This is not the way that supply and demand works. Air travel is close to returning to pre-pandemic levels, with COVID-19 less of a threat. The demand for vacation rentals is high, and hotels are already full.
Jamie Lane, vice-president of research at AirDNA (a platform for tracking trends in vacation rental data platforms Vrbo and Airbnb), stated that “demand across the board is up 20% to 25% for summer 2022 travel relative to 2019”.
Summer travel costs could be affected by volatile oil prices. According to the U.S. Energy Information Administration, the price of U.S. Gulf Coast kerosene type jet fuel reached $3.77 per gallon for March. This is an increase from $0.46 per gal at its lowest point in May 2020.
There are many factors that drive travel costs up. Where can you find deals? What destinations should budget-conscious travellers avoid?
Some people zig, others zag
Consumers have been reminded by the rise in inflation that prices will go up when there’s not enough. This holds true for airfare, microchips, and real estate.
It’s important to understand where there is still high demand when you plan your summer vacation.
Lane said that vacation rental occupancy rates are up 40% in destinations resort areas compared to 2019.
Mexico is a popular destination for Americans due to its proximity and ease of testing. In fact, March 2022 saw a nearly 20% increase in the number of tourists to Mexico compared to 2019.
There may still be summer deals in Mexico, but they will be more difficult to find than those in less-popular destinations. This is especially true for destinations in rural areas of the United States, particularly those near national parks.
Lane stated that small-town rural areas are the most in demand. “Demand has risen by twofold in 2019”
Lane recommends instead that you target destinations that are heavily dependent on foreign tourists and take longer to recover tourists.
“Places such as Greece, Italy, and Croatia have taken a long time to recover. They are currently down anywhere from 40%-60% in demand. They haven’t experienced the same price increases as the U.S.
According to data from Hopper (a travel booking app), flight bookings to Europe fell after the Russia-Ukraine conflict. This suggests that summer travel to Europe could be slow. Deals could and should follow.
“A last-minute booking for Croatia?” Lane stated that you’ll find great deals.
Book some things late
Travel plans have been redesigned by the pandemic. Many people book trips weeks in advance instead of committing months ahead. This approach, contrary to popular travel wisdom, is a great way to get deals.
Lane stated that “Generally speaking, bookings made far in advance will result in higher prices.” He pointed out how Airbnb’s pricing algorithm drops prices last minute to fill available availability. “If you book closer to your stay date, you will get a discount if it isn’t booked.”
Hotels are also cheaper to book within weeks or days than it is for months. Similar to hotels, rental cars can be found more easily if you wait until the last minute.
Two caveats are required to be aware of this advice. The first is that prices can rise if there is more demand than supply for a destination. Worse, if demand exceeds supply, prices could rise rather than fall.
Second, last-minute flights are usually more expensive. It’s not a rule that applies everywhere. Last-minute deals are possible, but they’re less common than a month out.
Be flexible
Everything is all we know about this summer. There could be another variant. The possibility exists that borders could be closed. International conflict could escalate. We don’t know.
Flexibility is essential to find deals as a traveler.
Instead of making a plan to travel to a specific destination, you should follow the deals. Find out what accommodation and airfare deals are available for your target dates and plan your trip around them. Budget travel requires flexibility. It’s essential.
Book travel that is easily cancellable or can be changed. You might be charged high cancellation and change fees for booking airfare with Spirit Airlines, a low-cost airline. Basic economy fares are usually not refundable or changeable.
