How to go on vacation on a tight budget

Inflation and airline schedule disruptions are making headlines. But travel statistics show that it doesn’t affect travel plans as badly as you might think.

By Labor Day, U.S. airline travelers were back in the skies at more than 98% of pre-pandemic levels, according to the Transportation Security Administration. Drivers hit the road for July 4 in record numbers, according to AAA, despite high gas prices. The global vacation rental market saw a 60% increase in vacation rental searches for the summer season and a 9% increase in average length of stay.

Savvy travelers are finding ways to cut travel expenses to manage budgets. Three in five travelers (61%) will reduce the amount of money they spend on dining out before cutting back on vacations and travel. According to Skift, they will do the same during the trip: eat less in restaurants and choose cheaper alternatives for their transport and accommodation.

According to the Global Rescue Travel Safety and Sentiment Survey, most travelers (79%) say inflation won’t change their plans, but 21% say it will. Their travel adjustments include traveling fewer days (21%), flying on cheaper plane tickets (19%), staying in cheaper hotels (15%), eating less or in cheaper restaurants (12% ) and drastically reducing or not buying souvenirs or gifts while traveling (6%).

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How you travel by plane also matters.

“Small airlines and shorter routes are usually cut by airlines because their pilots have to be used for long-haul flights. It is wise for travelers to choose more stable routes,” said Kimberly Franke, Montana-based Kanna Travel Services.

The city you are departing from will also make a difference. For example, you are in New York and want to go to Miami for a week’s vacation. You can fly from a larger airport — like JFK — nonstop to Miami for $288 round-trip per person. Pick a smaller airport, like White Plains/Westchester on the New York City subway, and a nonstop return flight costs $2,038 per person.

“Big cities can offer better routes and fares. Small towns or villages currently suffer from canceled routes and more expensive tickets,” Franke said.

Airline ticket prices go up instead of down as you get closer to your departure date. “Airlines sell the lower fare class options first and from there the fare class only gets more expensive. It’s not a trend that’s likely to change anytime soon given staffing shortages and gas prices,” Franke said.

In general, you should book six weeks in advance for domestic flights and four months in advance for international flights. Flights are usually cheaper on a Tuesday or Wednesday.

Booking in advance is also a good idea for hotels. “Some hotels, like Four Seasons and Marriott, use dynamic pricing – the higher the expected occupancy, the higher the price for available rooms,” said Mimi Lichtenstein, owner of Truvay Travel. Not all hotels offer discounts, but it’s worth inquiring about upgrades or negotiating prices for a longer stay.

Business travel is back, according to the US Travel Association. Companies are planning in-person meetings as the top travel expense for 2022. Business travelers are taking advantage of this opportunity by taking leisure days on work-related travel, a growing trend called “leisure travel.”

Virtual meetings simply cannot replace face-to-face meetings. Personal interaction will always be more effective in building and maintaining relationships, fostering trust and driving business growth.

“The company will generally pay for the flights if the extra days do not increase the total cost of the flights. But don’t consider this a paid vacation. If the leisure portion of the trip falls on a weekday, the employee is expected to use their vacation days or work remotely, as well as pay for any additional leisure expenses incurred. That’s why many traveling employees plan their trips to take advantage of long vacation weekends,” said Stephanie Diamond, vice president of Global Rescue Human Capital Management.

Currency exchange can help offset rising travel costs. Argentina, now open to all travel, is a bargain for US travelers as US$1 translates to $142 Argentine Pesos, a 45% increase in value over last year. The Canadian dollar has been 13% more valuable than the euro for the past year, which could lead to an increase in travel to the euro zone from Canada.

Be sure to exchange your money before you return home. Many currencies cannot be exchanged after you leave the country or it may be difficult to find a facility that will exchange a specific currency. For example, the West African franc is extremely difficult to exchange for US dollars in the states.

Marietta Formanek, CPA, is vice president of accounting and financial operations at Global Rescue. She has held senior finance roles at Orvis Co., AI Squared and is a KPMG alumnus.

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