashville, Seattle and New Orleans, among eight new locations.
The outdoor accommodations site Hipcamp is a good source for finding campsites, cabins, R.V. parks and glamping accommodations in the United States, Canada and Australia. Campsites average $35, though luxury glamping stays can be as high as $800 a night. Since 2019, bookings have been up nearly 500 percent.
“Camping remains a reliable way to go on a fun vacation without going over budget,” said Dan Yates, the found of Pitchup.com, an outdoor accommodation platform, where sites start at $10 a night.
Travelers going abroad may benefit from the dollar’s current strength, up to .92 cents on the euro, compared to 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 following Russia’s invasion of Ukraine.
Warm-weather destinations often reduce their rates in summer, including Miami, where hotels may be slashed up to half-off June through August. Scottsdale, Ariz., runs an annual campaign promoting bargain summer stays, starting at $111 a night.
Peak seasons for Washington, D.C. are fall and spring, making summer a good time for a deal in the capital, which is renowned for its free-admission attractions, including the Smithsonian museums.
Explore alternatives off the beaten path. Consider Virginia’s wine country, where a stay at one of its top wineries, Barboursville, starts at $240.
Cities are projected to be busier this year, though Hotels.com said major cities such as New York, San Francisco and Amsterdam are still cheaper than normal, with nightly rates $175 to $250. Smaller cities like Detroit offer even lower rates.
Alas, don’t look for bargains in Hawaii this summer. Expedia said demand for Oahu is well above 2019. On the Big Island, bookings in September are up sixfold compared to prepandemic times.
Elaine Glusac writes the Frugal Traveler column. Follow her on Instagram @eglusac.
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