Travel Inflation Report: December 2023

Some good news for travelers: Airfares are not significantly cheaper than they were this time last year.

Last month, airfares were down 13.2% versus the same month in 2022, and they are 5.3% lower than what they were in October 2019, before the pandemic. That’s according to the latest set of Consumer Price Index data released in November 2023 from the Bureau of Labor Statistics, which is based on October 2023 prices.

Car rentals price are also lower — down 9.6% versus October last year. Hotel prices are relatively flat over the past year.

The relative lack of price increases in the travel industry should come as good news to budget-minded vacationers, especially considering that the price of pretty much everything else is going up. In fact, average consumer prices across all items rose 3.2% year-over-year through October.

According to NerdWallet's Travel Price Index, the overall cost of travel is down 2% from the same month in 2022 and up 10% compared with October 2019. In short, expect the same trip taken this year to cost slightly less than it did this time last year (largely due to the steep drop in airfares) — but it’ll cost more than the pre-pandemic prices.

NerdWallet's Travel Price Index combines data from individual travel categories tracked by the Bureau of Labor Statistics' Consumer Price Index data, such as airfares, lodging, meals and rental cars.

Inflation continues to cool

Overall prices for the past 12 months through October rose 3.2% before seasonal adjustment. That's a deceleration from past month and is an encouraging sign for economists. Still, not every individual line item experiences inflation at the same rate — especially when it comes to travel prices. Some types of trips might actually be more or less expensive than in the past, depending on if your trip involves airfare versus driving, if you’re staying in a hotel and whether it involves a rental car.

To help you better understand how travel prices have changed, NerdWallet honed in on five categories:

• Airfare.

• Car rentals.

• Food away from home.

• Hotels.

• Movies, theaters and concerts.

NerdWallet then compared those costs to their same prices a month ago and a year ago. And given how significantly COVID-19 altered the state of travel, the data also compares today’s prices to the same cost of those things pre-pandemic. For example, October 2023 is compared to October 2019 as the last corresponding pre-pandemic month.

Here’s what today’s travel prices look like:

Airfare

Airfares have remained mostly flat over the past month, but they get interesting when you look at a broader timeline. When comparing October 2023 prices versus October 2022, U.S. airfares are down an incredible 13.2%. Even compared to pre-pandemic prices, airfares are 5% lower in October 2023 than they were in October 2019.

Of course, airfares saw an especially large spike last year as travelers returned in droves to take all those revenge travel vacations (even if airlines and hotels weren't ready for them). Some experts say that spike in demand without the matching increase in supply led to higher prices.

Hotels and motels

Prices for lodging away from home — including hotels and motels in U.S. cities — went down 7% month-over-month and are largely flat (up a nominal 0.9%) over the past year.

Unlike airfares that are lower than pre-pandemic prices, hotel and motel prices are significantly higher than what they were pre-pandemic.

Car rentals

High rental car prices have been one of the biggest stories of pandemic-era travel, especially after renters last summer witnessed record-high prices in July 2021.

Car rental prices seem to have reached their top and continue to mostly drop, down 9.6% year over year. Still, rental cars are far from cheap. Prices are up an astounding 33% versus the same month in 2019. Luckily though, prices aren’t quite as high as they were this time last year.

Food away from home

Food prices consistently rise every month, and this month was no exception. In October 2023, the cost of food away from home was up 5.4% versus the same month in 2022. And prices are far higher than pre-pandemic, with October 2023 prices coming in at 25.1% higher than what they were in October 2019.

Movies, theaters and concerts

Like restaurants, entertainment prices see fairly consistent increases — save for a small dip in 2020. Prices are now up nearly 16% from what they were in October 2019. The year-over-year price increases, though, haven’t been as drastic — up just 4.5%.

If you’re planning to travel in 2024…

Especially if you’re building your next vacation budget based on an early-pandemic-era trip, expect to pay far more now for pretty much every expense. Yet even though prices constantly feel like they’re getting higher, you can still save on travel with a little planning.

Paying for travel with miles and points versus cash isn’t as daunting a task as it may seem. Frequent flyer miles and hotel points can be accrued not just for recurring travel, but through other outlets as well. Credit card rewards and welcome bonuses can be one of the most popular ways to accrue a big stash of points for a lot less effort than living your life out of a suitcase.

To avoid the costs of eating out, head to local grocery stores — which can be a fun activity on its own — or pack snacks from home. While in an airport, head to the lounge. Many credit cards have partnerships with airport lounge operators (Priority Pass is a popular one) where you can typically expect complimentary snacks and drinks.

Methodology

NerdWallet conducted an analysis of the Bureau of Labor Statistics’ Consumer Price Index data released by the U.S. Department of Labor, which was most recently updated in November 2023 and measures prices of items like travel, groceries and cars. Prices usually change every month, but some prices change more than others.

Keep in mind, this data is based on October 2023 information, even though it is released in November 2023, so prices you actually see may have actually improved (or gotten even worse) than this data, because it lags one month behind.

And even within the realm of travel, some expenses might go up, while others might go down.

The NerdWallet Travel Price Index combines data from the Consumer Price Index, weighted by the estimated spending in each category, which is based on 2019 travel expenditure data from the BLS.

Here are the spending categories considered, and how heavily each was weighted:

• Flights: 29%.

• Car rental: 13%.

• Lodging: 30%.

• Food: 21%.

• Entertainment: 7%.