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Travelers saw prices for the biggest pieces of their holiday budgets fall in July, offering at least temporary respite after rising costs earlier this year.
Air fares fell nearly 8 percent from June to July, while prices for rental cars and accommodations such as hotels fell 9.5 percent and about 3 percent, respectively, according to a report by ‘monthly inflation published on Wednesday by the US Department of Labor. It was the second consecutive month of price declines for each category.
“I think it’s really good news when people are planning their vacations,” said Sally French, travel expert at NerdWallet.
Airline ticket prices peaked in May this year, driven by factors such as high consumer demand in the wake of the Covid-19 pandemic and operational issues for airlines such as high fuel costs for aircraft and staff shortages, which caused companies to reduce flight schedules, according to experts.
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This increase in airfares in early 2022 was “anomalous,” said Hayley Berg, chief economist at Hopper.
Hotel and rental car prices also rose in the spring, while high gas costs also served to stretch road trip budgets.
“A lot” of people have traveled recently, despite the high costs
Thirty-nine percent of travelers said the overall cost of overpriced travel deterred them from traveling more than they would have liked in the past six months, according to Destination Analysts, a travel market research firm. Almost half, 47%, explicitly cited gas costs, and 27% did so for airline tickets.
Financial worries compounded other travel headaches in recent months, including an increase in lost luggage and delayed or canceled flights.
However, “a lot” of people still traveled during the summer: More than half of Americans took a trip last month, according to a July survey of destination analysts.
Despite the recent cooling, travel remains largely more expensive than it was before the pandemic. Airfare this July increased 16% compared to July 2019, according to monthly consumer price index data.
Hotels are up a more modest 6% over the same period, while rental cars are up around 48%, which is “easily the strongest price increase of all. [travel] “In addition to consumer demand, factors such as semiconductor shortages that affected the auto industry more broadly have flowed through to consumers,” he added.
“It’s still important to remember that [that] if you haven’t traveled or taken a big trip since pre-Covid, you should expect to pay more than you’re used to,” French said.
How to get good deals on upcoming trips
Travel experts had a few tips to ease the peak of potentially expensive travel.
Travelers who can stay flexible about their vacation dates can get a better deal on airfare, French said. A tool like Google Flights allows users to compare prices for selected travel dates, as well as other combinations earlier or later in the week or month, for example, he said.
You may find that extending a trip by a day could save you enough on airfare to more than make up for an extra night in a hotel and give you an extra day of vacation.
“I would encourage people to be really flexible with their budget,” French said.
To get the best deals on airfare, travelers planning a domestic fall trip should book their airfare at least three to six weeks before departure, after which prices tend to increase rapidly, Berg said.
Flying in the fall is also one of the best ways to save on international tickets, as prices tend to be lower in September and October compared to the summer months, Berg added. Travelers generally get the best deal if they book about four weeks in advance, he said.
Plus, departing on a weekday instead of on peak days saves about $35 per ticket, according to Hopper.
Travelers may be better served booking a hotel closer to their arrival date, however, especially for big-city destinations with ample accommodation, experts say. This is because hotels often lower their prices to clear inventory as the check-in date approaches.
Renting a car from a major airport hub can also be a safer bet, especially amid high demand – larger car fleets at these hubs reduce the chances of a company saying they don’t have a vehicle for you upon arrival, Berg said. Travelers who prefer to fly into a regional airport may consider renting from a larger airport nearby and taking a taxi there, for example.
Reimbursable travel can also offer a financial advantage, especially in relation to rental cars and hotels, for travelers willing to put in a little extra work, French said.
For example, travelers can often choose to defer payment for these purchases until their arrival date. While travelers may pay a slightly higher rate for this luxury, opting for a fully refundable hotel or purchasing a rental car allows travelers to control prices before their trip; if the price drops in advance, travelers can book at the lower rate and then cancel their original reservation, French said. However, consumers should of course be aware of the restrictions that may apply.