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Travel costs fell in July. Here’s how you can score a good deal

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Travelers saw prices fall for big-ticket pieces of their vacation budgets in July, offering at least a temporary reprieve after soaring costs earlier this year.

Airfares fell nearly 8% from June to July, while prices for rental cars and lodging such as hotels declined 9.5% and about 3%, respectively, according to a monthly inflation report issued Wednesday by the U.S. Department of Labor. It was the second consecutive month of price declines for each category.

“That’s really good news, I think, when people are planning out their vacations,” said Sally French, a travel expert at NerdWallet.

Airline ticket prices peaked in May this year, driven by factors like elevated consumer demand coming out of the Covid-19 pandemic and operational issues for airlines such as high jet-fuel costs and staffing shortages, which led companies to pare back flight schedules, according to experts.

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That surge in airfare earlier in 2022 was “anomalous,” said Hayley Berg, lead economist at Hopper.

Hotel and rental car prices also topped out in the spring, while high gasoline costs also served to stretch road-trip budgets.

‘A lot’ of people traveled recently, despite high costs

Thirty-nine percent of travelers said the general cost of trips being too expensive deterred them from traveling more than they would have otherwise preferred in the past half-year, according to Destination Analysts, a tourism market research firm. Almost half, 47%, explicitly cited gasoline costs and 27% did so for airfare.

Financial concerns compounded other travel headaches over the last several months, such as an increase in lost baggage and delayed or canceled flights.

However, “a lot” of people still traveled over the summer — more than half of Americans took a trip in the past month, according to a Destination Analysts survey fielded in July.

Despite the recent cooling, travel largely remains pricier than it was pre-pandemic. Airfare this July was up 16% versus July 2019, according to monthly Consumer Price Index data.

Hotels are up more modest 6% for the same period while rental cars are up about 48%, which is “easily the sharpest price increase of any [travel] category we track,” French said. In addition to consumer demand, factors like a semiconductor shortage that impacted the auto industry more broadly have flowed through to consumers, she added.

“It’s still important to remember [that] if you haven’t traveled or done a big trip since pre-Covid, you should expect to pay more than what you’re used to,” French said.

How to score good deals on upcoming trips

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2022-08-11 08:34:59

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