Survey: 77% Of Holiday Travelers Are Adjusting Their Plans This Year Due To Inflation And Rising Costs

Forget tree trimming or family dinners — a more popular activity this holiday season may be loading the car for a road trip. Almost half (48 percent) of U.S. adults plan to go on an overnight leisure trip this holiday season, according to a new Bankrate survey.

However, many holiday travelers may not have been originally planning to travel by car: Rising prices and inflation this year are likely to have caused 77 percent of holiday travelers to modify their plans, with 27 percent of travelers likely to take a car instead of a plane to their destination, specifically due to inflation.

Despite costs, more people expect to travel this year than in 2022, when 43 percent planned to take an overnight holiday trip, according to last year’s Bankrate survey on holiday travel.

No matter where they’re going, Americans are determined to travel this holiday season, even if their trip will be altered from their original plans.

Bankrate’s key holiday travel insights

Nearly half of U.S. adults are taking a holiday trip in 2023

Holiday travel has bounced back since COVID-19. Nearly half, or 48 percent, of U.S. adults plan to take an overnight leisure trip for the winter holidays (Thanksgiving to New Year’s Eve), according to Bankrate. That’s up from 43 percent in 2022, when Bankrate conducted the same holiday travel poll.

“When people are splurging right now, it tends to be on experiences rather than physical items,” Bankrate Senior Industry Analyst Ted Rossman says. “To save money and find the best availability, I think it makes sense to book early. Look to save money by cashing in credit card rewards, frequent flyer miles and hotel points.”

Exactly how travelers will get to their destination varies. One in three (33 percent) Americans plan to travel by car — making it the most popular travel method — and 17 percent plan to travel by plane. Less commonly, 6 percent plan to take a train and 5 percent are planning to travel by boat/cruise:

Source: Bankrate survey, September 12-14, 2023

*(i.e., Thanksgiving, Christmas, Hanukkah, New Year’s, etc.)

Many travelers seem to be planning to stay with friends or family, because only 16 percent plan to pay for a hotel, motel or short-term rental.

Higher-income households are far more likely to celebrate the holidays away from home than lower-income households. Households with at least a six-figure income are most likely (64 percent) to take an overnight trip this holiday season:

• Less than $50,000 a year: 42 percent
• $50,000-$79,999: 51 percent
• $80,000-$99,9999: 53 percent
• $100,000 a year or more: 64 percent

October is the most popular month for booking holiday travel this year

Close to half (46 percent) of holiday travelers are likely to have booked their travel reservations by Halloween.

By mid-September, when Bankrate polled survey respondents, 12 percent of holiday travelers said they had booked their holiday travel reservations before September, and 11 percent said they had booked earlier in September or expected they would by the end of the month.

Around one-quarter (22 percent) of holiday travelers said they would book in October, making it the most popular month to reserve holiday travel reservations:

Source: Bankrate survey, September 12-14, 2023

Note: Of U.S. adults who are traveling this holiday season

Another 15 percent of holiday travelers plan to book their reservations in November, while only 9 percent plan to look for last-minute reservations in December.

More than 1 in 4 holiday travelers are driving instead of flying due to inflation and rising costs

Inflation has impacted holiday travelers for over a year, driving up the cost of flights, gas, food and other expenses. Around three-quarters (77 percent) of holiday travelers say they’re changing their plans due to inflation this year, roughly unchanged from 2022, when 79 percent changed their plans.

Most commonly, 27 percent of holiday travelers say they’re driving instead of flying due to inflation/rising prices. Others say they’re taking fewer trips (23 percent), selecting less expensive accommodations or destinations (23 percent), traveling shorter distances, engaging in cheaper activities or traveling for fewer days (21 percent each):

Source: Bankrate survey, September 12-14, 2023

Note: Of U.S. adults who are traveling this holiday season

Additionally, 17 percent are likely to be using reward points, miles or loyalty programs; and 14 percent say they’re flying instead of driving to their destination.

“To save money and find the best availability, I think it makes sense to book early,” Rossman says. “Look to save money by cashing in credit card rewards, frequent flyer miles and hotel points. And try to be flexible with your dates. Especially if you’re flying, going a few days before the biggest rush and/or coming back a few days later could save you a lot of money.”

The vast majority of Gen Z holiday travelers are likely to change their plans due to inflation. The tendency decreases as people age:

• Gen Z (ages 18-26): 86 percent
• Millennials (ages 27-42): 80 percent
• Gen X (ages 43-58): 77 percent
• Baby boomers (ages 59-77): 68 percent

Likewise, lower-income households are more likely to be changing their holiday travel plans due to inflation:

• Less than $50,000 a year: 86 percent
• $50,000-$79,999: 78 percent
• $80,000-$99,9999: 68 percent
• $100,000 a year or more: 69 percent

More than half of holiday travelers will book with a credit card

Credit cards are the payment method of choice for holiday travel this year. More than half (57 percent) of holiday travelers will use a credit card for at least some of their expenses. That includes 36 percent who will use a credit card and pay in full.

Additionally, 45 percent of holiday travelers will use a debit card or cash for at least some of their expenses and 21 percent will use reward points. One in ten (10 percent) plan to ask friends or family to pay for at least some of their expenses:

Source: Bankrate survey, September 12-14, 2023

Note: Of U.S. adults who are traveling this holiday season

Others will pay their travel expenses over time: 21 percent of holiday travelers will use a credit card and pay the balance over time and 8 percent will use a buy now, pay later service.

“You still have time to save money from every paycheck between now and the end of the year to avoid a holiday debt hangover,” Rossman says. “With credit card balances and interest rates both at record highs, you don’t want to be still paying off this Christmas a year from now — or worse.”

More than two-thirds of holiday travelers have concerns about their plans

The majority of holiday travelers don’t expect a smooth ride. More than two-thirds (69 percent) of holiday travelers have at least one concern about their upcoming plans.

As travelers see higher prices on holiday expenses, 31 percent of holiday travelers are worried their trip or trips will place a strain on their budget. Additionally, 25 percent will feel pressured to spend more than they’re comfortable with:

Source: Bankrate survey, September 12-14, 2023

Note: Of U.S. adults who are traveling this holiday season

Following widespread travel disruptions over the last year, 27 percent of holiday travelers say they’re now worried their travel plans could be disrupted, due to airline delays or cancelations, weather disruptions, extra lodging expenses, lost luggage and other concerns.

Younger generations are more likely to have financial concerns about their trips compared to older generations. The majority (81 percent) of Gen Zers are likely to have at least one financial concern about their plans:

• Gen Z: 81 percent
• Millennials: 75 percent
• Gen X: 71 percent
• Baby boomers: 53 percent

3 steps to pay off your debt — and stay out of it — after the holiday season

Nearly one-quarter (21 percent) of holiday travelers expect to use credit cards for their expenses and plan to pay them off over time. But when the average credit card interest rate is over 20 percent, you might find yourself paying off that card for longer than you expected. Consider these tips to avoid a holiday hangover:

1. Decide how much you can set aside for debt repayment.

Under traditional budgeting methods like the 50-30-20 rule, 50 percent of your take-home income is for necessities (including minimum debt repayments), 30 percent of your budget is for discretionary purchases and 20 percent is for savings or debt repayment. This budgeting strategy isn’t perfect for everyone, but you can use it to understand your most important expenses and figure out how much you have to put toward repaying credit card debt. Ideally, you can pay down debt aggressively and also save, but that’s not possible for every budget. If you have high-interest credit card debt, or you’re feeling anxious about your debt, prioritize paying down your debt over savings.

2. Choose a repayment strategy.

Now that you know how much you can afford to put towards debt repayment, choose your strategy. If you’re trying to pay off the single high-interest credit card you used for your holiday spending, you might want to use the avalanche method, where you pay off your highest-interest debt first before moving on to other sources of debt. If your interest rate is too high, consider a credit card balance transfer to open a new card with lower — or no — interest.

3. Save for next year’s holidays now.

If you know you like to go all out during the holiday season, start allocating a small percentage (like 5 percent or 10 percent) of your savings every month as soon as you can for medium-term goals like the 2024 winter holidays. Having portions of your savings set aside for short-, medium- and long-term goals makes you think purposefully about what you’re saving for, and helps you prepare for whatever expense you have in the future.

FAQs

• How do you travel on a budget?

  Timeliness and flexibility are the keys to traveling on a budget. Try booking far in advance and keeping your travel dates flexible to score the best deal on airline tickets.

• Are there any financial benefits to booking holiday travel in advance?

  You can save about 10 percent on your domestic flight by booking at least a month in advance.

• What are some ways to minimize additional fees and charges during holiday travel?

  One way to minimize additional fees and charges is by packing light to avoid checking luggage on flights. You can also avoid baggage fees, resort fees and other extra charges by using a travel credit card to book your trip.

Methodology

All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,419 US adults, including 1,205 who anticipate traveling for the holidays. Fieldwork was undertaken between 12th – 14th September 2023. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.