Travel Inflation Report: February 2023

Prices are coming back down after hitting highs last summer.
Sam Kemmis
Sally French
By Sally French and  Sam Kemmis 
Edited by Kevin Berry

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It’s been a harsh winter for travel. The Great Southwest Meltdown of the 2022 holiday season left thousands of  travelers with canceled flights. Then there was January’s glitch in the Federal Aviation Administration’s computer system that temporarily grounded all flights in the U.S. And don’t forget the Amtrak trip from hell, when a 17-hour Amtrak trip from Virginia to Florida  became a 37-hour ordeal because a separate derailment forced a passenger train to take a 20-hour detour.  

Travelers can’t seem to catch a break. That is, except when it comes to travel prices.

The latest set of inflation data, which was released by the Bureau of Labor Statistics in January 2023 based on December 2022 data, showed a 0.1% dip in prices from November. That’s a welcome reprieve after November’s report showed a 0.1% monthly gain, which — despite being a slower price increase than expected — was still proof of rising prices. This month’s data also marks the smallest 12-month increase since October 2021.

And much of that decline in overall prices can be attributed to decreasing travel costs. Gasoline was by far the largest contributor to the overall decrease, according to the U.S. Bureau of Labor Statistics, witnessing a 12.5% drop in December 2022 versus November (or 9.4% when seasonally-adjusted). Airline fares also saw a significant month-over-month decrease, down 8%.

But despite the good news of mostly dropping prices this month, travel costs are largely far higher than what they were in the past — as is the case for most prices. Overall prices tracked by the BLS are 6.5% higher than what they were this time last year. Perhaps most painfully for travelers, flights are a brutal 29% higher than what they were this time last year.

But the recent price drops signal that perhaps the cost of things like hotel rooms and airfares might have reached a peak.

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 January 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 December 2022 information, even though it is released in January 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. 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, January 2023 is compared to January 2020 as the last pre-pandemic month of January.

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

Airfare

Airfare prices took a nosedive during spring 2020 and generally stayed low just about every month until the end of 2021, when prices rapidly increased. In May 2022, airfares hit a record high. But airfares are finally dropping, with December prices down 8.25% from November prices. December prices are down an even-more significant 22% from its May highs.

How airfare prices have changed

December 2022 vs. November 2022 (MoM).

Down 8.3%.

December 2022 vs. December 2021 (YoY).

Up 28.5%.

December 2022 vs. December 2019 (Change since pre-pandemic).

Up 6.4%.

Luckily, prices this month are lower than what they were in May, but they’re still significantly higher than what they were this time last year. December 2022 prices are 28.5% more than what they were last year. They’re also 8% more than what they were the same month in 2019, suggesting that travelers are back in full force — perhaps to make up for lost travel during the pandemic.

Hotels and motels

The price for lodging away from home, including hotels and motels, saw one of the biggest swings of any price category throughout the duration of the pandemic.

In December 2020, average hotel prices dropped to their lowest levels since December 2013. Yet it didn’t take long for prices to hit new highs, setting records throughout the pandemic — particularly in the summer of 2021. Hotel prices hit their all-time record highs in May 2022.

Luckily for travelers, hotel prices have come down every month since then. This month, they’re down about a half a percent versus last.

How lodging prices have changed

December 2022 vs. November 2022 (MoM).

Down 0.5%.

December 2022 vs. December 2021 (YoY).

Up 3.2%.

December 2022 vs. December 2019 (Change since pre-pandemic).

Up 17%.

Yet even though the price decrease over the month is a small reprieve, travel is still expensive. You’ll pay about 3% more for lodging this year versus the same time last year, and 13% more than what prices were in 2019, 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, down 5% from this time last year. Still, they’re up an astounding 36% versus the same month in 2019.

How car rental prices have changed

December 2022 vs. November 2022 (MoM).

Down 3.4%.

December 2022 vs. December 2021 (YoY).

Down 5%.

December 2022 vs. December 2019 (Change since pre-pandemic).

Up 36%.

Luckily though, prices aren’t quite as high as they were this time last year,  but they’re still far beyond what they were before COVID-19.

Food away from home

Food prices consistently rise every year, including in the COVID-19 era. In December 2022, the cost of food away from home was up over 8.3% versus November 2021. And prices are far higher than pre-pandemic, with December 2022 prices coming in at more than 19.2% higher than what they were in December 2019.

How restaurant prices have changed

December 2022 vs. November 2022 (MoM).

Up 0.4%.

December 2022 vs. December 2021 (YoY).

Up 8.3%.

December 2022 vs. December 2019 (Change since pre-pandemic).

Up 19.3%.

Movies, theaters and concerts

Like restaurants, entertainment prices see fairly consistent increases — save for a small dip in 2020. Luckily for consumers, year-over-year price increases here haven’t been as drastic as those for dining out — up just 6.5%. But, it still suggests that people are heading outside of their homes to spend money on experiences over things.

How the prices of movies, theaters and concerts have changed

December 2022 vs. November 2022 (MoM).

Down 0.3%.

December 2022 vs. December 2021 (YoY).

Up 6.5%.

December 2022 vs. December 2019 (Change since pre-pandemic).

Up 13%.

If you’re planning to travel in 2023…

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.


How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:

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