Author: Sam Kemmis

Travel Prices Are Coming Back to Earth

Posted on by Sam Kemmis

Skyrocketing airfares earlier this year and recent headlines about persistent inflation may be discouraging potential travelers. Yet recent data suggest that prices for hotels, air travel and rental cars are softening this autumn. And the U.S. dollar’s continued strength has driven down international travel costs.

The Consumer Price Index report released in September showed overall prices continuing to climb, which sent stocks tumbling. But underneath these wider trends sat a nugget of good news for consumers: Travel prices moderated.

Some of this trend is seasonal — prices usually drop in the fall and winter. And most travel costs, especially rental cars, remain higher than they were before the pandemic. Still, the downward pressure bodes well for travelers looking to book a trip in the coming months.

Timing is everything

According to Google, searches for “cheapest airline tickets” skyrocketed by 240% between April and August, reflecting the pinch travel consumers felt as prices rose. And while finding cheaper flights isn’t as simple as booking on the right day of the week, some historical clues can help decide when to buy upcoming travel.

Two major factors can affect the cost of any given flight itinerary: The larger price trends at play and the timing of when the travel is booked. Many travelers assume that booking earlier is usually better, but the data doesn’t bear this out.

Google Flights compared five years of historical data and found that domestic airfare prices tend to be lowest anywhere between 21 and 60 days before departure. The timing is even shorter for winter holiday flights, where booking just 22 days before departure yields the lowest average fares.

With these factors combined, it could make sense to hold off on booking holiday travel. Overall prices could continue their downward trajectory as inflation eases, and historical trends suggest that prices tend to drop until only a few weeks before departure.

Of course, like everything macroeconomic this year, actual results may vary.

Leverage the dollar

Another bright spot for international travelers: The dollar has strengthened against many foreign currencies throughout the year. This may not affect flight prices much, but it will reduce the cost of everything from hotel rooms to car share rides for those heading abroad.

Not every foreign country — and currency — is trading equally favorably. The Mexican peso is almost unchanged relative to the dollar compared with the previous year, while the Japanese yen is considerably weaker. One U.S. dollar bought 23% more Japanese yen in August of 2022 than in the previous year.

If currency exchange rates remain stable (a big if), a traveler to Japan would receive an effective 23% discount on all purchases made in Japan, while a traveler to Mexico would receive none. This provides a strong incentive for U.S. vacationers to choose exchange-rate-friendly destinations.

Just the beginning

Travel is still not cheap, but prices are slowly descending from their eye-watering heights.

The latest CPI data indicate that rental cars are 46% more expensive than they were before the pandemic, compared with a shocking 70% markup over pre-pandemic rates in April.

Many factors suggest that this trend will continue. Jet fuel prices, while still high, tend to follow oil prices, which seem to be dropping. And the pent-up demand from “revenge travel” could abate as temperatures cool.

Still, airline and hotel staffing shortages continue to wreak havoc on the supply side of the equation, and oil prices, which directly affect airfare, could always change.

At the very least, budget-conscious travelers can enjoy a bit of breathing room for now.

Sam Kemmis writes for NerdWallet.

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How to Travel Safely and Cheaply This Summer

Posted on by Sam Kemmis

As vaccination rates inch upward, Americans are beginning to travel again. More than 10 times as many passengers passed through Transportation Security Administration screenings in the first week of April compared with the same period last year, a sign that some degree of normalcy is returning.

And travel this summer could get far busier.

“Right now, we’re still awash in cheap summer flights,” says Scott Keyes, founder of travel deals newsletter Scott’s Cheap Flights. “But with vaccinations accelerating quickly and interest in travel spiking, cheap summer flights may not be available much longer.”

Yet the question of whether it’s safe to travel remains. Infection rates remain high, despite accelerating vaccination efforts. Even vaccinated individuals are realizing that they may not be in the clear to return to life — and travel — as normal.

How to travel safely

Getting fully vaccinated is the first step toward travel safety, but it’s not the last. The Centers for Disease Control and Prevention have issued updated guidelines for vaccinated travelers, giving the go-ahead to domestic travel. Yet it still recommends following the familiar protective protocols: wearing a mask, maintaining social distance and avoiding crowds.

“Even with a vaccine, the fundamentals of COVID-19 still apply,” Dr. Jessica Shepherd, chief medical officer of Verywell, an online health website, said in an email. “With travel, only the scenery changes, not the reality. As we move towards more of a normal life, it is important to approach it carefully rather than abruptly in lifestyle changes.”

If the CDC recommends maintaining social distance, is it safe to fly at all?

“This risk of transmission in airplanes is relatively low as the airflow in current jet airliners is much faster than normal indoor buildings and half of it is fresh air from outside,” she said.

How to travel cheaply

Although many factors will affect the cost of your potential vacation, one looms especially large: timing.

“I’d start booking as soon as possible,” says Matthew Kepnes, founder of Nomadic Matt, a budget travel website. “There’s a lot of deals out there right now, but they won’t last long … so my advice is to book soon.”

This strategy also takes advantage of a seismic shift in airline policies.

“Many travelers may have missed the fact that all full-service U.S. airlines have permanently gotten rid of change fees if you book a ticket in main economy, premium economy or business/first class,” Keyes says.

Aside from basic economy, most fares are now far more flexible than before the pandemic. This creates an incentive to book sooner, then rebook if plans fall through.

Experts also recommend looking for deals, rather than trying to travel to popular (and expensive) destinations. Average airfares might rise, but deals will remain if you hunt for them.

Then, there are always travel rewards, which have been piling up in many accounts throughout the pandemic and can offset the costs of travel — but only if you use them.

Where to travel

Before you book a flight overseas, know that most countries are still enforcing restrictions on U.S. travelers and that the CDC and State Department have issued blanket “do not travel” advisories for most countries worldwide, even for vaccinated travelers. That doesn’t mean international travel is off the table, but it does limit the options.

“There are countries like Mexico and Costa Rica where Americans can visit today without any COVID prerequisites like testing or quarantine,” Keyes says. “(And) there are a growing number of countries like Iceland and Belize that allow fully vaccinated Americans to bypass any testing or quarantine requirements that are mandatory for unvaccinated visitors.”

And many countries remain fully off-limits to U.S. travelers for the foreseeable future. Even countries that are allowing tourists, visitors are still subject to local restrictions and curfews. Do your research beforehand to make sure you can enjoy your destination once you get there.

The U.S. will still require a negative COVID-19 test three days or less before your return flight. So even if you are vaccinated, you will need to spend time at the end of your trip obtaining a negative test.

Some of these restrictions are bound to change this summer, but it’s impossible to know which ones, or when. So many travelers, including the experts, are again opting to travel domestically this year.

“I’m about to embark on a seven-week road trip around the U.S.” Kepnes says. “I’ll be focusing on national parks and outdoor adventures.”

Sound familiar?

This article was written by NerdWallet and was originally published by The Associated Press. 

Sam Kemmis writes for NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.

The article How to Travel Safely and Cheaply This Summer originally appeared on NerdWallet.

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(How) Should I Travel for the Holidays?

Posted on by Sam Kemmis

Remember when we used to make plans? It was so long ago now you may not remember, but we actually used to start booking our holiday travel in the summer before prices rose to unaffordable levels. That’s right: We could predict what the world would be like months in advance back then.

Times have certainly changed; now, some travelers are starting to wonder whether and how to plan for the holidays. Does it make sense to buy plane tickets? What about using points and miles? And what are the chances of a second (or is it third?) wave of the pandemic?

I’ve spent the last few months wading through COVID-19 travel policies, spreadsheets full of airfare and hotel data and other boring industry effluvia so you don’t have to. And I’ve got a few nuggets of advice for anyone thinking about booking holiday travel.

For starters: Why rush?

Should I book now?

Years of conditioning have taught us all the perils of waiting until the last minute. But if you haven’t noticed, this year is not like the others, and travel demand is unlikely to reach normal no matter what happens in the next few months.

In other words: You shouldn’t feel any rush to book travel until you’re ready.

In fact, you might end up paying more if you book in advance rather than closer to your travel dates. Recently, I analyzed a bunch of hotel price data and found that the cost of booking the same room dropped dramatically when booking 15 days in advance, compared to booking four months in advance.

That is, the same rooms cost an average of $157 when booked within 15 days compared to $212 when booked four months in advance. And while this trend might not hold into the winter or through the holidays, it’s certainly a good indication that you’re unlikely to save money by booking hotel rooms now.

The trend isn’t quite as dramatic for airfare, though it’s possibly more remarkable, since booking within 15 days has historically been a recipe for getting fleeced.

Which airline should I fly?

This one’s easier: Delta.

We performed a big analysis of airline policies in response to COVID-19 and found that Delta had the best overall rating, with Southwest and Alaska hot on its heels.

I won’t bore you with all the details here, but some of the factors we took into consideration include:

  • Mask policy enforcement.
  • Blocking seats and limiting capacity.
  • Offering flexible change and cancellation policies.

This last bit is especially important when booking holiday travel this year: Make sure the tickets you purchase can be changed or canceled without incurring a fee. This has gotten significantly easier with various COVID-19 waivers and four major airlines, including Delta, all announcing the elimination of most change fees. Be aware of restrictions that remain around basic economy fares.

What about points and miles?

Hotel points and airline miles can usually offer good workarounds for sky-high holiday prices. Notice that pesky “usually.” Since cash prices are so low, using points and miles is unlikely to offer better than average value this year.

That doesn’t mean you shouldn’t use miles, just that you won’t get especially good bang for your buck from them right now.

Will it be safe?

That’s the trillion-dollar question, isn’t it? I’m no epidemiologist, so I’m reluctant to wade into these waters, but there is something important to keep in mind: Where are you planning to travel in December?

The Institute for Health Metrics and Evaluation at the University of Washington offers public projections for the pandemic broken down by country and state. These reveal some pretty startlingly different scenarios for different parts of the country.

For example, the daily per capita infection rate in California is projected to rise from 42.6 per 100,000 today to 155 per 100,000 by December. New York state in December is projected at 30 per 100,000, up from the current 4.4. Utah’s rate is expected to skyrocket to 179 per 100,000 from today’s 13.5.

Of course, these are only projections, and nobody knows what will actually happen by December, but it’s good to keep in mind when planning travel. You don’t want to go from a relatively safe spot into a hot zone (or a hot zone into a safe spot, for that matter).

In fact, for everyone’s sake, my personal take is that we should all err on the side of staying home.

Sam Kemmis is a writer at NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.

The article (How) Should I Travel for the Holidays? originally appeared on NerdWallet.

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Booking Last-Minute Spring Break Travel? Here’s How to Get the Most From Your Miles.

Posted on by Sam Kemmis

A recent NerdWallet survey found that fully one-third of Americans plan to travel during spring break, which lasts from late February to early April, roughly. This means three things:

  1. Travel to popular destinations will be expensive.
  2. People will want to use their miles and points to offset these costs.
  3. SPRING BREEEEAAKKKK!!!

Ahem.

In the past, using frequent flyer miles to book last-minute travel was often a good choice, because the cost in miles stayed the same while the cash price skyrocketed. However, many airlines have switched to “dynamic” award prices, which means the cost in miles tracks the cash price more closely.

Which begs the question: Is using miles to book last-minute spring break travel a good idea?

I break it all down below, but the short answer is: Probably yes for international travel, probably no for domestic travel.

Numbers were crunched

To answer the question of whether using miles for spring break travel is a dumb idea or not, I needed two things:

  1. The average cash price of tickets
  2. The average value of award (mile) tickets.

The first one was easy. I picked three U.S. departure cities whose chilly residents are likely ready to skip town (Chicago, New York, Seattle) and four popular spring break destinations (Fort Lauderdale, Florida, New Orleans, and Los Cabos and Cancun, Mexico). Then I searched for the lowest available fare for a seven-day trip one week away.

What happened next will shock you. At least, it shocked me:

  • Average domestic round-trip airfare: $181
  • Average Mexico round-trip airfare: $527

This is a pretty small sample that only includes four destinations total, but I was amazed at the relatively high cost of the Mexico fares compared to the low cost of the domestic fares.

So my first bit of advice to anyone looking for some inexpensive vernal warmth: Skip Mexico if you can. Sorry, Mexico. Siempre te amaré. (I’ll always love you.)

Now, how about booking with miles?

This took a lot more work (and made me regret pitching this idea to my editor). I compared award bookings for three of the biggest U.S. airlines — American, Delta and United — on the same routes and the same dates as the cash bookings.

Here are the results, which you probably won’t care about unless you’re a points nerd:

Domestic

  • American: 25K miles + $11
  • Delta: 28K miles + $11
  • United: 31K miles + $11

Mexico

  • American: 29K miles + $97
  • Delta: 38K miles + $97
  • United: 40K miles + $94

You can tell with a glance that flights to Mexico cost slightly more miles and significantly more in fees, which is interesting. But we want to know whether using miles is worth it compared to the cash prices above.To do that, I calculated the effective value of these award tickets based on NerdWallet’s normal mile valuations (including taxes and fees) and compared it to the cash price.

Sound like gobbledygook? The payoff is:

  • Using miles to book flights to Mexico was generally an above-average redemption (saving the equivalent of $89 in value).
  • Using miles to book domestic flights was generally a below-average redemption (costing the equivalent of $97 in value).

This varied somewhat from route to route and airline to airline, as you’d expect, but overall the results were fairly consistent. Because the cash prices were so high for Mexico and so low for domestic destinations, the effective cost of using miles didn’t match up.

That said …

Check for yourself

Don’t go yelling “SPRING BREAKKK!!” and besmirching the international reputation of Americans just yet. The results I found are only averages — each flight booking will have its own relative value.

Collecting and comparing all this data was a pain in the butt for me, but your own research won’t be nearly as involved. Just look up the cash price of your last-minute flight and the award price for whichever airline program you have enough miles with. Then use a calculator like this one to determine the best option.

Your bank account will thank me later, even if your liver doesn’t.

Feeling overwhelmed about how to use your points and miles? I’m here to help. In this column, I answer your questions about the baffling world of travel rewards, cutting through the jargon to provide clear answers to real problems. Send your questions to skemmis@nerdwallet.com.

The article Booking Last-Minute Spring Break Travel? Here’s How to Get the Most From Your Miles. originally appeared on NerdWallet.

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Which Airline Has the Most Valuable Rewards?

Posted on by Sam Kemmis

Many factors go into choosing airline loyalty, from the legroom (or lack thereof) to the customer service (ditto). Yet the one variable that matters most is also the hardest to answer with a simple Google search: Which airline’s rewards program offers the most value?

Not knowing the answer to this simple question is like trying to choose between job offers without knowing how much each one pays. Who cares which office has complimentary La Croix if you don’t know the salary?

You might think the answer is simply the value of each airline’s frequent flyer miles. After all, if 1,000 American miles are worth twice as much as 1,000 Alaska miles (spoiler: they aren’t), then American’s program is twice as valuable as Alaska’s, right?

Not so fast. What if flying with Alaska earns you twice as many miles as flying with American? Believe it or not, you don’t earn miles based on how far you fly with most airlines nowawadays, but rather on how much you spend. And the number of “miles” earned per dollar spent varies by airline. Mind: blown.

The value of an airline rewards program therefore depends on two factors:

  1. The value of award miles.
  2. The rate at which you earn these miles.

So which airline offers the best value? Let’s start with the value of those miles.

The ‘most valuable miles’ winner is …

Our team at NerdWallet did a huge analysis of airline mile value that involved many spreadsheets, formulae, and, well, nerdiness. I’ll spare you the messy details, but the TL;DR is this: We cooked up these numbers by comparing hundreds of real redemptions on real routes. Here’s where we landed:

  1. Southwest: 1.4 cents/mile
  2. JetBlue: 1.3 cents/mile
  3. Delta: 1.1 cents/mile
  4. American: 1.0 cent/mile
  5. Alaska: 0.9 cent/mile
  6. Hawaiian: 0.9 cent/mile
  7. United: 0.8 cent/mile
  8. Frontier: 0.6 cent/mile

The ‘fastest mile-earning’ winner is …

Remember how I told you that you don’t earn miles based on how far you fly with most airlines anymore, and you were like “no way” and I was like “yes, really”? It raises the question of which airline doles out the most miles.

To figure that out, we did a whole other spreadsheet-y analysis that’s too boring for words. Below you’ll see how many miles you can expect to earn with a given program based on how much you spend. That is, if you spend $100 for a ticket with Frontier, you can expect to earn 1,050 Frontier miles.

Here’s how the numbers shook out:

  1. Frontier: 10.5 miles/dollar
  2. Alaska: 8.3 miles/dollar
  3. Hawaiian: 6.3 miles/dollar
  4. Southwest: 4.7 miles/dollar
  5. American: 4.2 miles/dollar
  6. Delta: 4.1 miles/dollar
  7. United: 4.0 miles/dollar
  8. JetBlue: 2.4 miles/dollar

As a points and miles nerd, I was stunned by this information. Stunned, I say!

Not stunned yourself? Think of it this way: Frontier awards four times as many miles per dollar spent as JetBlue. But of course, JetBlue miles (technically “points”) are worth a lot more than Frontier miles, as the first table shows — which leads us to the payoff at last.

The ‘overall most-valuable’ winner is … Alaska Airlines

This is the least-nerdy part of this whole thing, don’t worry. To determine the value of each program, we just multiply the value of miles by the rate at which those miles are awarded.

What pops out is the effective cash back you can expect to earn for each dollar spent with the airline:

  1. Alaska: 7.5% return on dollars spent
  2. Southwest: 6.6% return on dollars spent
  3. Frontier: 6.3% return on dollars spent
  4. Hawaiian: 5.7% return on dollars spent
  5. Delta: 4.5% return on dollars spent
  6. American: 4.2% return on dollars spent
  7. United: 3.2% return on dollars spent
  8. JetBlue: 3.1% return on dollars spent

While Alaska doesn’t offer the most valuable miles in our analysis, it is one of the few airlines that still awards miles based on how far you fly. Turns out that’s a much faster way to earn them than the “revenue-based” systems from the bigger airlines like American, Delta and United — which delivers more value overall.

Of course, not everyone lives in an area served by Alaska Airlines, which makes Southwest and Frontier strong alternatives.

Feeling overwhelmed about how to use your points and miles? I’m here to help. In this column, I answer your questions about the baffling world of travel rewards, cutting through the jargon to provide clear answers to real problems. Send your questions to skemmis@nerdwallet.com.

Sam Kemmis is a writer at NerdWallet. Email: skemmis@nerdwallet.com. Twitter: @samsambutdif.

The article Which Airline Has the Most Valuable Rewards? originally appeared on NerdWallet.

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