How to Vacation on a Budget
Inflation and flight schedule disruptions make a lot of headlines. However, travel statistics show that travel plans are not being impacted as much as you might think.
By Labor Day, U.S. air travelers were returning to the skies at more than 98% of pre-pandemic levels, according to the Transportation Security Administration. Motorists hit the road in record numbers on July 4 despite high gas prices, according to the AAA. The global vacation rental marketplace saw a 60% increase in searches for vacation rentals for the summer season and a 9% increase in average length of stay.
Seasoned travelers are finding ways to cut travel expenses to manage budgets. Three in five travelers (61%) reduce their dining out expenses before cutting back on vacations and travel. According to Skift, they will do the same during the trip: eat out less and choose cheaper alternatives for their transport and accommodation.
According to the Global Rescue Travel Safety and Sentiment Survey, most travelers (79%) say inflation won’t change their plans, but 21% say it will. Their travel adjustments include traveling fewer days (21%), flying on cheaper airline tickets (19%), staying in cheaper hotels (15%), eating less or at less expensive restaurants (12%), and cutting back heavily or none Buy souvenirs or gifts during their trip (6%).
hot right now
How you travel by plane also plays a role.
“Smaller airlines and shorter routes are usually cut back by airlines because their pilots have to be used for the long-haul flights. It is advisable for travelers to choose more stable routes,” said Kimberly Franke, Montana-based Kanna Travel Services.
The city you are flying from also makes a difference. For example, you are in New York City and want to travel to Miami for a week-long vacation. You can fly non-stop to Miami from a major airport — like JFK — for $288 round-trip per person. Choose a smaller airport like White Plains/Westchester in the greater NYC area, and a non-stop round trip fare is $2,038 per person.
“Bigger cities can offer better routes and fares. Smaller cities are currently suffering from route cancellations and more expensive tickets,” said Franke.
Airline ticket prices do not increase as your departure date approaches. “Airlines sell out the lower fare class options first, and from there the fare class only gets more expensive. This is not a trend that is likely to change in the foreseeable future given staff shortages and gas prices,” said Franke.
In general, you should book six weeks in advance for domestic flights and four months in advance for international flights. Flights are usually cheaper on Tuesdays or Wednesdays.
Pre-booking is also a good idea for hotels. “Some hotels, like Four Seasons and Marriott, use dynamic pricing — the higher the projected occupancy, the higher the price for the available rooms,” said Mimi Lichtenstein, owner of Truvay Travel. Not all hotels offer discounts, but it’s worth asking about upgrades or negotiating rates for a longer stay.
Business travel is back, according to the US Travel Association. Businesses are planning in-person meetings as the top travel expense of 2022. Business travelers are capitalizing on this opportunity by spending downtime on work-related travel, a growing trend dubbed bleisure travel.
Virtual meetings simply cannot replace face-to-face meetings. Face-to-face interaction will always be more effective in building and maintaining relationships, fostering trust and driving business growth.
“The company typically pays for the flights if the extra days don’t add to the total cost of the flight. But don’t think of it as paid vacation time. If the free time portion of the trip falls on the weekdays, the employee is expected to use vacation days or work remotely and pay any additional free time costs incurred. Because of this, many traveling employees plan their trips to take advantage of long holiday weekends,” said Stephanie Diamond, vice president of Global Rescue Human Capital Management.
Currency exchange can help offset rising travel costs. Argentina, now open to all travel, is a good deal for US travelers as $1 is equivalent to 142 Argentine pesos, up 45% in value over the last year. The Canadian dollar is 13% more valuable than the euro over the past year, potentially leading to increased travel from Canada to the euro zone.
Be sure to exchange your money before returning home. Many currencies cannot be exchanged after you leave the country, or finding a facility that will exchange a specific currency can be difficult. For example, the West African Franc is extremely difficult to exchange for USD in the States.
Marietta Formanek, CPA, is Vice President of Accounting and Finance at Global Rescue. She has held senior finance positions at Orvis Co., AI Squared and is a KPMG graduate.