(NerdWallet) – July marks the halfway point of summer, so if you’re planning on traveling soon, be prepared to see inflation almost every step of the way.
According to a May NerdWallet survey, nearly 7 in 10 Americans planned to travel between Memorial Day and Labor Day, and of those, 81% said inflation would impact their plans. This number has increased for young adults like millennials (89%) and members of Gen Z (87%).
And they are right. There is no getting around inflation this summer. Recently released data for June 2022 puts inflation at a staggering 9.1%, a new 40-year high in the United States, according to the Bureau of Labor Statistics.
The surge in prices since June of last year is staggering. People are not only paying the price at the gas pump (with a national average of $4.65 per gallon) and at the grocery store (food costs have increased by 12%), but they are also spending more on items summer travel keys. Airfares were up nearly 34%, restaurant meals were up about 7.7%, and hotel stays were up 11.5% over the same period last year.
Although inflation at this level is beyond the control of ordinary Americans, you can keep your travel plans in place debt-free by getting your priorities straight and using creative booking strategies to make the most of your trip.
Evaluate your travel saving tools
Count your loyalty points and miles
About a quarter (24%) of summer 2022 travelers said they plan to cut travel costs due to inflation by using their rewards points or miles. You can cover the cost of your entire flight or simply use points to make the costs more manageable. Many people accumulated these points during the pandemic when travel was restricted.
Tap airline and hotel loyalty programs, plus credit card benefits
Perks like free checked bags or access to airport lounges that offer free food can save you a lot of money, especially if you’re traveling with your family. Food at the airport can be expensive, so saving on food and drink for each person in your party can mean big savings. Most hotels offer free loyalty programs where you earn points on your stay and possibly free nights.
Shorten your trip
Summer travelers have to make sacrifices this year to help mitigate the impact of inflation. With accommodation costs rising, more than a quarter (28%) said they plan to travel fewer days to save money. If you do the same, you can then use the savings for other things like restaurants and tourist attractions.
Book on weekdays to avoid weekend price increases
More than half (57%) of Summer 2022 travelers said relaxed workplace policies, such as hybrid schedules and remote working, would make it easier to travel this summer. If you have a flexible work schedule, booking on weekdays can often reduce your costs, as accommodation prices are usually higher closer to the weekend.
Find free activities to do at your destination
Planning a mix of paid and free activities can really help you stick to your budget. Sure, splurge for the tour, cooking class, or experience you’ve been dreaming of, but mix in a few free activities (eg, museums, parks, or window shopping) to keep your travel budget on track.
Reduce transportation costs to your destination
In the past, travelers could decide to drive to their destination or rent a car to counter high airfare costs. 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, that’s not -not be the economic alternative it once was. Here’s what you can do instead.
Book a hotel or vacation rental in the city center
Before you book, sit down and identify the restaurants, attractions, and other places you want to visit and find accommodation in a central location to reduce travel costs around town or the need for a rental car. While there may be some things you want to do that aren’t within walking distance, this strategy will help you save big.
Don’t neglect public transport
If you’re traveling to a big city, don’t overlook public transportation options like the metro, buses, or even bike-sharing. Using one or more of these options is likely much more affordable than renting a car or using a ride-sharing service, and you might even see more of your destination.
If you need a rental car, book early
If you need to get a rental car at your destination, book one early and check prices and availability before you even book your flights. You can always monitor the price as your trip gets closer and cancel your old booking and rebook at the new lower rate. And with gas prices so high, book the smallest, most fuel-efficient car that will meet your needs. In other words, resist the SUV upsell.
Make your home more affordable
Hotel costs have skyrocketed due to inflation, but there are ways to cut your expenses if you get creative and are willing to trade some privacy for savings.
Stay with friends or family near your destination
If you have friends or family who live near where you are traveling, consider asking them if you could stay with them. Not only could it save you money, but it could help you combine two trips into one, especially if you had already planned to visit.
Redeem loyalty points for free stays or discounted rates
If there’s a hotel chain you really like, join their loyalty program and plan to book direct. If you’re already a member, you may have already accumulated enough points for a free night or two.
Other perks and benefits of these hotel loyalty programs may include free breakfast, restaurant credits, or waived resort fees, all of which can add up.
One tip to keep in mind when deciding which hotel loyalty program to join: the larger the hotel chain, the more likely you are to find participating hotels for future travel.
Book a hotel with free breakfast or happy hour
Using these perks can lower your restaurant bills. While the food or wine might not be worthy of a Michelin star, it might just be the savings you need to avoid travel debt. This is especially true if you are traveling with children.
Book accommodation with kitchen or mini-fridge
One of the fun things about traveling is trying new restaurants, but it’s expensive to eat out every meal. Stocking a mini fridge with drinks, snacks, or even simple breakfast options can help you save big. Some hotel brands even offer full kitchens inside the room.
It’s never too late to start saving for next year
If you find yourself overpriced for summer travel this year but have a major case of FOMO (fear of missing out), start saving now. Once you have determined your destination, estimate the costs 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 building travel expenses into your budget throughout the year, you can save in small increments and put that money safely into a high-yield savings account to earn interest. To make this even dumber, try automating those bi-weekly or monthly payments into your savings account so you’re not tempted to spend that money elsewhere.
With a dedicated Travel Expenses Savings Basket, you’ll have cash in hand to offset travel expenses as you book them, rather than racking up travel debt. Plus, make the most of your points and miles to cut travel costs, or consider signing up for a new travel credit card (provided you pay the bill on time) to get plenty of points in as a welcome bonus.