Close to half of Americans are planning to spend on holiday travel, with many charging travel expenses to a credit card. And while they’re taking steps to save money on these costs, they could avoid credit card interest as well by starting to save earlier.
Almost half of Americans (45%) – an estimated 114 million U.S. adults – plan to spend money on flights and/or hotels this holiday season. How much money? On average, they’re shelling out $1,393 for those 2019 holiday travel expenses. This is more than $159 billion across the country, according to a new NerdWallet analysis.
In a recent online survey of more than 2,000 U.S. adults – among whom 892 plan to spend money on flights/hotels this holiday season – commissioned by NerdWallet and conducted by The Harris Poll, we asked Americans how much they’re spending on holiday travel, how much they’re putting on their credit cards and how they plan to save money on their holiday travel.
Key findings
- Americans are charging billions to their credit cards: Americans who plan to put their 2019 holiday travel expenses (costs associated with flights/hotels) on a credit card plan to charge $1,105, on average. That’s about $89.8 billion total credit card spending on travel this holiday season.
- Travelers are being proactive about saving on their trips: More than 9 in 10 holiday travelers (91%) — Americans who plan to spend money on flights/hotels for 2019 holiday travel — are taking action to save money on those travel expenses. Many are opting for price over convenience when choosing flights (39%), or over amenities when choosing a hotel/motel (38%). Others are using credit card points/miles (32%) and staying with family/friends instead of booking a hotel/motel (29%).
- Traveling with family adds up: More than 7 in 10 Americans who plan to spend money on flights/hotels for 2019 holiday travel (72%) are traveling with their significant other and/or children. Those travelers say they’re paying for 3.4 round-trip flight tickets and 5.1 nights of hotel stays, on average, which we estimate will cost them between $1,633 and $1,916, depending on their travel dates, based on NerdWallet analysis.
Americans charging travel expenses, not saving early enough
About a third of Americans (32%) plan to put 2019 holiday travel expenses on a credit card. Those travelers are planning to charge $1,105 for 2019 holiday travel expenses, on average, for a total of close to $90 billion across the nation. While this is less than last year’s projected credit card spending of $135.8 billion, it’s still a lot of money to charge, particularly for those who don’t plan to pay off their balances right away.
Using a credit card for travel expenses is a great way to rack up rewards and activate travel perks. However, these benefits are only worth it for consumers who avoid interest, which doesn’t seem to be the case for everyone charging these expenses to their card.
Fewer than 1 in 5 Americans who plan to put 2019 holiday travel expenses on a credit card (18%) think they’ll be able to pay off the balance with the first statement. On average, Americans charging 2019 holiday travel expenses think it will take them 2.4 months to pay off the balances. According to NerdWallet’s analysis of average interest rates, this will cost them about $27 in interest each, or a total of almost $2.2 billion for holiday travelers.
Saving fewer than 10 weeks ahead of holiday travel
Most Americans save for their holiday travel plans, but they could benefit more by putting cash away earlier. While about 7 in 10 Americans who travel for the holidays (69%) save for holiday travel expenses in advance, around a quarter (24%) typically start saving five weeks or less in advance of their travel date. On average, Americans who travel for the holidays say they typically start saving 9.4 weeks before their holiday travel.
"Between travel and buying gifts, the holiday season is expensive. Five weeks simply may not be sufficient time to save enough to avoid getting into credit card debt," says NerdWallet travel expert Sara Rathner. "To avoid pricey last-minute fares, you'll want to book flights at least three weeks before you travel, but during the busy holiday season, booking even earlier than that is a good idea."
Starting to save earlier may be the key to avoid going over budget. Nearly two-thirds of Americans who spent money on flights/hotels during the 2018 holiday season (65%) say they spent more than they planned to, with some taking cash from their savings (17%) or using their credit card (27%) to cover the additional costs. About 1 in 12 Americans who put 2018 holiday travel expenses on a credit card (8%) still haven’t paid off their balance.
Americans are taking action to save on holiday travel
A large majority of Americans who plan to spend money on flights/hotels for 2019 holiday travel (91%) are being proactive about saving money on these expenses. About 2 in 5 (39%) are choosing a flight based on price instead of convenience, and around the same proportion (38%) are choosing a hotel/motel based on price instead of amenities.
Not all Americans want to rack up the costs associated with traveling during the busy holiday season. More than half of Americans (51%) would rather skip traveling to see family for the holidays and wait to visit during the summer when flights/hotels are cheaper. And more than 2 in 5 Americans (44%) say they wouldn’t buy friends and family holiday gifts if they were spending a lot on holiday travel expenses to visit them.
Traveling with family multiplies the holiday costs
Having children is expensive day-to-day, but the costs really add up for parents who plan to fly with their kids during the holiday season. Close to three-quarters of Americans who plan to spend money on flights/hotels this holiday season (72%) will be traveling with their significant other and/or children. Those traveling with their significant other/children will be purchasing 3.4 round-trip flight tickets and 5.1 nights of hotel stays, on average.
According to our analysis of Hopper and STR data, a family traveling for Thanksgiving would pay an estimated $1,633 on their holiday travel assuming they were covering 3.4 round-trip flights and 5.1 nights of hotel stays. During Christmastime, these expenses would add up to an estimated $1,916.
Parents of children under 18 are taking action to save money on their holiday travel. They’re more likely to choose price over hotel amenities (44%) than those who aren’t parents to kids under 18 (33%).
Parents of children under 18 are also more likely than Americans who are not parents to kids under 18 to prefer traveling to see family during a cheaper time of the year or bringing their family to them. More than half of Americans who are parents of children under 18 (56%) say they’d rather skip traveling to see family during the holidays and wait to see them during the summer for a cheaper flight/hotel, compared to 48% of those who are not parents of kids under 18.
Close to half of parents of children under 18 (48%) say they’d rather pay to have other family members fly out to visit them during the holidays than vice versa. That may be more cost-effective, especially for those with multiple children. Fewer than 2 in 5 Americans who are not parents of children under 18 (38%) say the same.
What you can do this holiday season
Save earlier, avoid debt. More than 2 in 5 Americans (44%) would rather go into debt paying for holiday travel than skip seeing their family during the holidays. Instead, these consumers could plan to start saving earlier for their travel and other holiday expenses, so they can enjoy visiting family without stressing about footing the bill when they get home.
It’s basic advice, but it’s worth saying: Save for one-off expenses throughout the year. Whether it’s holiday expenses, like travel and gifts, or those expenses that pop up once or twice a year, like basic car maintenance or your pet’s checkup, it’s a good idea to add up your anticipated annual costs and save for them throughout the year.
“With some planning, you won’t have to choose between avoiding credit card debt and spending time with your family,” says Rathner. “It’s important to think about one-off expenses like holiday travel throughout the year so you’ll have the savings available when it’s time to book your flights and hotel.”
Prioritize, prioritize, prioritize. It’s not always financially realistic to travel to see family and buy them extravagant gifts, so it’s important to prioritize what’s most important to you. If you love showering your family and friends with presents, it might make sense to ship the gifts and visit during a cheaper time of the year. Or maybe you can limit gift-giving to just the children in the family or not do gifts at all, and prioritize paying for travel so you can spend time with your loved ones. Figure out how much you feel comfortable spending on the holidays and decide how you want to spend it.
Reevaluate rewards. Around a third of Americans who plan to spend money on flights/hotels for holiday travel this year (32%) say they will use credit card points/miles to cover their expenses. This may be a good plan for those who travel only during the holiday season, but it may not be the most value-efficient way to use these rewards.
“In terms of value per point, you won’t get the most bang for your buck with peak-season domestic travel. If you have an overseas trip planned for next year, that may be the better place to apply your points and miles, while you use cash savings to pay for holiday travel,” says Rathner. “But if your one big trip of the year is flying your family across the country for Christmas, then use those points. It’s always better to cash them in for something important to you than save them forever in hopes of planning the ‘perfect’ trip.”
This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Sept. 17-19, 2019, among 2,050 U.S. adults ages 18 and older, among whom 892 plan to spend money on flights and/or hotel stays during the 2019 holiday season. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Mauricio Guitron at mguitron@nerdwallet.com. The 2019 holiday season is defined as Nov. 21, 2019, to Jan. 5, 2020, for the purposes of this study.
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
