Emma Chavez, one of my colleagues, doesn’t travel for the holidays. Her side of the family lives in Sweden, so she tends to visit them during less popular times of the year to save money.
Instead, her mother-in-law usually drives from Vancouver to Seattle, Washington, to stay with Chavez and her husband over the holidays. “We cook and bake together, do movie marathons, take walks and get coffee locally,” Chavez says. “It becomes a very cozy family time and the weather or traffic never causes us any stress.”
She’s one of many Americans whose seasonal travel plans are based on a budget. When you factor in the cost of holiday shopping, staying home for the holidays — or adjusting your plans — may end up on your wish list.
According to a new Bankrate survey, more than 4 in 5 holiday travelers (83 percent) are finding ways to save money on travel this season. Others are taking on debt to pay for it.
“The cumulative effect [of inflation] is the problem,” says Ted Rossman, Bankrate industry analyst. “Multiple years of paying more for everything from housing to food, gas and discretionary items has eroded savings and increased debt. And prices are still rising, they’re just rising more slowly.”
While inflation has come down significantly, it’s straining holiday travelers even more this year.
— Ted Rossman, Bankrate Senior Credit Card Analyst
Key insights on 2024 holiday travel
Cutting costs is the new tradition: Here’s how holiday travelers are changing plans to save money
New Bankrate data shows that 83 percent of holiday travelers are changing their plans due to inflation. Here are a few tweaks they’re making to their itineraries.
Thirty-two percent of holiday travelers anticipate traveling for fewer days, while 30 percent are picking less expensive accommodations and/or destinations. One-quarter (25 percent) are engaging in cheaper activities.
Twenty-eight percent are driving instead of flying, but 23 percent are flying instead of driving.
Twenty-three percent each are taking fewer trips and using rewards points, miles or loyalty programs. Twenty-one percent are traveling a shorter distance, and 2 percent are making some other change.
Meanwhile, 17 percent say inflation hasn’t changed their holiday travel plans.
Rossman points out that travel isn’t totally off the books.
“Despite economic worries, people are still traveling — this is on pace to be a record year for TSA passenger screenings,” he explains. “But they’re traveling differently.”
Many [travelers] are cutting corners such as spending fewer days away from home, selecting cheaper accommodations and driving instead of flying. They don’t want to skip the trip entirely, but they’re willing to make adjustments that lower the cost.
— Ted Rossman
Bankrate Industry Analyst
Inflation affects households of all incomes this holiday travel season
Among households earning under $100,000 a year, more than 4 in 5 (86 percent) are changing their holiday travel plans due to inflation.
That’s more than the roughly 3 in 4 households (77 percent) with annual incomes above $100,000 who are also doing things like driving instead of flying and traveling for less distance or time. Still, a clear majority of Americans are changing plans, no matter their income.
Younger generations are more likely to change their holiday plans
The generation most likely to have travel plans affected by inflation are millennials (86 percent). Gen Zers and Gen Xers follow closely behind at 84 percent and 83 percent, respectively.
Only 72 percent of baby boomers plan to change their travel plans due to inflation. This could be because older generations may have more income, fewer travel obligations, no kids to bring along or a combination of factors.
My Gen Z colleague, Madison Hoehn, told me she and her boyfriend drive 18 hours with their dog and cat from Cincinnati, Ohio, to Denver, Colorado, for the holidays to avoid spending hundreds — if not thousands — of dollars on flights and animal boarding.
The money they save on travel helps pad their gift budget. But she points out that driving so far with two pets in the car is no small feat.
People planning to fly this holiday season are expecting to pay a high cost
Flights are not a popular option this holiday season. Fewer than 1 in 10 Americans (8 percent) plan to fly for Thanksgiving. Only 1 in 7 (14 percent) plan to fly for the December holidays.
People who plan to fly for Thanksgiving expect to pay an average of $925 total to do so. The costs go up for the December holidays, when people expect to pay an average of $1,165 total.
Marlese Lessing, another Bankrate colleague, is opting to fly a few days before Thanksgiving to beat the rush. Fortunately, her in-laws are driving so they can bring her dog and extra baby supplies.
She also notes that she’ll stay with family instead of in a hotel. And she can use an employee discount for the car rental.
The average holiday hotel or short-term rental stay may reach $950
If you do travel for the holidays, it begs the question — where will you stay? Your childhood bedroom or a spare futon can be more affordable than a hotel, although maybe less comfortable.
A little more than 1 in 10 Americans (11 percent) plan to stay in a hotel or short-term rental (e.g., Airbnb, VRBO) for Thanksgiving. One in 7 (14 percent) plan to stay in a hotel or short-term rental for the December holidays.
Those staying in a hotel/short-term rental for Thanksgiving expected to pay an average of $854. For Christmas, the average stay is up to $950.
More than 1 in 4 holiday travelers will take on debt
Credit cards are expected to be the most popular payment method for holiday travel (59 percent). That includes 37 percent of holiday travelers who plan to pay off the balance in full and 22 percent who plan to carry a credit card balance.
Almost half of holiday travelers (45 percent) say they plan to use a debit card or cash. Nearly 1 in 4 travelers (24 percent) plan to use rewards points (i.e., from a credit card, airline, hotel), 13 percent will ask friends or family to pay and 10 percent plan to use buy now, pay later (e.g., Affirm, Afterpay, Klarna) services.
Overall, more than 1 in 4 travelers (29 percent) plan to take on debt in the form of either carrying a credit card balance or using a buy now, pay later service, with some overlap between the two.
My colleague Natasha Cornelius leans on her credit card rewards to help cover holiday flights. Last year, she and her boyfriend left their family Thanksgiving trip early to coordinate with her Delta SkyMiles® Platinum American Express Card companion pass expiration date. “We decided to shorten our trip versus pay out of pocket for the flights,” she explains.
How to stretch your dollar for every form of holiday travel
Heading out of town for the holidays doesn’t have to leave you with empty pockets. Here are a few tips for saving money — and earning rewards — this season, depending on your mode of travel.
If you’re flying:
When searching for flights over the holidays, consider booking on the cheapest day — Sunday – and traveling on a weekday. You can often save a buck by leaving on a Thursday instead of a Saturday. And price alert tools like Hopper and Google Flights’ tracker can keep you in the loop when the price drops on a flight you’re eyeing.
One of the best airline credit cards can also earn you points or miles on everyday purchases to put toward future trips. You’ll usually earn extra rewards for travel purchases made through the card issuer’s portal or with transfer partners. Plus, you can get perks like companion passes, statement credits and travel insurance to take the hassle out of holiday travel.
If you’re driving:
For those planning to drive instead of fly, there are some easy ways to road trip on a budget. Try packing your own snacks and meals, staying with an acquaintance or even camping for overnight trips and avoiding traffic-heavy days.
A credit card that earns cash back on gas can be a good addition to your wallet. You have to buy gas anyway, so you might as well let it fund your next coffee pit stop.
If you’re staying in a hotel:
Don’t feel like sleeping on the couch in a home with your entire extended family? Sometimes, staying in a hotel for a holiday vacation is the best, or only, option.
Using a hotel credit card to pay for your stay can get you points toward future stays and include hotel perks like free nights, elite status, complimentary breakfast and late checkouts.
If you’re taking on debt:
If you’re among the 22 percent of holiday travelers who plan to use credit card debt to pay for your trip, use caution — credit card interest rates are still very high, averaging 20.65 percent.
A strategic way to carry a balance on a credit card without accruing interest is to use a credit card with a 0 percent APR intro offer. You’ll just want to pay off the balance before the intro period ends. Some of these cards might even include cash or points rewards in the intro offer.
Wherever you go and however you get there, holiday travel requires some strategic budgeting. By using the right credit card — but ideally, not credit card debt – you can earn rewards on this holiday trip to put toward your next one.
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