The latest report reveals that 77% of Americans are altering their holiday travel plans due to inflation and 16% are anxious about incurring debt as a result.
Inflation represents the gradual increase in prices for goods and services over time and is typically a normal component of a healthy economy. However, when inflation reaches excessive levels, it can have collateral damage to people’s livelihoods.
Amidst the rising cost of living and inflammatory pricing of essentials, Travelling is a luxury most can not afford like they could before 2019, However, Despite the rising costs of things like gas and hotel stays, experts are saying this could be the busiest holiday travel season since 2019. According to Bankrate’s senior industry analyst Ted Rossman, it’s just going to have a slightly different look.
“People are really prioritizing experiences,” Ted Rossman told Scripps News. “They have actually cut back on a lot of spending on physical goods. But when it comes to travel and dining and concerts and sporting events, people are still really prioritizing those kinds of expenses.”
Consumer prices in September rose nearly 3.7% from a year earlier. While still high, inflation is slowing, and Rossman points out that air travel will gradually make a return considering that ticket prices and cancellations are falling.
Ted Rossman added, “Prices are still high, That’s sort of an unfortunate reality about the whole inflation situation, which is that even as inflation comes down, it doesn’t necessarily mean we’re rolling back to 2019 prices. It just means they’re growing more slowly.”
This signals a significant departure from the customary holiday travel patterns, with 27% of respondents revealing to Bankrate that they’re choosing road trips over air travel this season. Additionally, approximately one in four individuals expressed intentions to curtail their travel plans altogether.
Interestingly, it appears that GenZ and individuals earning an annual income under $50,000 are the demographic segments most inclined to adapt their plans in response to the effects of pervasive inflation.
Rossman pointed out that finding cost-cutting opportunities during the holiday season can be more challenging due to reduced flexibility in comparison to summer travel. However, there are still ways to economize, such as scheduling travel on off-peak days, taking advantage of airline and hotel loyalty points, or employing credit card benefits.
“A lot of credit cards have travel insurance built-in at no additional costs — sometimes perks if your luggage is lost or delayed, or your flight is delayed or canceled,” Rossman added. “Maybe they can kick in for a replacement or at least some meals and accommodations while you’re stranded.”
The latest report underscores the enduring relationship between holidays and tradition while highlighting the ever-present influence of inflation in introducing dynamic shifts to the equation.
Inflation is worse for individuals who have a fixed income e.g. retired soldiers or individuals with disabilities. For instance, consider a retired man receiving a fixed monthly income of $2,000; high inflation would erode his ability to afford the same necessities, given the increasing prices of essential goods and services.
The average cost of a gallon of gasoline has surged by over $2 in the past year, increasing commuting costs for those dependent on personal vehicles. Likewise, the average price of a new home has risen by more than $100,000 within a year, imposing greater financial burdens on men aiming to purchase homes.
According to a recent study conducted by the American Psychological Association, financial stress ranks as the primary source of stress for Americans. The study suggests that whenever possible, citizens should avoid accumulating debt to cover their expenditures, as this may exacerbate their ability to cope with long-term inflation.
In the same report, Bankrate revealed that 21 percent of holiday travelers will use a credit card and pay the balance over time and 8 percent will use a buy now, pay later service. Rossman had his say on this matter, he said:
“You still have time to save money from every paycheck between now and the end of the year to avoid a holiday debt hangover,” Rossman says. “With credit card balances and interest rates both at record highs, you don’t want to be still paying off this Christmas a year from now — or worse.
