The Cost of Travel: 2022 vs 2021
There’s no question that the cost of goods and services has increased in the last couple of years. Due to manufacturers being able to meet demand, wholesalers and retailers have to recoup their losses by charging more for their products than they used to.
The Cost of Travel: 2022 vs 2021
Known as inflation, we’ve all dealt with our fair share of it since 2020. Consumers went from being able to get their hands on some products (remember the toilet paper and soap scarcity of March 2020?) to being faced with higher price tags when items did become available.
2022 Travel Outlook
The travel industry has seen a lot of change in the last two years. But what is the 2022 outlook compared to 2021?
Why is Travel So Expensive?
No matter how you want to travel, you should plan on increasing your budget well into 2022. The Washington Post reported that travel costs went up over 6% in October 2021 (compared to October 2019). This is due to a variety of factors:
- Increased cost of fuel
- Labor shortages
- Increased cost of goods (food, lodging, and rental cars while traveling)
The elevated cost of travel in 2021 is partly due to the fact that people began to emerge from their pandemic bubbles and travel the world again. As businesses related to the travel industry attempt to get back in the black, they may increase their prices just so they can stay open and cover overhead costs of operation.
Here’s a look at some of the price increases for a number of consumer goods in 2021, according to CNBC.com:
- Appliances – 7.1%
- Furniture – 11.2%
- Electricity – 5.2%
- Gas – 42.1%
- Hotels – 18%
- Meat, poultry, fish, and eggs – 10.5%
- Rental cars – 42.9%
- Restaurant dining – 4.%
- Televisions – 12.7%
How many items on that list are directly related to the travel industry? More than half. If a hotel wants to refurbish rooms, it costs them more. If restaurants want to stay open, it costs them more. Rental car companies have to pay more for gas. All these increases affect what businesses have to charge in order to turn a profit. And that’s just the tip of the iceberg.
Fewer People to do the Work
As tourists flood resorts again, they may be faced with fewer staff members to accommodate them. This can result in fewer rooms available because the current staff can’t keep up with turnover rates otherwise. When there are fewer rooms but increased demand, travelers literally pay the price.
Also, with fewer people working to transport goods to popular travel destinations, what does arrive is going to cost more. There’s no indication that the labor shortage will be remedied in 2022, so you can expect it to have a continued impact on travel prices.
Travel Will be Less Complicated in 2022
Even as some travel restrictions may ease with the dawn of 2022, no one expects the costs to do the same. As mentioned, travel-related industries are still recovering from the massive halt to travel that began in 2020.
Thanks in part to vaccines, rapid-testing for COVID, and people’s newfound tolerance to living in a pandemic, the number of people traveling in 2021 has continued to rise. Even with significant spikes in the cost of travel around the holidays, people are willing to pay the price to see loved ones after all the time spent apart. You can expect to see more countries ease the restrictions on travel in 2022, and Expedia is reporting that about 37% of U.S.-based travelers are planning international trips next year.
Projected Cost Increases in the Travel Industry
Current data analysis has resulted in the following projections when it comes to the cost of travel in 2022:
- Airfare – 3.3% increase in 2022, followed by an additional 3.4% increase in 2023
- Hotels – 13% increase in 2022, followed by an additional 10% increase in 2023
- Rental Cars – 3.9% increase in 2022, followed by an additional 3% increase in 2023
What Can You Do?
How can you manage to travel while still sticking to a budget you’re comfortable with?
Using a flight tracker, such as Google Flights, can help you stay vigilant about securing the least expensive airfare for your next trip. You can customize your search to include preferred airlines, multiple travel dates, and how many layovers you’re willing to sit through. A flight tracker does the work for you and will send you alerts about price drops so you never miss a deal.
Split the Cost
You can also offset 2022 travel costs by sharing lodging expenses with friends and family. Split the cost of an Airbnb or hotel suite, or stay with people you know when you travel.
Usually, comparison is labeled the thief of joy, but when it comes to making travel plans, comparison can result in lots of joy thanks to saving money! Experts predict flight prices will increase 3.3% in 2022, while ground transportation may see a 3.9% increase in cost. That may mean it’s cheaper to fly than drive, but you’ll never know unless you compare the data. If you’ve always been afraid of flying, perhaps FLT’s article debunking common myths about commercial flying will help. Read it HERE.
If you’ve previously thought all-inclusive resorts weren’t worth the expense, but if they can take the guesswork out of your travel budget, it’s probably worth giving them another look. Compare all-inclusive vacations to booking experiences, paying for food, and paying for lodging separately, and you might find it’s less expensive.
Redeem Those Points
Have you been holding on to frequent flyer miles, or using a credit card with travel points in the last couple of years? Chances are those rewards are stacking up, and that you need to use them before they’re gone. 2022 may be your year! Redeem your points, or start earning them now so you can use them to reduce the out-of-pocket travel expenses associated with your next trip.