Flying to Europe this year may sound as absurd as opting for premium petrol. With prices this high, is it really the right time to splurge?
“Because of the labor shortage and all of that, travel is at its most expensive in a long time,” says travel journalist Oneika Raymond. “Flights are very expensive. Accommodation is really expensive. And revenge trips are one thing.”
Although travel prices continue to rise Overall, affordable niches remain due to limited supply and increasing demand.
Europe represents one of those niches, where weaker exchange rates against the dollar and tepid demand have left prices relatively unscathed. In fact, flights within the US have gotten so expensive this year that some international destinations, including many in Europe, are a relative bargain.
“If you’re willing to pay for domestic flights, look at international destinations,” suggests Hayley Berg, chief economist at Hopper, a travel booking app. “Because there’s a good chance there’s a flight somewhere else in the world for about the same price.”
Airfare is less expensive in Europe
According to Hopper data, the domestic air fare at the end of May 2022 was 30% higher than in May 2019.
“Airline tickets within the United States this summer cost $600 to $800,” says Berg. “For those prices, you can go to Reykjavik, Iceland, or Dublin, Ireland.”
According to Hopper, flights from the US to Europe at the end of May 2022 increased by just 13% compared to the same period in 2019. This trend is consistent with tourism demand remaining below pre-pandemic levels: According to International Trade Administration data, about 19% fewer US travelers traveled to Europe in May 2022 than in pre-pandemic May 2019.
Put simply, prices and demand for flights to Europe are increasing, but not as fast as elsewhere.
“With domestic fares so high, you can get more for your money on long-haul destinations,” explains Berg.
THE DOLLAR IS STRONG
Although 2022 could go down as a bear market for everything from stocks to cryptocurrencies, the US dollar has gained ground against many foreign currencies. According to Federal Reserve data, the dollar was 15% stronger in May 2022 compared to May 2021 compared to May 2021.
“What we’re seeing today is that a dollar can buy more euros than it has essentially since the euro was introduced,” says Berg.
This means that anything bought while traveling in euro countries will be given a 15% discount, provided exchange rates remain stable. US travelers enjoy this benefit on everything from food and lodging to events and transportation.
Of course, global inflationary pressures continue to push up prices everywhere, including in Europe. According to the Financial Times, annual consumer prices in Germany rose 7.9% in May, just below the 8.6% increase in the US. While prices may remain elevated almost everywhere, the dollar’s relative strength may help soften the blow.
PUBLIC TRANSPORT CAN HELP YOU SAVE
Inflation has hit no aspect of travel more directly and dramatically than the cost of renting and operating a vehicle. According to data from the US Bureau of Labor Statistics, rental car prices increased a budget-busting 69% in May 2022 compared to May 2019. And everyone knows how much gasoline prices have risen.
These factors should make this the summer of public transport for budget travelers. But the United States offers few destinations that can be explored by train.
Not so in Europe where the most popular cities offer safe, affordable and reliable transit. Cities like Amsterdam, London and Copenhagen can be explored for just a few euros, which, given favorable exchange rates, is only a few US dollars.
Visiting national parks in the US made sense in 2020 and 2021 for a variety of reasons. But saving money in 2022 means skipping cars entirely if possible.
OFF THE TOURIST PATH?
We are indeed in strange times where traveling to Europe is an off the beaten track and budget friendly choice. But the facts speak for themselves. Airfares to Europe are increasing less rapidly than domestic tickets, and fewer travelers are visiting the continent. The dollar is strong and the US has dropped its testing requirements for inbound travelers, making exiting the country a problem.
All this has made Europe a good choice for travelers in an upside down year. Traveling by rail in Zurich could be cheaper than renting a car in Cleveland.
This article was provided to The Associated Press by personal finance website NerdWallet. Sam Kemmis is a writer at NerdWallet. Email: firstname.lastname@example.org.
NerdWallet: How to factor inflation into your 2022 travel budget https://bit.ly/nerdwallet-travel-inflation-how-it-will-affect-your-2022