Inflation has affected most parts of Americans’ lives, and it carries over into vacation as prices for airfare, hotels, and food have significantly increased since the pandemic.
Key Details
- The overall cost of travel is up 9% over the past year—outpacing the overall 6.4% inflation rate, according to NerdWallet’s travel price index.
- Vacation prices for January 2023 were 12% higher than January 2022 and up 15% from January 2020.
- Hotel rates are up 8.5% year-over-year, restaurant prices are up 8.2%, and airfares are up 26%.
Why it’s news
Primarily due to factors brought on by the pandemic lockdown, the U.S. has been in a state of shortages and high inflation. Inflation has booster prices, including gas, groceries, cars, and vacations.
Vacation prices have soared since the pandemic, with a significant jump happening in the last year.
Airfare prices were incredibly low during the pandemic as many travel bans were put on places nationwide, so to entice customers, airlines were lowering ticket prices. Now airline ticket costs are skyrocketing.
From January 2022 to January 2023, airfare prices increased by 25.6%, hitting a record high in May 2022. Prices have dropped 23% from the peak in May, but the prices are still 26% higher than in January 2022.
Hotels also saw a significant decrease during the pandemic as room rates dropped to the lowest level since 2013. Like others, rates began increasing again, hitting a high in May 2022. January hotel rates were up 8.5% to January 2022 and 16% higher than pre-pandemic levels.
From January 2020 to January 2023, car rental prices rose 36%, with the high hitting in July 2021. Car rental prices have dropped 4.6% month-over-month since the peak in July 2021 but are still extremely high compared to 2019.
Another vacation price that has risen is dining out. In January 2023, the cost of eating away from home was up over 8.2% versus January 2022. Prices have jumped high in the last year, but an even more dramatic jump is the 19.6% rise from January 2020 to January 2023.
The costs of most food has risen in the last few years. For example, inflation for chicken in 2020 was 4.96% and then rose considerably in 2022 to 14.82%, according to details in the Consumer Price Index number. These sharp price increases led restaurants to increase prices—making a more expensive dining out experience.
The overall cost of travel has risen 9% in the last year and even more since the pandemic, but analysts are hoping the rates will begin to come down, but many do not expect a decrease until after the 2023 vacation season is over.