Exercising your wanderlust could be easier than ever this year. Although most Americans tend to plan summer vacations that are close to home, venturing abroad has become more accessible as international flights just keep getting cheaper.
According to the most recent data from the National Travel and Tourism Office, only 25 million U.S. citizens vacationed overseas in 2014, accounting for less than 3 percent of leisure trips taken by Americans. Those who did travel overseas were slightly older, with an average age of 45. The typical international traveler spent $1,198 on airfare and shelled out $88 a day while on their overseas trip.
For younger Americans — those aged between 18 and 34 — this may be the year of their next big adventure. Younger travelers are more likely to view themselves as travel hackers, navigating rewards programs and travel sites to score the best deals. Nearly three out of four millennials say they will travel more this year than last year, and 65 percent say they are planning to visit a bucket list destination, according to a recent survey from the travel planning site Hipmunk.
They’ve got the right idea. Peak summer airfares will be 9 percent lower this year than they were in 2015, which was already a good year for airfare prices, according to the most recent Consumer Airfare Index from the airfare prediction app Hopper.
“If you’re planning that once-in-a-lifetime trip to Europe, or wherever it might be, this is a great time to do it,” said Patrick Surry, Hopper's chief data scientist. According to Surry, it’s not too late to book summer travel plans. Prices begin to climb in May, so now is the time to finalize an upcoming trip. “If you can be flexible on your days and on your destination, you can still find amazing deals.”
Many factors are working in favor of American travelers right now. Here’s why prices are low, and how you can make the most of the good deals for your vacation this year.
1. A stronger U.S. dollar means more bang for your buck. One of the biggest reasons to travel internationally now is that the U.S. dollar has been, and continues to be, very strong against other world currencies. “The exchange rate is in your favor, so you’re going to have a lot more money to spend when you get there,” said Surry.
Europe is the most common destination for Americans traveling abroad, accounting for 36 percent of international leisure travel in 2014. The dollar is particularly strong against the euro, making now a great time to visit popular destinations such as Paris or Rome. But the euro isn’t the only currency that has declined against the U.S. dollar recently. European countries that don’t use the euro — such as Norway, Denmark and Sweden — are good budget destinations as well.
For Americans looking to stretch their dollars as far as possible, Brazil, South Africa and Mexico have seen steep declines in their respective currencies over the past few years, making now an especially good time to visit. Although not cheap, New Zealand and Australia have also experienced currency declines, making them a better value now than they have been in the past.
2. Increased competition from low-cost carriers. Budget airlines like Southwest and Spirit have become increasingly popular, and their low fares have forced major carriers like United and Delta to drop their prices as well. This competitive environment isn’t likely to last through the next economic downturn, so travelers would do well to take advantage of it now.
Low-cost carriers come in particularly handy when you’re traveling within the same country, or to nearby destinations. European budget airlines like EasyJet or Norwegian Air regularly offer round-trip deals for less than $100, so you can fly into one city and visit a few others while you’re there.
Strategic planning can save you on a transatlantic flight as well. “If you want to go to Italy, you can often fly to Milan for super cheap from New York, whereas going to Rome is really expensive,” said Surry. Choose the less expensive city as the destination for the international leg of your itinerary, and then book separate tickets to get around once you’re there. Just make sure you do your due diligence before booking with a low-cost carrier. “They advertise a low ticket price, but you have to pay extra for any additional service that you want,” he added.
3. Fewer empty seats lead to a lower price per traveler. Airlines have gotten very good at predicting how many planes they need for a given route, so they can maximize flight capacity by selling as many seats as possible. This allows companies to sell tickets at a lower price per passenger while still meeting their revenue targets.
As booking has become more efficient, pricing has become more automated. Other than the occasional flash sale, prices are largely set by software, rather than people. That changes the game for bargain hunters.
“A lot of the pricing is managed by computers. Most of the time you’re just trying to outguess a computer and you’re not going to win,” said Surry. Common wisdom used to say that Tuesday or Wednesday were the best days to buy tickets, but that’s no longer true. Your best bet is to fly on a less popular day. When searching for airfare, use the calendar view to see if you can find a cheap flight that works with your travel plans.
4. Cheaper oil keeps operating costs down. One of the biggest expenses for airlines is the cost of fuel, which is directly related to the price of oil. Just as consumers have saved money on the cost of gas in recent years, airlines have benefited as well.
“The industry consensus is that about a third of the operating costs for an airline are due to fuel prices,” said Surry. Airlines have also replaced older planes with newer, more fuel-efficient planes, further reducing the costs associated with flying. With oil prices so low right now, it might make sense to travel further abroad.
For popular destinations where competition is high, those fuel cost savings have been passed onto travelers. In some cases, airfares have fallen as much as 15 to 20 percent. Brazil, South Africa and Chile have seen the large declines in the cost of a round-trip airfare from the U.S., according to Hopper.
5. Increased global uncertainty reduces travel demand. Your mom may not want you to visit certain countries right now, and the U.S. government agrees. In March, the State Department updated its Worldwide Caution, warning about the potential for terrorist activity in parts of Europe, Asia, Africa and the Middle East. The CDC has also issued travel advisories for parts of Central and South America, as public health concerns about the Zika virus continue to weigh heavily on the region.
It’s important to heed these warnings, but that doesn’t mean you have to stay home. “From a statistical point of view, there’s still a very low risk of anything happening. Obviously, there are still a lot of people traveling every day, and there are lots of people living their lives happily there, day in and day out,” said Surry. “As long as you’re careful and you understand the risks you can make the decision that’s right for you.”
Despite those valid concerns, the world is a big place. If you have the cash, there’s no better time to use up some vacation days than now. “Maybe you’ll get the same deal next year, but I don’t think you’ll get a better one,” said Surry.