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Will Inflation Impact Your Upcoming Travel Plans?
We’re all excited to see more people traveling again, if only because it signals some degree of normalcy returning after the better part of two years living amid COVID-19. Of course, there’s also a downside to so many people hitting the roads and taking to the skies, which is that, as demand again approaches the amount of supply, things get more expensive.
A Washington Post report revealed that the cost of almost every aspect of travel increased last month, with airfare being the one major exception. According to the U.S. Travel Association’s Travel Price Index, travel-related prices jumped 14.4 percent in October of this year in comparison with the same month last year.
Overall U.S. inflation spiked by 6.2 percent compared to 2020, representing the most substantial year-over-year increase of the past three decades. It will come as no surprise to anyone with a vehicle that the high cost of motor fuel—up by almost 50 percent last month compared with October 2020—is playing probably the biggest role in driving up travel costs. Followed by increased rates for hotel and motel rooms, which have risen more than 25 percent.
Also on the rise are the costs of buying food and alcohol while on the road, ground transportation (e.g., taxis and ride-share services), and prices for recreational activities, such as admission to concerts or sporting events. While prices for just about everything seem to be going up, the rise in travel costs is particularly steep because there’s so much more demand this year compared to last.
The U.S. Travel Association’s executive vice president of public affairs and policy, Tori Emerson Barnes told the Post that, due to the extreme lows that travel hit in 2020, it would be fairer to compare this year’s prices to those seen in 2019. But, still, today’s prices are higher than they were pre-pandemic.
Last month’s travel prices were still 6.2 percent higher than in October 2019. Fuel costs are nearly 23 percent higher, lodging comes 5.5 percent dearer, and food (9.3 percent) and alcohol (6 percent) purchased away from home more expensive than two years back.
There’s really only one major travel expense that doesn’t follow the trend: airfare pricing, which is down 4.6 percent in comparison to 2020 and a whopping 24 percent compared with 2019. That’s due to the fact that air travel hasn’t rebounded to pre-pandemic levels and that a hefty portion of business travelers, who typically are bigger spenders in terms of airfare, still aren’t taking trips.
With travel demand quite evidently being pretty robust for the upcoming holiday season, it doesn’t look like there’s a price break coming in the near future. “I think through this holiday season we can pretty much forecast that there’s probably going to be higher prices,” said John Horn, professor of practice in economics at Olin Business School at Washington University in St. Louis, Missouri. “Next summer, I don’t know. There are too many unknowns.”