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Traveling in a Tight Economy

The dollar is at an all time low against the euro and worth less than half a pound. Airfares are going up; hotel rates are going up even faster. Gas will soon hit $4 a gallon. And the U.S. economy is in the tank. Overall, today’s travel outlook is the worst I’ve seen in more than 50 years of study. Still, you want to enjoy your vacations. Quite a few of you have been asking, “How best to cope?” Several recent surveys point to some obvious strategies, and I can summarize a few suggestions I’ve made as well.

The big picture: downsizing

According to a recent survey by AIG Travel Guard, a large majority of travelers will not cut down the number of trips they take this year. Instead, that survey says about half plan to “downscale” their trips, and a similar survey by Ypartnership and the Travel Industry Association says about two-thirds have already started “downsizing” their trips.

Those findings track with my own observations. Over several survey cycles, I’ve found that when bad times hit, Americans don’t stop traveling; instead, they keep traveling but find ways to cut their costs.

Downsize time or expenses?

Clearly, you can downsize your vacation expenses either by reducing what you normally spend per day or reducing the number of days (or trips) but continue to spend at your preferred rate. For a vacation trip, you can easily downsize both the daily costs at your destination and your transportation costs. For visiting friends and relatives, on the other hand, about all you can downsize is the number of visits.

As far as I can tell, most of you prefer to cut down your daily expenses rather than the length of your trips. Accordingly, the rest of this report is focused on cutting total and daily costs rather than shortening your vacation periods.


Travel press reports highlight one of the most obvious ways to cut costs: Head to places where overall destination costs are lower.

  • In the U.S., that means avoiding the really expensive big cities&#8212notably New York City&#8212and choosing smaller cities or rural destinations.
  • Internationally, that means visiting areas where the economy is tied to the U.S. dollar, including much of Latin America and the Caribbean. It also means heading for other areas where local rates are still reasonable, including much of South Asia.
  • In Europe, it means avoiding ultra-expensive London and most of western Europe, and instead heading for the east. If you want to visit western Europe, avoid most big cities and tour the countryside.


Here, your choices are pretty obvious:

  • Drive to a nearby resort instead of flying to a more distant one. If your car is a real gas guzzler, rent an economy car or hybrid for the trip.
  • If you fly, schedule your trip around the days for which you can find the best deals. If limited competition keeps fares at your local airport high, drive to the nearest airport where you can find competitive rates.
  • There’s always Amtrak, if it happens to go where you want&#8212but stay in coach; sleeper accommodations are expensive. And there’s always (ugh!) Greyhound.


Hotel prices are up about 10 percent this year, and more than that where the U.S. dollar has fallen. So unless you’re staying for just a day or two, you’re likely to spend more for hotel accommodations than airfare. Here’s how to cut costs:

  • For the lowest rates on mid-market or upscale hotels, book through an opaque site. “opaque site But use an opaque site only if you’re 100 percent sure you won’t want to cancel, because you won’t get a refund if you do.
  • Go downmarket, to budget hotels&#8212you can do that practically everywhere in the U.S. and in Europe.
  • Arrange a home exchange or hospitality exchange. You can’t beat “free,” even though those exchanges actually entail some minor costs.

Food costs

Wherever you go, you can usually pay less than you’re used to paying for food:

  • Avoid the temptation of having dinner in a different hotshot restaurant every night. If you have to sample a few celebrity-chef concoctions, try them at lunch rather than dinner. And take most of your meals at the restaurants regular local people visit&#8212who knows, you might even prefer good ordinary fare to the effete cuisine at the top spots.
  • Use take-out for some meals or do picnic lunches. If you stay in a vacation rental, preparing some of your own meals can cut costs substantially.

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