Inflation Is Putting a Damper on Summer Travel, Survey Finds
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Summer travel season is upon us, and millions of Americans have plans to get out of town. A new NerdWallet survey finds that more than 2 in 5 Americans (42%) plan to take a vacation that requires a flight and/or hotel stay in summer 2023. These summer travelers say they’ll spend $3,293, on average, on these travel expenses. That’s nearly 109 million Americans spending more than $358 billion on summer travel expenses this year, according to NerdWallet analysis.
The NerdWallet survey of more than 2,000 U.S. adults conducted online by The Harris Poll asked summer travelers about their credit card spending and actions they’re taking to save money. Of those surveyed, 890 — referred to as 2023 summer travelers throughout this study — say they plan to take a vacation that requires a flight and/or hotel stay this summer. We also asked those not traveling this summer why they’re opting out.
Some 2023 summer travelers could pay interest on their trip costs. More than a quarter of 2023 summer travelers using a credit card to pay for those travel expenses (26%) say they won’t pay off the balance within the first billing statement, meaning they will likely incur interest.
Nearly all 2023 summer travelers are trying to save money. Most 2023 summer travelers (92%) are taking action to save money on those travel expenses, such as choosing a hotel/motel/resort based on price instead of amenities (39%) or driving instead of flying (35%).
Inflation is keeping some from traveling this summer. Of Americans who don’t plan to take a vacation that requires a flight/hotel this summer, the most common reason they cite for not doing so is inflation has made travel too expensive (23%). And 16% of non-summer travelers say they are not partaking in summer vacations this year because inflation has made their other expenses too expensive, so they can’t afford to.
“Given increases in demand and ongoing staffing shortages, most travel costs are rising higher than the overall inflation rate,” says NerdWallet travel expert Sally French. “Because inflation is already high as-is, this summer is set to be rough for people seeking to travel affordably.”
Most summer travelers using credit cards, some going into debt
The majority of 2023 summer travelers (85%) plan to use a credit card to cover travel expenses, but this doesn’t mean most of these travelers are taking on credit card debt. The survey finds that nearly three-quarters of 2023 summer travelers using a credit card to cover those expenses (74%) will pay off the balance in full within the first billing statement, which means they won’t accrue interest on these charges. However, the remaining 26% won’t pay off the travel expenses within the first billing statement, so their summer travel might cost more than they budgeted due to interest charges.
Generation Xers (ages 43-58) are more likely to say they’ll carry a balance than other generations. For example, 37% of Gen X 2023 summer travelers who plan to put those travel expenses on a credit card say they won’t pay these off within the first billing statement. A smaller percentage of summer travelers in the other generations planning to use a credit card for their travel expenses say they won't pay them off with the first billing statement — 23% of Generation Zers (ages 18-26), 24% of millennials (27-42) and 18% of baby boomers (59-77).
Take steps to pay off travel credit card debt
Credit card debt is notoriously expensive, but even more so in recent months. The average interest rate on credit cards assessing interest is 20.92%, as of February 2023, according to the Federal Reserve Bank of St. Louis. That’s a lot of potential interest charges on top of your travel spending.
If you’ve charged summer travel expenses to a credit card — or plan to do so — create a plan to pay down this balance as quickly as possible so your vacation memories aren’t tainted by lingering credit card debt and costly interest. And then make a plan to save up for next year’s summer trip.
“If you can save for travel ahead of time, you’ll avoid paying interest on payments you might otherwise make on a credit card,” French says. “That said, if you’re going to book travel that you intend to pay for later, make a clear plan for how you’ll make those payments. And if you find room in your budget to pay down vacation debt even earlier than you intended, that’s even better.”
Majority of summer travelers aiming to save money
Most summer travelers are taking steps to keep costs down after a year of significant price increases. Of the 2023 summer travelers, 92% say they’re taking action to save money on those travel expenses, such as choosing a hotel/motel/resort based on price instead of amenities (39%) or a flight based on price instead of convenience (34%).
Consider using travel rewards on your summer trip
More than a third of 2023 summer travelers (34%) say they’re using credit card points/miles to save money on those travel expenses. A previous NerdWallet survey found that travel rewards credit cardholders have 55,300 points/miles, on average, and these travelers might save hundreds of dollars or more on their summer vacations.
“Unlike our advice on saving money, NerdWallet almost always recommends spending — rather than saving — travel rewards,” French says. “Just like inflation, points inflation is real; airlines and hotels regularly raise the number of points or miles needed to book travel. If you’re booking a flight on an airline you have miles with, it’s almost always a good idea to save your cash and pay for it with miles.
“Travel rewards can also function as an excellent savings vehicle. Using points and miles accrued throughout the year can be a better way to pay for travel, especially if the alternative is going into debt for trips.”
Inflation is keeping some non-summer travelers home
Inflation hit budgets hard over the past year, and travel expenses aren’t immune. According to the Bureau of Labor Statistics, airline fares are up 17.7% annually, as of March 2023. So it’s unsurprising that our survey found that of Americans who aren’t going on vacation this summer — at least not one that requires a flight or hotel stay — the most common reason is because inflation has made travel too expensive (23%).
Around 1 in 6 Americans who aren’t traveling this summer (16%) say it’s because inflation has made their other expenses too expensive, so they can’t afford to take a summer vacation.
Seek out more affordable travel options
High inflation is outside your control, but there may be options to free up money if you want to take a trip. That could mean cutting costs in your everyday spending or learning how to travel on a budget. Summer also tends to be a costly time to travel, so it might make sense to choose a less popular time to plan a vacation.
“Travel can certainly be prohibitively expensive for some families, but there are ways to make it more affordable,” French says. “Flexibility is key. Avoiding peak-season travel is certainly wise if possible, but even shifting your flight schedule by a day (or even a few hours) can impact airfares — sometimes by hundreds of dollars.
“And don’t overlook the power of credit card benefits in helping you save money. Aside from rewards, cards branded to airlines or hotels tend to offer money-saving benefits when you travel specifically with them. While exact benefits vary by card, they might include free checked bags or breakfast at hotels.”
This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Feb. 7-9, 2023, among 2,080 U.S. adults ages 18 and older, among whom 890 are planning to take a vacation that requires a flight and/or hotel stay in summer 2023. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Lauren Nash at [email protected].
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