The cost of travel is sky-high.
In June, inflation in the U.S. hit a 41-year high of 9.1%. The costs of fuel, food, and housing are rising in the country—the demand is soaring while the supply is still recovering from the pandemic beatdown. Consequently, everything is getting more expensive, including travel.
Whether you’re booking a domestic trip or an international getaway, chances are that you are paying more for everything: gas, flights, stay, dining, and experiences. Airline ticket prices shot up by 34% in June over the previous year, according to the consumer price index, and although they fell 1.8% over May, some are anticipating that prices will rise higher.
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Director general of International Air Transport Association (IATA) Willie Walsh has warned that airfares will go up “without a doubt.” Oil prices have increased around the world due to the surge in demand after COVID-19 and Russia’s war on Ukraine. This will be reflected in ticket prices that travelers pay, he said. Oil is the single biggest element of an airline’s cost base, so it’s inevitable that ultimately the high oil prices will be passed through to consumers in higher ticket prices, he predicted.
If you look at the chart from IATA, jet fuel prices have gone down recently, but compared to the value from a year ago, it still costs 81.9% more. This hike in fuel has been hurting airlines who are trying to recover from the losses of the last two years and dealing with a massive shortage of resources (of their own making). In addition, a huge surge in demand has resulted in a fight for limited air tickets. The result? Airlines are making up for it by charging more.
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According to a survey by Bankrate, 57% of Americans said that they have encountered higher travel costs in 2022. Ted Rossman, senior industry analyst at Bankrate, said, “While many Americans are excited to travel again after being cooped up for the past couple of years due to the pandemic, they’re encountering substantially higher costs and lengthy waits. The situation may get worse before it gets better as pent-up demand is unleashed this summer.”
But it’s not just airfare that’s stinging customers. Due to surcharges, Uber costs more now, and so does sending packages or having food or groceries delivered.
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So what should you do? If you’re planning on booking a trip, it may make sense to hit the purchase button now rather than wait. Make sure to track the prices of your itinerary using a tool like Google Flights or the Hopper app. Both of these tools can help you find the lowest possible fares, as well as alert you to the most optimal time to book.