Cost of summer road trips: Don’t let inflation deflate your plans

From the Grand Tetons to the Florida Keys, exploration by car is one of the best ways to create memories through travel. Last year Americans clocked in 2,163.7 billion miles behind the wheel, according to the Federal Highway Administration. As the warm weather arrives, it is the perfect time to add miles to your odometer with a road trip.

But with persistent steep inflation, any summer travel can feel intimidating. And although those costs won’t disappear with your hometown in the rearview, there are still ways to save. Consider how to budget this summer travel season and how inflation might affect your plans.

How will inflation affect summer travel?

Over the past year, inflation has impacted traveling, grabbing a bite to eat, filling up the tank and even school lunches. In February alone, inflation jumped 6 percent compared to February 2022. And while it is down from its 9.1 percent peak in June, it still sits uncomfortably high, notes Sarah Foster, U.S. economy reporter for Bankrate.

These high prices don’t mean you should stay indoors this summer travel season. But some may want to scale back their plans, advises Mark Hamrick, Washington bureau chief and senior economic analyst for Bankrate. This is especially true, he says, if your finances have been hurt by higher inflation, interest rates and declining stock prices.

Reducing summer travel budgets might be wise even for those who weren’t dramatically impacted by financial woes. A recent Bankrate survey found that the amount Americans have saved for emergencies is down and incurred credit card debt is up.

This makes summer 2023 the perfect time to go back to the basics and enjoy a summer road trip rather than jet-setting across the world — airfares are up 26.5 percent compared to a year ago.

Expected road trip costs — and how to save

One strategy to enjoy travel without overspending is to set out on a road trip. But before packing your car and buying snacks, consider the following costs that build along the way.

Hotel prices

This year, you’ll need to budget more just to grab some shut-eye.

During the pandemic, hotel prices fell dramatically with fewer people leaving home and needing places to stay. In December 2020, costs were at their lowest since 2013, according to Consumer Price Index data. But with pandemic pricing behind us and inflation ahead, you should prepare to spend more.

This is especially true in the summer, as many establishments increase prices for the travel season. U.S. hotel prices were 54 percent higher in January of 2023 than the same time last year, according to travel site Hopper. Travelers spent an average of $212 per night in the first month of the year.

While it is true that hotel costs are up, only some lodging options will carry an outrageous price tag. The highest prices will be reserved for tourist destinations.

“Destinations that are less in demand, including those not approaching peak or high season, would tend to have better prices,” Hamrick said.

Travel is a prime example of how supply and demand can dictate a higher cost, Hamrick points out.

Hotels in Las Vegas, for example, upcharge by an average of 119 percent on Saturday nights, whereas those checking in in Los Angeles see a 19 percent premium. As you choose where to stay during your travel, stick to less-popular spots that will boast cheaper hotel options.

Cost to fill up your tank

Outside of lodging, filling up your gas tank is one of road-tripping’s primary costs.

“Fortunately, gasoline is down from the peak seen last summer,” Hamrick notes. “The average for a gallon of regular unleaded gasoline was recently $3.46, down from a year ago as they approached the peak.”

But even with more manageable prices, cutting down on cost is still a wise financial decision. Consider the following ways to mitigate high gas prices:

• Drive the speed limit
• Use cruise control
• Fill up on regular (rather than premium) gas options
• Shop around to find the cheapest station
• Cut down on air conditioning use

Another way to save money is through credit card rewards, says Ted Rossman, senior industry analyst for Bankrate and CreditCards.com.

If you’re looking for a new credit card this summer, consider general-purpose cards like Citi Custom Cash, which offers up to 5 percent cash back on gas. These types of cards tend to offer better deals than a co-branded gas station card, Rossman explains. The Sam’s Club Mastercard offers similar benefits to drivers.

But Rossman also offered a warning: “Any successful credit card rewards strategy involves paying in full every month to avoid interest.”

It wouldn’t make sense to pay the national average of 20 percent on interest to receive just 1 to 5 percent cash back.

Pitstops

One of the tastiest parts of travel is the chance to dig into new cuisines. But stopping at each gas station you pass can add up. Instead, it is best to bring snacks from home. Use that extra cash on fun souvenirs, tickets to attractions and meals you’re especially excited for.

“Food away from home, including restaurants, was up 8.4 percent over the past year,” says Hamrick.

You can pack your own breakfast and lunch to reduce the number of meals you have to eat out. And when it is time to stop for a break, look out for happy hours or “kids eat free” deals to save extra cash.

But don’t forget to treat yourself: You are on vacation, after all. If you research popular restaurants and hidden gems along your route, you can plan to indulge in spots that fit both your budget and taste.

Stopping to grab an ice cream and burger is part of the fun of road trips, so leave room for spontaneity in your budget. The room to spend a bit more is just one benefit that staying behind the wheel rather than boarding a flight offers you.

While grabbing sit-down meals along your route may cost a bit more, Hamrick argues that “consumers in general and travelers more broadly have come to understand that inflation is a fact of life.”

Keep this reality in mind as you plan your trip, and don’t let averages control your summer vacation. Rather, just understand that higher prices are expected.

Road tripping in a leased car

Taking a road trip in a leased vehicle requires some extra consideration.

Lease agreements tend to restrict the miles you can drive, with overages costing you money. Annual limits usually sit at 10,000, 12,000 or 15,000. Going over can mean being charged up to 30 cents per additional mile.

When mapping out your route, consider how many miles you can reasonably expect to travel without exceeding your allotted mileage. To be safe, factor in some extra miles in case unexpected situations arise.

Budgeting is the key to successful summer travel

Hamrick calls travel “one of the casualties of the pandemic.” As restrictions ended, “leisure travelers have sought to make up for lost time, and there are higher prices to pay” thanks to increased demand.

But this does not mean it’s time to put away your suitcase and write off summer travel. Instead, traveling just requires a bit more planning and an honest budget.

Ultimately, Hamrick concludes, you are in the best position to gauge whether you can afford summer travel. But if you’re swiping your credit card and going into debt to cover costs, you’re stretching beyond what you can afford. Budget based on what you have in the bank, he says.