The travel sector rebounded in the spring and summer. The holiday season is typically busy for travel, but a recent national survey by WalletHub found 40% of respondents said higher interest rates will affect their travel plans this winter.
The report found that 69% are worried about inflation when it comes to travel this holiday season. The survey found 43% are planning to take trips between Thanksgiving and New Years. That said, 79% of them are changing their holiday travel plans due to high inflation, Bankrate.com reported in a similar survey.
Staff shortages and rising fuel costs have put airlines in a challenging position pushing ticket prices to nearly all-time highs in June with prices up 25% year-over-year. Airline fares in August were up 33% versus a year earlier and by 9.3% relative to 2019, according to the respective CPI report.
While gasoline prices remain above $3 per gallon, up 25% year over year, car rental costs were down 6.2% in August from the same month in 2021. Hotel lodging costs rose 4.5% and restaurant menu prices were up 8% from a year ago.
The Bankrate winter travel survey also found 26% respondents are shortening their trips, 25% are choosing cheaper accommodations or destinations, 24% are taking fewer trips, 23% are traveling shorter distances and 23% said they are driving instead of flying. Households with income of less than $50,000 were the most likely (86%) to adjust their travel plans while 70% of those with incomes of more than $100,000 annually plan to modify travel plans, Bankrate reports.
“Travel costs have surged, so it’s important to plan ahead and factor these expenses into your overall holiday budget,” said Ted Rossman, senior industry analyst at Bankrate.com.
He suggests making airplane and hotel reservations earlier than in previous years.
WalletHub said 60% of its survey respondents said gasoline prices are too expensive for a road trip this winter. Overall, WalletHub estimates that 26 million consumers can’t afford to travel this holiday season. The biggest reason consumers will not travel this holiday season is they need to save more money compared to last year. The survey also found 55% of those planning trips this holiday season are redeeming loyalty miles and rewards to help them make the trips.