Travel Inflation Report: March 2023

Pretty much every aspect of travel is more expensive now than what it was this same time last year — airfares especially so. According to NerdWallet's Travel Price Index, the overall cost of travel is up 11% over the past year — outpacing the overall 6% rate of inflation (including non-travel prices) across the United States.

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 and lodging. And it found that February 2023 prices are up 11% versus the same month in 2022, and up 4% since last month. February travel prices are also up 17% versus February 2019.

More specifically, hotel room rates are up 7.4% year-over-year. Restaurant prices are up 8.4%. Airfares are up 26.5%.

Overall prices (for everything, not just travel) rose 6% before seasonal adjustment. That’s all far higher than the 2 percent annual inflation rate that policymakers typically view as acceptable. That’s according to the latest set of inflation data, which was released by the Bureau of Labor Statistics in March 2023, based on February 2023 data. As for month-over-month increase, the report showed a 0.4% increase in prices from January 2023. 

But there is a silver lining. That 6% annual increase in overall prices was actually the smallest 12-month increase since September 2021, according to the U.S. Bureau of Labor Statistics.

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

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 January 2023 prices down 1.5% from December 2022 prices. December prices are down an even-more significant 22% from its May highs.

Luckily, airfares are still down an impressive 18% from their record highs in May, but they’re still significantly higher than what they were this time last year. February 2023 prices are 26.5% more than what they were last year. They’re also 6% more than what they were the the prior month — a worrisome trend for travelers seeking out price deals this year, especially considering overall month-over-month price increases were just 0.5%.

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.

Hotel prices dropped every month of 2022 since then, but all trends must come to an end, and for hotel prices, that’s happening now. February 2023 hotel prices are up 5% versus the prior month — a price increase far higher than most other categories. What’s more, hotel room rates are, on average, nearly 15% 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 and continue to drop, down 1.3% month-over-month. Still, they’re up an astounding 37% versus the same month in 2019.

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 during the COVID-19 era) and they typically set fresh records every month. That happened again this month. In February 2023, the cost of food away from home was up 0.6% over the prior month, and it was up over 8.4% versus the same month in 2022. And prices are far higher than pre-pandemic, with February2023 prices coming in at more than 20% higher than what they were in 2020.

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.

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.

Methodology

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%.