How could inflation raise average travel costs in 2023?

Travel costs are rising at an alarming rate as global inflation is fueled by a series of follow-on events such as the COVID-19 pandemic, supply chain disruptions and the Ukraine-Russia war. Inflation in Singapore jumped from 0.44% in 2018 to 6.12% in 2022.

Unfortunately, this inflation shows no signs of slowing down in 2023 and will continue to affect average travel costs.

If you love to travel, this article will reveal travel expenses affected by global inflation and share some tips for offsetting them with the best travel credit cards in Singapore.

Related: 3 ways to save money amid rising inflation in Singapore

What is included in the travel fee

In general, there are four key categories that have a significant impact on average travel costs: airfare, accommodation, transportation and food. If you’ve traveled internationally recently, you may have noticed that these items have become more affordable than they were before 2019.

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air ticket price

A recent study of the Asia-Pacific market found that since 2019, international airfares have increased by 50% and domestic flights by 10%. Higher fuel prices and rapid inflation were cited as the main reasons for the increase, but the phenomenon of “retaliatory travel” by airlines looking to take advantage of the opportunity to cover losses incurred during travel lockdowns may be a stronger reason for the price surge .

If rising airfares have been a headache for you, being more flexible about travel dates and time of year can make a huge financial difference. Try to avoid traveling during high season or on Fridays or Sundays as these times are the most popular and therefore more expensive. Flights with fewer passengers tend to be cheaper during the week.

Related: Best Airline Rewards Programs in Singapore 2023

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dormitory

Hotel accommodation prices may fall sharply in 2020, but hotel accommodation prices have rebounded by more than 50% in the US, 70% in Thailand, and 40% in Singapore. Hotel prices are on the rise worldwide, adding to your travel expenses no matter where you plan to travel next. Your best bet for lowering your average cost of travel may be to look in the market for more affordable accommodation, such as private homestays, bed and breakfasts, or co-living spaces.

To ensure a smooth trip, be sure to purchase best travel insurance for singapore This protects you from any unexpected travel issues that could have financial consequences. A good travel policy can help you cover a lot if you lose your luggage or have to cancel your stay for unforeseen reasons during your stay overseas.

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transportation

Whether you prefer to rent a car or take public transport for sightseeing when you travel, be prepared to spend at least 6.8% more on transportation costs.

Price fluctuations are affected by various factors. For example, Japan Railways (JR) cited the yen’s depreciation against other currencies and rising energy costs as the main reasons for raising JR pass prices by 60% to 77% from October 2023. Even Seoul officials have announced fare increases for subways and buses starting in August to offset a growing deficit in the city’s subway services.

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food

A quick glance at the Food and Agriculture Organization of the United Nations (FAO) food price index shows that prices were slightly softer in June, but the exponential growth of the past few years has been out of the comfort zone.

Even Singaporean hawker prices, notoriously affordable to locals and foreigners alike, saw their first rise in 40 years. Of course, you’re likely to pay more when you travel abroad, as global food suppliers and restaurateurs face the same challenges as they try to deal with rising rent and ingredient prices in 2023 and beyond.

Related: How to Save on Food Costs in Singapore During a Time of Inflation

How to Offset Travel Expenses with the Right Credit Card

Want to be a savvy traveler who can enjoy traveling the world while keeping your globetrotting experience on a budget?use Best Singapore Travel Credit Card Paying for travel can help you earn tons of frequent flyer miles, hotel awards, and even special perks like free airport transfers or travel insurance.

DBS Highland Visa

The DBS Altitude Visa offers additional travel benefits such as free lounge access and up to 10 miles per dollar (MPD) spent. Suitable for those who spend up to S$25,000 per year using the card.

overall reward

Citi MasterCard Credit Card

	Unlimited lounge access, free travel insurance and award hotel nights Promotions: Read our full review

This is for frequent travelers who don’t mind paying more in annual fees in exchange for exclusive travel perks such as free travel insurance, free hotel nights and free golf at prestigious golf courses. Cardholders also get free access to hundreds of Priority Pass airport lounges, eight complimentary one-way airport limousine transfers and 24/7 Citi Prestige concierge services.

overall reward

Maybank Horizon Card

This is an airline miles card with a generous annual fee waiver and MPD redemption. It’s also a rare entry-level card with free travel insurance. If you are driving in Singapore, you will prefer this card as cardholders are eligible for a 26.45% discount at Caltex stations.

overall reward

For more information on the best credit cards to use when traveling, check out our roundup of the best credit cards in Singapore for various spending categories.

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