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The holidays can bring up a lot of unusual expenses, from gifts and meals to the snowballing costs that come with travel. Amid inflation and rising interest, 40 percent of millennial holiday travelers say their budgets will be strained, along with 31 percent of Gen Xers, 28 percent of Gen Zers and 23 percent of boomers. As the costs of flights, gas, hotels and more rise, no matter your age, you may be wondering how to make travel costs fit into your budget. Here’s how travel inflation may be impacting your holiday plans.
Key travel inflation statistics
- 82% of millennial holiday travelers and 82% of Gen Zers are changing their holiday travel plans due to inflation/rising prices. (Bankrate)
- 86% of holiday travelers with a household income less than $50,000 are changing their holiday travel plans due to inflation/rising prices. (Bankrate)
- 53% of holiday travelers making reservations will make them by the end of October. (Bankrate)
- Airline fares rose 43% year-over-year from September 2021. (Bureau of Labor Statistics)
- Gasoline prices rose 18% year-over-year from September 2021. (Bureau of Labor Statistics)
- Lodging away from home, however, rose 2.9% year-over-year from September 2021. (Bureau of Labor Statistics)
How inflation in 2022 has impacted travel costs
After years of reduced travel due to COVID-19 restrictions, 43 percent of U.S. adults plan to travel between Thanksgiving and New Year’s, according to Bankrate data. However, soaring costs of travel are making Americans rethink their plans.
Last year, the average cost for a one-week vacation for one person was $1,558, and costs soared to $3,116 for two people. Millennials were more likely to spend less for vacations, about $4,464 on average, compared to $7,800 for boomers.
Now in 2022, rising U.S. inflation is creeping higher in most travel categories. Holiday flights are expected to be the most expensive they have been in five years, according to travel site Hopper.
The busy holiday season has never been a cheap time to fly, but prices aren’t expected to fall anytime soon. Here’s a breakdown of how Thanksgiving travel costs have risen over the past year:
|Travel category||Thanksgiving 2021 costs||Thanksgiving 2022 costs||Percentage change|
|Domestic airfare (round-trip)||$300||$350||+16%|
|Hotels (avg. per night)||$187||$189||+1%|
|Rental cars (avg. per day)||$80||$60||-25%|
Travelers might see an average of $350 for a domestic flight over Thanksgiving. Also, as of mid-September, airfare for the week of Christmas and Hanukkah was even higher at $463 — 39 percent higher than last year, according to Hopper.
|Travel category||Winter holiday 2021 costs||Winter holiday 2022 costs||Percentage change|
|Domestic airfare (round-trip)||$390||$463||+19%|
|Hotels (avg. per night)||$193||$218||+13%|
|Rental cars (avg. per day)||$80||$53||-34%|
Tickets will only get more expensive as more people book flights. Airfare is expected to rise $10 each day between Halloween and Thanksgiving, and might climb as high as $450 just before the holiday, according to Hopper. Additionally, those booking last-minute Christmas flights might see prices of $580.
Even with these raised prices, most travelers are still expecting to go on domestic trips this fall, with popular tourist cities Las Vegas, New York City and Orlando leading for domestic destinations, according to Tripadvisor.
It may seem overwhelming to try and see your family while making it work within your budget, even if you’ve been saving for months. However, there’s a way to feel in control. Examining the current prices of airline tickets, hotels and other expenditures can help you get an idea of how much you might expect to spend this holiday season.
Flight price tracker: Travel costs during the 2022 holiday season
Understanding airline ticket prices can let you know what expenses to expect as you travel to see your family for Thanksgiving or the December holidays.
Airline fares, in particular, have seen the worst travel expense increase due to inflation. Like the surge in gas prices that the U.S. saw this past summer, jet fuel has gotten more expensive over the last year. Fuel is now 84.4 percent higher than it was a year ago, according to the International Air Transport Association.
The real price of your airfare, if you choose to take a flight this holiday season, will depend on your carrier, the date you buy tickets and your destination. These are some of the most popular flight routes in the U.S. and the average cost of tickets, as of the second quarter of 2022:
|Domestic flight path||Average cost in Q2 of 2022|
|New York (JFK) to Los Angeles (LAX)||$451|
|Los Angeles (LAX) to San Francisco (SFO)||$125|
|New York (LGA) to Chicago (ORD)||$205|
|Los Angeles (LAX) to Chicago (ORD)||$305|
|Atlanta (ATL) to Orlando (MCO)||$174|
Many are also wondering how to tweak their budgets so they can still grab a meal at a restaurant or see a local sight. Holiday travelers this year are placing a huge emphasis on food and drink, but a Bankrate survey shows that they might re-prioritize as they worry about their budgets due to inflation.
Almost a third (32 percent) of travelers from the Bankrate survey say that their plans will place a strain on their budget, and just over one in five (22 percent) travelers said they’ll feel pressured to spend more than they’re comfortable with.
Many Americans say they’re changing their holiday travel plans due to inflation/rising prices by traveling for fewer days (26 percent), getting a cheaper itinerary (25 percent) or taking fewer (24 percent) or shorter (26 percent) trips in general.
How might travel prices change in 2023?
Unfortunately, those hoping to wait until next year for airline prices to drop might be disappointed.
Leisure travel demand is high, and Ted Rossman, a Bankrate senior industry analyst, says to expect that to continue to be the case into 2023, with high prices and limited availability hitting travelers most during school holidays.
“Recession worries could put a damper on consumer spending, especially if the unemployment rate were to rise,” Rossman said, “but I think pent-up demand is still strong and consumer spending has been surprisingly resilient.”
Rossman advises that travelers book their tickets early and use credit card rewards, frequent flier miles and hotel points to help with your vacation budget.
4 ways to save on travel during 2022 and 2023
It’s normal to be worried about travel spending during economic uncertainty, but there are ways to take advantage of discounted tickets and bundles, even if you don’t have a credit card with rewards points. Here are four ways to help save on travel in 2022 and 2023:
1. Book tickets strategically
- If you’re planning on booking airline tickets, book them as soon as possible. About 80 percent of people book their holiday plane tickets by Halloween, per Hopper.
- Additional tip: Try to book your flight for an atypical day, such as the Monday ahead of Thanksgiving instead of the weekend.
2. Utilize fare-tracking apps
- Plenty of apps like Hopper, Skyscanner, Kiwi.com and more help you not only get the best deal on a flight, but can also help you book hotels or rental cars.
- Additional tip: Many apps will also allow you to examine when flight costs might go up and when is the most expensive time to fly, allowing you to get the most competitive price.
3. Use your credit card for deals
- Choosing the right travel card can help you take advantage of a lot of different deals on flights, hotels, gas and more.
- Some of the best travel credit cards of 2022 can help you earn flight miles and travel insurance, or even give you access to airport lounges.
4. Learn how to travel hack
- Travel hacking allows you to “hack” flights and hotels, allowing you to redeem points for travel.
- Even if you don’t want to use a credit card, you can get extra points by using shopping portals, dining rewards and taking advantage of mistake fares, or fares that have been priced below market value due to a mistake from the airline.
If you’re thinking of booking tickets to travel this holiday season, now is the time. Prices will only continue to climb, and your budget may be stretched even further if you wait. If you think you might be unable to see your out-of-state family or have the vacation of your dreams this year, perhaps wait until next year when you can book those tickets well in advance.
Travel costs aren’t set in stone, and they’re even more uncertain going into next year. However, with a combination of travel points and tricks, as well as thoughtful planning, you can get a well-deserved vacation after the hectic last several years.
Bankrate.com commissioned YouGov Plc to conduct a survey on holiday travel. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,455 adults, including 1,055 who anticipate traveling for the holidays and 829 who require travel reservations. Fieldwork was undertaken between September 7-9, 2022. The survey was carried out online and meets rigorous quality standards. It employed a nonprobability-based sample using quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.