Many Americans are planning to travel this summer. Most hope to find a bargain.
Unfortunately, that’s not how the law of supply and demand works.
Air travel is almost back to pre-pandemic levels. Hotels are filling up and vacation rentals are exploding.
“Overall demand for summer travel in 2022 is up 20% to 25% from 2019,” says Jamie Lane, vice president of research at AirDNA, a vacation rental data platform that tracks vacation rental data. trends on Airbnb and Vrbo.
Oil price volatility could also impact summer travel costs. The price of kerosene-type jet fuel on the U.S. Gulf Coast hit $3.77 a gallon in March, down from $0.46 a gallon at its May 2020 low, according to the U.S. Energy Information Administration.
With so many factors pushing travel prices up, where are the deals? And which destinations should budget-conscious travelers avoid altogether?
ZIG WHILE OTHERS ZAG
Rising inflation has reminded consumers of a simple economic truth: when everyone wants something and there isn’t enough, prices go up. This is true for real estate, microchips and airline tickets.
So, when planning a trip for this summer, it helps to know where demand remains high.
“Resort areas are up 40% from 2019,” Lane says of vacation rental occupancy rates.
Mexico has been a particularly popular destination for American travelers, due to the proximity and easy-going testing requirements. Indeed, the number of travelers to Mexico in March 2022 increased by almost 20% compared to 2019 levels.
Deals for summer trips to Mexico may still exist, but they will be harder to find than in less popular destinations. The same goes for rural US destinations, especially those near national parks.
“The greatest demand is for rural areas in small towns,” Lane said. “Demand has doubled compared to 2019.”
Instead, Lane suggests targeting destinations that rely heavily on foreign visitors and have been slower to pick up tourists.
“Places like Croatia, Italy and Greece have been very slow to recover and demand is down 40% to 60%. They haven’t seen the price increases we’ve seen in the US “
Flight bookings to Europe plummeted after the start of the Russian-Ukrainian war, data from Hopper, a travel-booking app, shows, suggesting travel to the continent could remain sluggish through the summer . This means agreements could (and should) follow.
“A last minute booking in Croatia? You’re going to find a good deal,” Lane says.
RESERVE (SOME THINGS) LATE
The pandemic has reshaped the number of travelers planning. Instead of setting dates months in advance, many started booking trips just weeks later. And despite a lot of conventional travel wisdom, this approach is actually a good way to close deals.
“Generally, if you book far in advance, you’re going to pay more,” says Lane, pointing out that Airbnb’s pricing algorithm will drop prices at the last minute to fill remaining availability. “As you get closer to the date of the stay, if it is not booked, you will get a discount.
The same goes for hotels, which are often cheaper to book within a few weeks or days of your stay rather than a few months. Likewise, deals on rental cars are usually easier to find at the last minute.
This advice comes with two big caveats. First, if demand exceeds supply at a particular destination, prices could actually rise in the few weeks leading up to a trip rather than fall. Worse still, availability could dry up completely, leaving few cars or vacation rentals available.
Second, last minute airline tickets are usually more expensive. This is not a hard and fast rule – last minute deals may appear, but they are more common a month or so.
The one thing we don’t know about what will happen this summer is everything. Another variant could emerge. Borders could close. International conflicts could worsen. Who knows.
As a traveler, that’s why flexibility is a must when it comes to finding deals.
Rather than making a firm plan to visit a particular destination, follow the offers. Discover airfare and accommodation deals available on target dates and create a trip based on them. Flexibility has always been important for budget travel. Now it is necessary.
Be sure to only book trips that can be easily changed or cancelled. A good deal on airfare with a low-cost airline such as Spirit Airlines could lead to steep change and cancellation fees. The same goes for basic economy fares, which generally cannot be changed or canceled at all.
This article was provided to The Associated Press by personal finance website NerdWallet. Sam Kemmis is a writer at NerdWallet.