The COVID-19 pandemic has forced many Americans to rein in their travel plans—but now it’s making a comeback. And despite today’s high inflation environment, Americans are still willing to spend on vacation.
Latest Transunion Spring Summer Tourism Report 202346% of respondents said they plan to travel more this spring and summer than last year, with 47% planning to travel for the same amount and only 8% saying they plan to travel for the same amount of money. travel less.
Americans are making travel a priority
Not only are Americans traveling again, but many households are also planning to travel more and take longer trips than in the past. Research shows that most households (54%) plan to take one or two trips during the spring and summer tourist season, with 45% planning to go away for 4 to 7 days and 33% planning to go away. more than 8 days.
Even households with multiple family members don’t let higher costs get in the way of their travel plans. In fact, data shows that nearly half of families with children plan to spend more on travel this year.
“After years of feeling pent-up, Americans crave travel and make travel a priority despite a challenging economic environment,” said Cecilia Seiden, TransUnion’s vice president of hospitality and tourism business, said in a statement. “While that sentiment seems almost universal, the specifics of when, why, where, and how vary greatly.”
Latest Consumer price index (CPI) shows a price increase of 4.9% year over year. While the latest figures are a far cry from last summer’s peak of 9.1%, the inflation rate is still well above the Fed’s desired 2% target.
Even so, many families have gotten creative and opted for more affordable travel plans, including taking road trips instead of flying, staying close to home, and choosing to stay with family and friends.
Many households are taking out loans to cover travel costs
For families who don’t have the money to cover travel costs, research shows that taking on new debt and using alternative payment methods like credit cards and buy now, pay later platform made traveling that fit their budget even easier.
Of those surveyed, two-thirds of households plan to pay for their spring and summer travel with cash or a debit card, while 57% of households plan to use a card. their credit, even with a large sum. higher borrowing costs thanks to an increase in the federal funds rate.
Buy now, pay later platforms can make it easy to pay for purchases that are out of your budget by breaking down your gross costs into smaller, more manageable installments. These installment loans may come with interest rates and fees that vary between platforms. Typically, merchants will partner with a buy now, pay later platform and offer the platform as a payment method at checkout.
Note: this payment method can often come with higher interest rates and shorter terms, although many platforms offer interest-free periods. Credit cards, on the other hand, offer revolving lines of credit and more flexible repayment terms, but APRs are also hitting higher averages. The Latest data from the Fed shows the average credit card APR at 20.92%.
However, experts say that relying on your credit card to cover expenses may not be such a bad thing.
“Consumers are increasingly savvy about maximizing financial opportunities while traveling and can use credit cards to accumulate rewards points, with plans to pay off balances instantly. Others may be using a hotel or airline-branded credit card to get an upgrade on their flight or accommodation. Regardless of the type of credit, families must realistically consider their financial situation when planning vacations to make sure they can meet any debt obligations they may have, Seiden said. bear on your trip.
Tips to save money when traveling this summer
If you’re hoping to venture away from home and travel this summer, there are plenty of ways to save and make expenses more manageable.
- Join the rewards program: If you’re loyal to a particular airline or hotel chain, joining their rewards program can get you discounts or free perks. “Make sure to sign up for any travel rewards program to save money through point redemption and short-term perks like free Wi-Fi, bottled water, and free nights for longer stays. If you travel often, check out a rewards credit card. Features like free checked baggage can cost several times the annual fee,” Seiden said.
- Cash in your credit card rewards: Depending on the type of credit card you have, you may have points and miles that you can redeem for hotel stays, airline tickets, cabin upgrades, and more—many credit card companies like American Express, Capital One, Chase, and Bank of America all help with travel reservations. travel a lot easier through their one-stop travel portal, where you can redeem your rewards for a number of travel-related purchases.
- Add a line item to your budget ahead of time: This may be the most obvious, but paying for your trip in advance, rather than taking on more credit card debt, will save you a lot of interest over time. If there’s still some time before you plan to book your travel, consider adding a line item budget travel expenses—the sooner the better. That way, when it’s time to book a trip, you won’t waste your monthly budget.
- Be flexible about the timing of your trip. Your commuting costs can add up significantly if you want to get out of the city during the busy season or on a holiday weekend. If you’re wobbly about your holidays, compare the cost of accommodation and/or airfare for different dates to get the best deal.
Many tourists are eager to return to tourism, and many even have to take out new loans to cover costs. However, if you’re looking to venture to a new destination this summer, there are ways to do it without impacting your personal finances. Through a number of strategic plans, cost-cutting measures, and smart savings strategies, you can enjoy your dream vacation without compromising your budget.