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Travel: How to plan a last-minute trip amid rising inflation

Hopper Lead Economist Hayley Berg shares several tips for how to plan a last-minute vacation on a budget amid rising travel costs.

Video Transcript

SEANA SMITH: All right, let's stick with travel here because we are just two weeks away from Memorial Day weekend, the kickoff to the summer travel season. But if you're planning to take a vacation, get ready to pay even more. There's new data out from Hopper showing that the cost of hotel stays, they're up 36% from a year ago. Car rental rates surging 20% since the beginning of the year. So what's the best way to plan for a trip on a budget?

We want to bring in Hayley Berg, lead economist at Hopper. And Hayley, when you take a look at the numbers, the demand is certainly there, but people who are traveling, they're going to have to pay even more here if they haven't planned their trip yet. So what do people need to know when they are planning to take a vacation over the next couple of months?

HAYLEY BERG: If you're planning to get out there and travel this summer, planning ahead is one of the best ways to get a great deal. Start monitoring prices early so that you'll be notified proactively when prices start to rise or if it's the right time to book. Really savvy travelers, though, are going to be super flexible. Flying midweek can save you $75 off of airfare for domestic travel. Or checking in on a Saturday instead of a Friday can save you more than $75 on your nightly rate at a hotel.

DAVE BRIGGS: Hayley, I was surprised to see that the inflation, 18.6% on a domestic airline ticket, is not really the same when it comes to international travel. Why so the disparity, and how much can you save actually traveling internationally versus domestically?

HAYLEY BERG: International travel right now will only cost about 2.5% more than it did in 2019, compared to about 35% on domestic flights. And the reason for that is slower recovery on demand. We have seen a huge surge in demand for domestic travel and more regional travel to Mexico, Central America, but not so much of a surge to destinations in Europe and Asia. So international airfares on average have remained pretty much in line with 2019, given that slower return to demand.

SEANA SMITH: Hayley, you mentioned that surge in domestic travel. Where are people going?

HAYLEY BERG: Travelers are staying domestic, so domestic is still primarily where Americans are going. But they're headed to big cities like Las Vegas. Florida is an incredibly popular state this year, beach destinations, and Miami, Fort Lauderdale, Disney World, and Orlando. So a lot of destinations for travelers who are looking to go on a leisure vacation-- beaches, outdoors, and big cities.

DAVE BRIGGS: Tell you what, I found that out trying to book a Disney trip. It was out of my league. Are there destinations domestically that you can fly in particular to save money, maybe middle of the country locations?

HAYLEY BERG: The best way to get a deal is planning ahead, but there are some less expensive destinations. Think of smaller cities or cities that have multiple airports that might have lower prices. Boston is a great example. You can fly into Boston or into Providence, which has a few different low cost carriers. So if you can be flexible on where you're going, do some research from your own airport, and you're likely to find some really great deals.

SEANA SMITH: Hayley, we've been talking so much about inflation. It's not just on airfare, for example. People are paying more and more when they go to the groceries, when they're filling up their car. I've read a couple of pieces of information and various travel sites saying that people are actually canceling their trips because of the higher costs that they are facing on a day to day basis. I'm curious if you at Hopper, if you guys are seeing this trend.

HAYLEY BERG: It's a hypothesis we've heard a few times, but so far, in our data at Hopper, we've not seen any slowdown in demand for airfare, for hotels or rental cars. In fact, we did a survey of Americans just a few weeks ago, and more than 50% of them said that they expect in our planning to spend more than $1,000 on their summer travel this year. And about 27% plan to spend more than $2,000. So prices are higher, but it does seem like for now, consumers are-- they've been stuck at home. They're ready to travel, and that pent-up demand is going to allow for these higher prices, at least for a little while longer.

DAVE BRIGGS: Can't help, but wonder where demand, the destruction comes in here. I'm on the Hopper app here. How does it differ from all those others on the marketplace?

HAYLEY BERG: You know what? Hopper, we have two key differences. One is that we are going to give you advice to help you save money. So if you're looking to book a flight, we're not just going to tell you the price. We're going to tell you, you should wait for a lower price. We expect that price to be available on this date. And we'll notify you proactively.

In addition to that, we've developed this suite of fintech products that help reduce price anxiety, risk, things like flight disruption protection that travelers can add to their bookings that enable them to rebook flights that are canceled for free, or if they miss a connection, we'll get them on the next flight without having to pay the difference. So fintech and using data to help make the traveler booking and traveling experience better is, it's our bread and butter, and it's what we do best.

SEANA SMITH: Hayley, the big driver here on the travel industry over the last two years has been COVID, and we're starting to see those headlines that cases are rising pretty significantly. We're seeing the highest number of cases that we've seen since November. Any idea how that's been impacting at least bookings over the last couple of weeks?

HAYLEY BERG: Mm-hmm. Typically, we see a slowdown in airfare bookings, at least, during the month of April in that section of time between spring break and summer travel booking. And at Hopper, what we've seen is that little bit of slowdown in April and then a resurgence in bookings in May. So we haven't yet seen anything unusual, but are expecting to see a really strong summer, continued travel.

SEANA SMITH: All right, Hayley Berg, Hopper's lead economist, thanks so much for taking the time to talk to us.