Inflation is surging — and if it keeps up, Americans may start nixing their travel plans.
Some 40% of U.S. adults said they would cancel a vacation or trip if consumer prices continue to rise, according to a new CNBC + Acorns Invest in You survey, conducted by Momentive. The online poll was taken March 23-24 among a national sample of 3,953 adults.
The Consumer Price Index jumped 7.9% in February from 12 months prior, with prices rising on 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 travel away from home in the U.S. and is based on CPI data, was up 16.7% year over year in February and 12.3% higher than February 2019.
No sign of a slowdown yet
To be sure, there is no sign of a travel slowdown just yet. In fact, post-Covid-lockdown demand is going strong.
“Our latest data shows the pent-up demand for travel is overshadowing the current inflated prices of travel,” said Tori Emerson Barnes, the U.S. Travel Association’s executive vice president of public affairs and policy.
That sentiment was also recently expressed by Glenn Fogel, CEO of Booking Holdings, an online travel services company.
“When you have two years of people not traveling the way they want to travel and you have a lot of savings built up in that time period, prices can be really high and people are saying, ‘I don’t care. I just want to travel. I want to go somewhere,'” Fogel said in an interview on CNBC’s “Closing Bell.”
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In fact, on travel website Kayak, domestic flight searches are up 78% compared to this time last year and international flight searches are up 140% year-over-year.
“We suspect we will continue to see leisure travel demand thrive,” said Paul Jacobs, general manager and vice president of Kayak North America.
“While we may see prices continue to increase, I anticipate they will only be modest increases,” he added.
Prices for domestic flights are up about 25% compared to this time last year, while international flights rose about 41%, Kayak found.
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Moving forward, travel app Hopper is expecting about a 10% increase in round-trip domestic ticket prices from now until June. That’s a bit of a larger hike than usual and it’s due to high jet-fuel prices and pent-up demand, said Hayley Berg, Hopper’s head of price intelligence.
Hotel prices are also up about 26% compared to last year but the cost of rental cars are down from supply-constraint induced prices last year, according to Hopper. However, gas prices jumped 38% in February from 12 months prior, according to the CPI. The average cost of a gallon of gas in the U.S. is now about $4.14 a gallon, according to GasBuddy.
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 score a deal, while international flights should be booked about four months ahead of time, Kayak’s Jacobs said.
For travel this summer, book your flights by the first week of May, Hopper’s Berg advises.
“After that, prices are really going to consistently rise and it will be harder to get a really good deal for June and July,” she said.
You may find lower airfare if you push off your vacation and book for September or October.
You can keep an eye on airfare and hotel prices by setting up price alerts through travel websites and apps.
Being flexible with the days of the week you fly can also save you money. For instance, domestic flight prices are 13% cheaper on Wednesdays and 15% more expensive than the national average on Sundays, Jacobs said.
Meanwhile, flying early for international flights may save you money, with flights between 5 a.m. and 10 a.m. 22% cheaper than other times of the day, he noted. Conversely, domestic flights between 10 a.m. and 10 p.m. are 12% cheaper than early morning flights.
Also look at alternative airports, since many areas have multiple choices. Low-cost carriers typically find it most cost-effective to operate out of regional airports, Berg said.
If prices are too much to bear, consider a staycation at a nearby hotel.
“This is a great way to spend time at a hotel with a pool … without spending a lot on travel,” said Berg.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.