Foreign Travel Costs Are Poised to Soar

Interest in international travel continues to trend upward, as evidenced by the record 24 million passports the U.S. State Department issued in the year that ended last September. Air travel measured by passenger kilometer-miles grew globally over 40% in the post-peak-COVID year 2023, approaching pre-pandemic levels, and is expected to surge again this year.

If you are planning to travel abroad this year, how will this increased demand affect your budget?

Here is a look at what experts project for 2024 regarding the cost of flights, accommodations and cruises, along with tips to get the best deals on your trip.

In response to high traveler volume, airlines have increased flight schedules and routes serving international flyers. These actions are in addition to natural adjustments made after the pandemic forced drastic reductions in 2020. New low-cost airlines like Norse Atlantic Airways and Wizz Air help bring prices down industrywide.

As a result, airfares are cheaper now than they were this time last year. Fares in March 2024 were 6.1% lower than they were in February 2023, according to the Bureau of Labor Statistics. They are even slightly lower than the pre-pandemic rates of February 2020.

Even better news: the American Express Global Business Travel Air Monitor 2024 report predicts prices on certain international routes may drop as much as 12%. That does not necessarily mean you should delay booking flights in hopes that fares fall further.

• Book in advance: The days of low-priced last minute flights seem to be over. Airlines now offer the deepest discounts months ahead.

• Be flexible with dates: Flying midweek or during off-peak hours can yield lower prices. If you are in no hurry to arrive at your destination, flights with long layovers are often cheaper.

• Use fare comparison tools: Websites like Skyscanner and Google Flights help you find the cheapest options. Set fare alerts to receive notifications when flight prices drop.

After the pandemic, hotels were understandably focused on filling as many rooms as possible. Now that travel has once again stabilized, it seems the focus is shifting to properties being willing to accept lower occupancy in exchange for increased room rates.

Many countries have, like the United States, struggled with high inflation in recent years. This lower occupancy/higher rates strategy can actually increase profitability since lower occupancy helps reduce hotel operating costs.

BCD Travel's Q4 Travel Marketing Report forecasts that international hotel rates will climb by 6.8% in 2024. Amex GBT's Hotel Monitor 2024 paints an even grimmer picture, predicting rates rising as much as 17.5% in some cities.

• Travel during shoulder season. The months right before and after peak season offer the same great weather with smaller crowds and better prices.

• Stay further away from major tourist attractions. You will pay top dollar for a hotel next to the Louvre in Paris. Consider a much cheaper property a few miles away that is close instead to public transportation (excellent, safe and inexpensive in many countries).

• Consider alternative accommodations. Lodging sites like Airbnb and VRBO can be a great option to a traditional hotel stay. Choices range from private rooms to entire homes. Be sure to read reviews from previous guests, and never hesitate to reach out to hosts for more information.

Cruising has never been more popular. According to the Cruise Lines International Association, the 31.5 million passengers who set sail last year will be eclipsed by 35.7 million expected passengers in 2024. Demand is so strong that some smaller operators like SeaDream Yacht Club have already opened bookings for the fall season of 2026.

This high demand coupled with increased operating costs means the days of cheap cruises may be ending. Prices overall for 2024 are up 8% from 2023 and between 17.5% and 22.5% from 2019.

Still, cruises continue to be a great value compared to land-based vacations, since hotel and resort prices have increased 40% to 50% compared to 2019.

• Be flexible. Zeroing in on a specific sailing date and cruise line eliminates all possibilities of finding a better price.

• Book early. Many cruise lines offer their best prices and sometimes extra perks when itineraries first go on sale. Also, you are more likely to get your top choice of cabins and dining times at specialty restaurants.

• Use a travel agent. Agents who specialize in cruises can be a valuable asset. They often have first access to sale prices, and larger agencies sometimes negotiate group space at lower rates, which could save you money on your fare.

Several European cities plagued by overtourism are charging an extra fee to visit. Amsterdam has the highest tourism tax in the EU — 12.5% per night for overnight visitors (average €21.80) and €11 for cruise passengers. Visitors to Barcelona are hit with a regional and city charge. These add up to €6.75 per night for high-end hotels and €6.25 for cruise passengers.

Venice banned cruise ships in 2021. Now, in addition to an overnight tax collected by hotels and Airbnbs, the city has begun using this online portal to charge day trippers €5 to enter the city on specific days.

Let's be honest. These modest fees won't prevent anyone from coming, but they present an opportunity to increase tax revenue for popular destinations whose residents are becoming increasingly fed up with hordes of tourists upending daily life.

The cost to visit two locations in South America has recently doubled. The visa fee for U.S. citizens traveling to Brazil has jumped from $80 to $160, and the entry fee for most nationalities to enjoy the unique wildlife on Ecuador's Galapagos Islands increased from $100 to $200.

Edd and Cynthia Staton write about retirement, expat living and health and wellness. They are authors of three best-selling books and creators of Retirement Reimagined!, an online program to help people considering the retirement option of moving abroad. Visit them at www.eddandcynthia.com. Read More