Will the cost of a vacation ever go back down?
- Vacation costs have skyrocketed over the past few years
- People are looking for ways to go on cheaper trips
- Experts say the situation isn't likely to get better soon
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(NEXSTAR) – Along with eggs and breakfast cereal, the cost of a vacation has skyrocketed in recent years – but will it ever go back to pre-pandemic prices?
Experts say don’t bet on it.
“Some categories might see price decreases, but we should also be focusing on whether prices will continue to rise in the future,” John Horn, professor of practice in economics at Olin Business School at Washington University in St. Louis, told Nexstar. “The price level may not fall, but if it stops rising further, then over time we’d want to see if wage growth caught up so that the buying power when traveling returns to prior levels.”
According to the U.S. Travel Association, the Travel Price Index for March was 21.5% higher than it was for the same month in 2019. The index tracks the cost of airline fares, motor fuel, transportation within and between cities, recreation, lodging and restaurant costs.
In the past year, the greatest single increases were for plane tickets (17.7%), food away from home (8.8%) and lodging (8.1%). Motor fuel fell by 17.3% over the last year, but was still 34.4% higher than in March 2019.
Both the hotel and restaurant industry have been hit hard by a combination of staffing shortages and higher wage pressure, Bankrate Senior Industry Analyst Ted Rossman said.
If you’re still planning a vacation for this summer, Rossman has some tips including what not to do.
“There’s a danger in hoarding rewards points because these programs change over time, and usually not for the better,” Rossman said. “I would also stress that people should avoid credit card debt, if at all possible. I don’t want to tell people they can’t have any fun but the average credit card rate right now is over 20% and that’s a record high.”
Rossman also recommends that people make use of the vacation days given by their employers. Past surveys found that a sizable percentage of Americans leave vacation time unused.
“I hope people can take some time off this summer and relax and recharge,” Rossman added. “I think there’s a good chance that people can also take a road trip somewhere or fly somewhere if it’s in budget, but I do think it’s important to take a little time away and break the routine and recharge a little bit.”
