Travel Prices are Soaring: Here Are 5 Hacks to Keep Your Next Vacation on Budget

The weather is heating up, and so is travel demand, with searches for flights up 40% compared to a year ago. With easing pandemic restrictions opening up both domestic and international travel destinations again, Americans are ready to party like it's 1999 2019.

Unfortunately, travel costs have not been immune to rampant inflation, and unaware travelers are in for some sticker shock compared to the last few years. According to the latest Consumer Price Index report from the Bureau of Labor Statistics, airline ticket prices are up an astounding 26% compared to the same month a year ago. Hotels and rental cars are also pricier than last year, up 9% and 2%, respectively.

If there's a silver lining to the cloud cast over everyone's otherwise-sunny vacation plans, it's that prices do appear to be stabilizing, albeit at higher levels than even before the pandemic. Compared to January 2020, overall rates are higher, with airfare coming in at 4% more expensive, lodging at 16%, and car rentals up a whopping 36%.

But don't panic. For those looking to trade the office for a tropical beach, there are plenty of ways to make your travel dollars stretch further than you ever thought possible with a few simple hacks.

Avoid Peak Travel Dates

If possible, plan your travel away from the busiest periods when everyone else is out and about. According to Expedia, traveling in early March before spring break or in the “shoulder season” between late April and mid-May before summer vacations ramp up will allow you to save hundreds on airfare and accommodations.

Marjolein Dilven, a world traveler and writer at Spark Nomad, uses this strategy whenever possible to save money and avoid crowds. “Traveling in the shoulder season will ensure that the prices are significantly lower for both airfare and hotels. The crowds are fewer compared to high season, making your city trip or beach hangout much more enjoyable.”

Know When to Lock In Your Reservation

While many vacationers plan their trips months in advance, real-world data shows that the best time to book your reservation is about 30 days before traveling. According to Expedia, booking hotels about a month out can save around $30 per night versus committing several months in advance.

This same pattern holds for flights as well. Generally, booking airfare a month ahead of domestic travel yields the lowest price. However, with so much uncertainty surrounding travel demand over the last few years, it is wise to set up price alerts as soon as you have a destination in mind to track when prices drop. These tools also use machine learning to predict the best time to book based on factors such as travel dates, routes, and overall demand.

Maximize Your Travel Reward Points

If you're a frequent traveler, hotel and airline loyalty programs offer the ability to travel for free or almost free once you've accumulated the points. Travel rewards credit cards also provide the ability to collect points toward travel spending, some with lucrative welcome bonuses that allow you to earn $1,000 in a month or two if you meet certain spending thresholds.

Even if you're booking during the peak season, travel rewards points can hold their value since you often pay a flat number of points regardless of when you are traveling. “Sometimes you don't have the luxury of traveling during the off-season,” says Ram Chakradhar at Dollar for Cent. “On our recent trip to Walt Disney World Resort in Orlando, I needed to book a Hilton hotel for the family and found out that the weekend prices were almost 50% more expensive than the weekdays. However, the cost was virtually the same when paying with my Hilton credit card points.”

There are also higher-tier rewards programs that don't require you to spend points to get the benefit, such as the Southwest Airlines Companion Pass, essentially offering you free money in the form of airline tickets every time you fly. “Using the Southwest Companion Pass is our best money-saving move when it comes to travel,” says Karee Blunt at Our Woven Journey. “It takes some preplanning to earn it, but once you do, you can fly anyone with you for only the price of the airport fee, which domestically is about $5.60 one way. For the price of a latte, we can cover the cost of a plane ticket for one of our kids. We've saved thousands of dollars over the years this way.”

Consider Hotel Alternatives

Vacation rental sites like Airbnb and Vrbo have become extremely popular over the last few years, and for a good reason. If you are traveling with your family or a group of people, renting out an entire house or apartment can make more sense financially compared to booking multiple hotel rooms.

Another lesser-known alternative is timeshare rentals. Don't worry; you don't have to listen to a sales pitch or shell out thousands of dollars. You can rent someone else's timeshare through sites like Redweek to save significant money on vacation accommodations or secure a coveted room at a sold-out resort.

“If you haven't planned a spring break trip yet, don't worry. There are still deals out there,” said Monica Fish. “For example, a one-bedroom condo unit at the highly-rated Divi Phoenix Beach Resort on world-famous Palm Beach would be $715 a night during Easter week if booked hotel direct. People can book that same room on Redweek for the same dates from a timeshare owner not using theirs for $299 a night – less than half the price.”

Stay Local and Enjoy the Great Outdoors

With the increasing cost of flights and expensive hotels, summer vacation can quickly break the bank. One way to beat rising travel prices is to stay closer to home. Not only can you avoid the cost of air travel, but a driving trip also allows you to get creative in your planning and explore places you may not have considered before.

John Dealbreuin from Financial Freedom Countdown recommends taking advantage of local parks and attractions to save money. “I have planned my spring travel by mapping out an itinerary and choosing to drive to Tahoe and Death Valley. I have booked camping sites close to Yosemite and Big Sur for the summer. Our tax dollars fund the national parks, so we should take advantage of the amazing locations in our state.”

For outdoor enthusiasts, camping can be a great way to save money on road trips rather than staying in hotels. “To beat the rising travel costs, we bought an Aliner camper. Now we have a tiny house on wheels and can road trip around America without spending much money,” says Ashlee Fechino. She acknowledges that purchasing a pop-up camper was an investment up front, but it has saved them thousands over the course of their travels. “Last summer, a typical 4-day camping trip 3 to 4 hours from home cost us around $300. That included gas, food, campsite fees, and free outdoor activities like hiking and kayaking. This is our preferred way of travel now.”

Don't Let Rising Prices Derail Your Travel Plans

More Americans than ever are shaking off the post-pandemic blues, with 94% planning a trip in 2023, even amidst rising travel inflation. While sticking to a budget is more challenging than ever, making a few minor tweaks to your vacation plans can yield significant savings while allowing you the freedom to travel the world.

This article was produced and syndicated by Wealth of Geeks.

Andrew Herrig is the founder of Wealthy Nickel, where he writes about personal finance, side hustles, and entrepreneurship. As an avid real estate investor and owner of multiple businesses, he has a passion for helping others pursue financial independence and shares his own family’s journey on his blog. Andrew’s expert advice has been featured on CNBC, Entrepreneur, Fox News, MSN, and more.