Many North Americans are looking to travel this summer. Most hope to find a good deal. Unfortunately, that’s not how the law of supply and demand usually works.

Air travel has nearly returned to pre-pandemic levels. Hotels are filling up and vacation rentals are booming. And airlines are hampered by staff shortages, including the rather critical people flying the planes – pilots.

“Demand across the board for summer 2022 travel is up 20% to 25% relative to 2019,” says Jamie Lane, VP of research at AirDNA, a vacation rental data platform that tracks trends on Airbnb and Vrbo.

Volatile oil prices will also impact summer travel costs. The price of US Gulf Coast kerosene-type jet fuel hit $3.77 per gallon in March, up from $0.46 per gallon at its low point in May 2020. And just this week, both Air Canada and Transat both stated categorically that consumers should expect fare hikes.

With so many factors pushing travel prices upward, where are the deals? And what destinations should budget-conscious travellers avoid altogether?

Zig while others zag

The rise of inflation has reminded consumers of a simple economic truth: When everybody wants something and there isn’t enough of it, prices go up. This is true for real estate, microchips, and airfare. So, when planning a trip for this summer, it’s helpful to know where demand remains high.

“Destination resort areas are up 40% over 2019,” says Lane, of vacation rental occupancy rates.

Mexico has been a particularly hot destination for travellers, due to proximity and easygoing testing requirements. Indeed, the number of travellers to Mexico in March 2022 was up nearly 20% compared with 2019 levels.

Deals for summer travel in Mexico could still exist, but they’ll be harder to find than in less popular destinations.

Similarly, many smaller Caribbean islands (and resorts) are already booked out for Canadians, in part because our neighbours to the South got the jump on travel before we did, reserving much of the space.

One hotel rep pointed out to Travel Industry Today that in upside-down post-pandemic world, luxury rooms and suites are filling up faster than lower-end room categories as consumers look to make the most of their return to travel (and have unspent cash to burn). Thus, lower expectations may be the best bet for finding space.

Meanwhile, Lane suggests targeting destinations that rely heavily on foreign visitors and have been slower to recover tourists.

“Places like Croatia, Italy, and Greece have been very slow to recover and are down anywhere from 40% to 60% in demand. They haven’t seen the price increases that we’ve seen (elsewhere)”

Flight bookings to Europe dropped after the start of the Russia-Ukraine war, according to data from Hopper, a travel booking app, suggesting that travel to the continent could remain sluggish through the summer. That means deals could (and should) follow.

“A last-minute booking in Croatia? You’re going to find a great deal,” Lane says.

In Canada, competition between a number of low-cost carriers and new start-ups is expected to keep domestic prices down (at least among the ULCCs), even as international and transborder fares soar.
Book (some things) late

The pandemic has reshaped how many travellers make plans. Instead of cementing dates months in advance, many began booking trips mere weeks away. And despite much conventional travel wisdom, this approach is actually a good way to secure deals.

“Generally, if you book far in advance, you’re going to pay more,” says Lane, pointing to how the Airbnb pricing algorithm will drop prices at the last minute to fill remaining availability. “As you get closer to the stay date, if it’s not booked, you’re going to get a discount.”

The same is true of hotels, which are often cheaper to book within a few weeks or days of your stay rather than a few months. Similarly, deals on rental cars are generally easier to find at the last minute.

This advice comes with two big caveats. First, if demand does outstrip supply at a particular destination, prices could actually go up in the few weeks before a trip rather than down. Worse, availability could dry up altogether, leaving few cars or vacation rentals available.

Second, last-minute airfare is usually costlier. This is not an ironclad rule – last-minute deals can pop up, but they’re more common a month or more out.

Stay flexible

The only thing we don’t know about what will happen this summer is everything. Another variant could emerge. Borders could close. International conflicts could escalate. Who knows? That’s why flexibility is a must for finding deals.

Rather than making a firm plan to visit a particular destination, follow the deals. See what airfare and accommodation deals are available on target dates and build a trip around them. Flexibility has always been important for budget travel. Now it’s necessary.

And make sure to only book travel that can be easily changed or cancelled. A great deal on airfare with a low-cost airline could carry high change and cancellation fees. The same goes for basic economy fares, which usually can’t be changed or cancelled at all.