12 ways to adjust your vacation for inflation – Morningstar | Gmx Pharm

By Amanda Barroso

High prices are affecting your travel plans, here are some ways to cut costs

This article is reprinted with permission from NerdWallet.

It’s still summer, and if you’re planning to travel soon, be prepared to see inflation almost every step of the way.

According to a May NerdWallet poll, nearly 7 in 10 Americans planned to travel between Memorial Day and Labor Day, and 81% of them said inflation would interfere with their plans. That number increased among younger adults like Millennials (89%) and Gen Z (87%).

And they are right. There is no avoiding inflation this summer. Newly released data for June 2022 put inflation at a staggering 9.1%, a new 40-year high in the US, according to the Bureau of Labor Statistics.

The price increase since June last year is overwhelming. Not only are people paying the price at the gas pump (with a national average of $4.65 per gallon) and at the grocery store (grocery costs are up 12%), but they are also spending more on essential components of summer travel. Airfare is up almost 34%, dining out is up about 7.7% and hotel stays are up 11.5% compared to this time last year.

While inflation is beyond the control of ordinary Americans at these levels, you can keep your travel plans going without incurring additional debt by prioritizing and employing creative booking strategies to make the most of your trip.

See also: Before you book a flight this summer, here’s the #1 complaint against US airlines

Rate your travel saving tools

Count your reward points and miles

About a quarter (24%) of summer travelers in 2022 said they planned to reduce travel expenses due to inflation by using their award points or miles. You can cover the cost of your entire flight, or simply use points to make costs more manageable. Many people earned these points during the pandemic when travel was restricted.

Read: 1 in 3 people say they spent too much on travel to get a credit card sign-up bonus

Tap on airline and hotel loyalty programs and credit card benefits

Perks like free checked baggage or access to airport lounges that offer free food can save you some cash, especially if you’re traveling with your family. Eating out at the airport can be expensive, so saving on food and drink can translate into big savings for everyone in your party. Most hotels offer free loyalty programs where you earn points during your stay and eventually get free nights.

Related: The pros and cons of using Buy Now, Pay Later for travel expenses

Shorten your journey

Summer travelers will have to make some sacrifices this year to mitigate the effects of inflation. With accommodation costs rising, more than a quarter (28%) said they were traveling fewer days to save money. If you do the same, you can use the savings on other things like restaurants and tourist attractions.

Book during the week to miss price increases at the weekend

More than half (57%) of summer travelers in 2022 said looser workplace policies like hybrid hours and remote work would make it easier for them to travel this summer. If you have a flexible work schedule, booking on weekdays can often lower your costs, as nightly rates tend to be higher as the weekend approaches.

Research free activities to do in your travel destination

Planning a mix of paid and free activities can really help you stay on budget. Sure, get that tour, cooking class, or experience you’ve been dreaming of, but add in a few free activities (like museums, parks, or window shopping) to keep your travel budget on track.

Reduce transportation costs at your destination

In the past, travelers may have chosen to drive to their destination or rent a car to offset the high cost of airfare. But with national gas prices averaging $4.65 a gallon, according to AAA data, and rental car prices rising due to shortages and high demand, this may not be the money-saving alternative it once was. Here’s what you can do instead.

Book a centrally located hotel or holiday apartment

Before you book, sit down and determine the restaurants, attractions and other places you want to visit and find accommodation in a central location to reduce the cost of travel within the city or the need for a rental car. Even if you want to do some things that are not within walking distance, this strategy will help you save a lot.

Don’t overlook the local transport

When traveling to a big city, don’t overlook the public transportation options like subways, buses, or even bike rentals. Using one or more of these options is likely to be a lot cheaper than renting a car or using a ride-sharing service, and you can even see more of your destination.

If you need a rental car, book early

If you need a rental car at your destination, book one well in advance and check prices and availability before you even book your flights. You can always keep an eye on the price as your trip approaches and cancel your old reservation and reserve at the new, lower price. And with gas prices so high, book the smallest and most economical car that suits your needs. In other words, resist SUV upselling.

Make your accommodation more affordable

Hotel costs have skyrocketed due to inflation, but there are ways to cut back on your spending if you get creative and are willing to trade a little privacy for cost savings.

Stay close to your destination with friends or family

If you have friends or family members who live close to your destination, you should ask if you could stay with them. Not only could this save you money, but it could also help you cram two trips into one, especially if you already had a visit planned.

Redeem loyalty points for free stays or discounted rates

If there’s a hotel chain you really like, join their loyalty program and book direct. If you’re already a member, you may have already earned enough points for a free night or two.

Other benefits and perks of these hotel loyalty programs can include free breakfast, restaurant credits, or waived resort fees, all of which can add up.

A tip to keep in mind when choosing your hotel loyalty program: The bigger the hotel chain, the more likely you are to find participating hotels for future trips.

Book a hotel with complimentary breakfast or happy hour

By taking advantage of these perks, you can lower your restaurant bills. While the food or wine might not be Michelin-star worthy, the cost savings might be what you need to keep travel debt at bay. This is especially true if you are traveling with children.

Book accommodation with a kitchen or mini fridge

One of the fun things about traveling is trying new restaurants, but eating out for every meal is costly. You can save big by stocking a mini-fridge with drinks, snacks, or even simple breakfast options. Some hotel brands even have full kitchens in the room.

It’s never too late to start saving for next year

If you’re out of summer travel this year but have a bad case of FOMO (fear of missing out), start saving now. Once you’ve found your destination, estimate the cost and divide that number by the weeks or months until your trip. The result? The amount you should save each week or month to reach your goal.

By budgeting for travel expenses throughout the year, you can save small amounts and safely invest that money in a high-yielding savings account to earn interest. To make this even more pointless, try automating those bi-weekly or monthly payments into your savings account so you’re not tempted to spend that money elsewhere.

Read more: When will inflation peak? Consumers and economists see light at the end of the tunnel (but it’s a long tunnel)

With a travel savings bucket, you have cash on hand to offset travel expenses at the time of booking instead of piling up travel debt. Plus, make the most of your points and miles to reduce travel expenses, or consider signing up for a new travel credit card (as long as you pay the bill on time) for a large pool of points as a welcome bonus.

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Amanda Barroso writes for NerdWallet. Email: abarroso@nerdwallet.com.

 

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