The holiday season is an opportunity to slow down, connect with friends and family or even take a much-needed vacation. But according to a new Bankrate survey, a substantial portion of travelers are rethinking their excursions this year. Of the 43 percent of U.S. adults planning to travel this holiday season, about eight in 10 of those travelers (79 percent) are changing their plans this year due to inflation and rising prices, the survey found.
Here is what others say they will be doing, and how you can get the most travel bang from your bucks.
How holiday travelers will change their plans
Holiday travelers will be adjusting those plans in several ways. The most popular money-saving tactics include:
- Traveling for fewer days (26 percent)
- Engaging in less expensive activities (25 percent)
- Opting for cheaper accommodations and destinations (25 percent)
- Taking fewer trips (24 percent)
- Traveling shorter distances (23 percent)
Escalating airfare and gas prices are a factor in many of those decisions. In fact, 23 percent of travelers say they will drive rather than fly to their holiday destinations. Conversely, 12 percent are opting to fly instead of drive.
People are also turning to their credit cards to cut costs, with 22 percent of travelers saying they will use accumulated rewards to fund holiday travel, including miles, points and other loyalty programs.
“Using credit card rewards, frequent flier miles and hotel points can save you a lot of money,” says Bankrate.com senior industry analyst Ted Rossman. “Many people have amassed a lot of these and haven’t traveled much the past few years, so it’s a good time to cash them in. They won’t get more valuable over time.”
Inflation’s impact across income groups
Household income is a major factor in who is making the majority of the holiday travel adjustments. This is not surprising, since inflation primarily impacts people who earn less. An August 2022 Gallup poll found that 74 percent of lower-income Americans are experiencing either severe or moderate financial hardship, compared to 56 percent of the population as a whole.
Bankrate’s survey found that 86 percent of holiday travelers with annual household incomes under $50,000 will change their plans due to inflation and rising prices.
That doesn’t mean people with higher incomes aren’t affected: 79 percent of the holiday travelers earning between $50,000 and $79,999 say they are changing their holiday plans due to inflation and rising prices. For those earning between $80,000 and $99,999, it’s 77 percent. For households earning $100,000 or more, it’s 70 percent.
Expecting young people for the holidays? You may have to go to them
If you’re hosting the festivities this year, you may want to prepare for fewer faces around the table — or to visit them instead. This is especially true if you’re expecting guests from younger generations.
According to Bankrate’s survey, younger people are more apt to say inflation is driving their holiday travel plan changes. Gen Zers and millennials are most likely to change their plans because of rising costs, with 82 percent of each age group saying so.
People from older generations are also feeling the financial pinch, though. The survey found that 78 percent of Gen Xers and 73 percent of boomers cite inflation as the reason for tweaking their holiday travel plans.
If you want to maximize attendance at holiday festivities this year, consider gathering near your youngest family members to eliminate some of the financial strain on those most likely to experience it.
Holiday pre-planning is trending
Higher travel prices and increased travel disruptions are only adding to the stress many Americans are feeling. Looking ahead, 32 percent of holiday travelers say the expenses will strain their budgets, 31 percent are worried their travel plans will be disrupted, and 22 percent say they feel pressured to spend more than they’re comfortable.
The good news is there is still time to prepare and get the best deals.
“Travel costs have surged, so it’s important to plan ahead and factor these expenses into your overall holiday budget,” says Rossman. “Airline fares are up 28 percent over the past year. Lodging away from home, on the other hand, is only up 1 percent. I suggest making airplane and hotel reservations earlier than in previous years, since demand will probably outpace supply. This summer, air travel was particularly messy as consumers unleashed pent-up demand and the industry couldn’t keep pace.”
Some consumers have already started to get ahead of the costs by booking in advance.
Among holiday travelers requiring travel reservations, 16 percent booked before September, and 15 percent planned to book in September. The highest portion, 22 percent, will make their reservations in October, and 21 percent will book in November. Just 11 percent will book in December. A sizable 16 percent of the respondents, though, said they didn’t know what they would do.
Holiday travelers will be careful with credit
So how will consumers pay for their holiday travel expenses? The survey found 49 percent of holiday travelers plan to pay (or have already paid) with a debit card or cash, 38 percent with credit cards that will be paid in full before interest accrues, 21 percent with rewards points, 18 percent with credit card(s) paid back over time and 8 percent with buy now, pay later services.
If you’re wondering how you can ease the financial pressure of travel this holiday season, remember that a great travel credit card can come to the rescue. Many come with built-in perks and benefits that can reduce expenses, such as free checked bags and travel insurance that can save you from the high cost of flight delays and cancelations.
This may also be the ideal time to open a new card. Consider one that comes with a valuable sign-up bonus. You can book your travel plans to meet the minimum spend and get the rewards bonus to pay for something else that you need. A 0 percent APR intro offer can be perfect if you want to have the flexibility of paying off your travel expenses for a year or more with no interest added.
With the unpredictability of inflation, the right credit card (used responsibly) can take you where you want to go — into 2023 and beyond.
Methodology: Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,455 adults, including 1,055 who anticipate traveling for the holidays and 829 who require travel reservations. Fieldwork was undertaken between September 7-9, 2022. The survey was carried out online and meets rigorous quality standards. It employed a nonprobability-based sample using quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.