Post-Pandemic Budgeting Strategies: Vacations and Holidays

Key Takeaways
  • Stay-at-home orders shutdown much of the travel industry throughout 2020.
  • Families wanting to get out of the house stayed close to home, turning to parks and outdoor activities to comply with social distancing guidelines.
  • For most households, travel costs shrunk significantly in 2020.

Grounded flights, closed hotels, and canceled cruises meant most families had to abandon vacations and alter travel plans throughout 2020. Stay-at-home orders issued due to COVID-19 decimated tourism and, with it, the travel industry. Tourism-dependent companies experienced some of the most significant harm as a result of the pandemic.

The cruise industry and amusement parks closed for over a year. Delayed re-openingand limited capacity in 2021 continue to impact how and when consumers can visit their favorite tourist attractions and destinations.

Some businesses adjusted operations by moving services online, offering delivery, or using other means to mitigate the shutdowns. However, online tours of a museum or historic downtown are not the same as visiting in person. You want to go to a destination. To experience the attractions, participate in the local culture, feel the vibe of the destination, and savor the local food.

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Before COVID-19, tourism accounted for 10% of the global economy and 320 million jobs. Experts do not expect a recovery to 2019 levels until 2023.

How the Pandemic Impacted Vacations and Holidays

Due to closures, travel restrictions, and changes in the tourism industry, vacations look different today. You might have postponed all vacation travel for the last year or resorted to short trips close to home. International destinations turned to domestic destinations that avoidedthe airport. Visiting a local or national park was favored over a crowded city. Hiking trails, swimming or canoeing at a local lake, and camping became the go-to travel pursuits.

But weekend getaways, camping, and local parks don’t lead to the same level of spending as longer trips further away.

Less travel in 2020 probably saved you a significant amount of money. Liberal cancellation policies avoided financial losses for most consumers. While credits do not put money back in your pocket, it gives you a chance to reschedulea trip after the economy re-opens. If you currently have travel credits, even 2021 could mean less spending on travel as you use existing travel vouchers.

Budgeting Strategies for Vacations and Travel

As tourism re-opens in 2021, you may want to start traveling right away or ease into trips slowly by sticking to more local sites and attractions. Regardless of how and when you resume travel, it would be best to consider the following factors, when planning your budget.

Look at your overall entertainment budget: Many families shifted travel funds to other entertainment such as streaming services. If you do not cancel or cut back these plans to pre-pandemic levels, you could find there is insufficient funds in the budget for travel.

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Use available travel credits before they expire: Cancelled flights, cruises, and hotel rooms, often grantedvouchers rather than refunds. These credits have expiration dates that give you a limited amount of time to rebook your vacation. Save money by cashing in on any available credits.

Find travel deals: The travel industry faces an uphill battle. Between major losses and a public that remains reluctant to travel, companies now offer incentives to win your business as locations and even countries re-open tourists.Now could be an good time to secure low-cost travel deals,from flights and cruises to hotel rooms and car rentals.

Establish your budget before you book: Before you plan any trip, figure out how much you can afford without going into debt. Consider the total cost of your vacation after adjusting your budget to account for changes in expenses between 2020 and 2021.