Average prices on domestic flights may have started trending downward, but a lot of other expenses have gone up sharply. Here’s a breakdown of what to expect, depending on where you want to go.
If the cost of last year’s holiday vacation was too much for you, you might find winter travel in 2023 more appealing—though an unusual Christmas break schedule may throw your plans off.
“Room rates have rebounded slightly from the 2022 holiday season, when they rose 50% from pre-pandemic levels,” explains Patrick Scholes, managing director for lodging and leisure equity research at Truist Securities, an Atlanta-based investment firm.
This year’s holiday travel will also be impacted by the fact that Christmas and New Year’s Day will both fall on a Monday, which happens roughly every seven years. “When this happens, it pushes the holiday into a very short window because it’s not clear when the second week of Christmas vacation should be,” says Paul Tumpowsky, CEO of Skylark, a New York-based travel agency. As a result, bookings concentrate into the obvious week, raising prices while decreasing availability.
According to Consumer Price Index data released in September by the US Bureau of Labor Statistics, airfare from the US has dropped significantly (more on that below), even when compared to levels prior to the pandemic.
According to Hayley Berg, lead economist at the travel booking app Hopper, the coming weeks should be a good time to book winter vacations.”We anticipate that ticket prices will fall in the last two weeks of September before rising again in the second week of October,” she says, adding that prices will peak in late November or early December.
Here’s what you can expect to pay.
Domestic prices are falling, but international travel is increasing.
Domestic holiday flights will be down about 9% from last year, according to Hopper data compiled exclusively for Bloomberg, though prices will vary by city. Roundtrip airfare from major US cities to destinations like Orlando, for example, is down 19% and will cost $396 per ticket around Christmas, compared to $491 last year.
Flying into Las Vegas for the holidays this year will cost $341 per seat, down from $420 last year.
International flight prices, on the other hand, are rising. Many people are seeking to travel to Europe and Asia now that they have overcome their renewed fears of being stuck overseas due to a Covid-19 surge in 2022.
According to Hopper, Christmastime airfare from the United States to Asia is up 20% year over year; a ticket to Tokyo, the continent’s most popular holiday destination, will cost around $1,572.Prices in Europe are roughly 16% higher than at Christmas 2022; economy-class tickets to major hubs from the US cost an average of $934 per seat.
Consider the following for a better deal:
What to Do and How Much It Will Cost
According to Virtuoso, a network of more than 20,000 luxury travel advisers, the United States, Mexico, Costa Rica, the Caribbean, Europe, and Thailand will be the hottest global destinations this winter. “Globally, we see the United States as the top holiday destination, not just for Americans, but for travelers the world over,” says Misty Belles, vice president of global PR at Virtuoso.
She observes that holiday lodging rates have fallen from last year in major US cities such as New York (down about 8%) and Los Angeles (down nearly 50%), as domestic travel to those cities has decreased due to the pandemic. In sunny Florida, smaller discounts on hotel rates are available.
You might even get a deal on your ski trip if you ignore rising lift ticket prices.
“Hotel rates in Vail, Colorado, are down about 13% over last year,” Belles says, adding that rates have cooled in destinations across Colorado, Utah, and California, where rates soared during the pandemic’s second year. (A strong El Nio may favor snowfall in the West this season.)
However, hotel rates are rising in many cities around the world, surpassing last year’s peak pricing. According to Belles, luxury hotel rates are up 44% in London and 30% in Hawaii. “Cabo San Lucas [in Mexico’s Baja, California] is commanding hotel rates up to 49% over 2022,” she writes.
During the Christmas week, for example, an ocean-view room at Waldorf Astoria’s Los Cabos Pedregal resort costs $2,271 per night. Prices in the Caribbean are even higher. An ocean-view room at the Ritz Carlton Grand Cayman on the island’s Seven Mile Beach, for example, costs $2,838 per night during Christmas week, while a garden-view room at the Four Seasons Ocean Club in Nassau, Bahamas, costs $3,200 per night. A few weeks later, the daily rate for the same room drops to $2,050.
There are no discounts for road trips or early January travel.
Aside from lodging and airfare, travelers are being impacted this year by high gasoline prices for on-the-ground transportation needs, especially with prices still rising in some areas. Inflation-affected food expenses for eating out and grocery shopping will also raise travel costs. “Even as inflation slows, consumers are seeing higher prices than they may have paid for goods and services in the last few years,” Berg writes for Hopper.
This will not slow down travelers. Demand is expected to remain high this winter, especially during the busy holiday season, according to industry representatives. While some employees’ vacation time may be reduced this year, travelers with young children will find that Christmas and New Year’s falling on Mondays will likely result in a longer break from school this year. Most public schools resumed normal operations on January 3 this year, but not until January 8 in 2024. “That extra week of January winter break is already proving very popular for families—all of January 2024 is expected to be up about 7% in revenue from last year as a result,” Scholes explains.
Indeed, Belles predicts that lodging demand will exceed last year’s during the holiday season.They will outperform it.
Scholes is relieved that his family has already reserved their holiday vacation. “Because this year is so different, we booked as soon as we got our kids’ winter break schedule from their school.”