As Oil Prices Climb, Can Americans Still Afford to Travel for the Holidays?

There's no place like home for the holidays. Except, trekking home for the festivities is becoming an increasingly expensive proposition. With the holiday season officially kicking off in just a few weeks, Americans are facing some of the highest holiday airfares in a decade. And those considering a road trip instead may find that gasoline prices offer little reprieve.

The cost of both forms of travel has climbed sharply over the past year. New federal figures show that airfare rose more than 22% over the 12 months ending in September, while gasoline prices increased by over 34%.

According to the Bureau of Labor Statistics , those increases far exceeded the overall inflation rate of 3.7%, which places additional pressure on households trying to budget for holiday travel.

The price increases come amid disruptions to global oil supplies tied to the conflict in the Middle East. And while airlines are trying to recover their soaring fuel expenses, drivers are already feeling the effects every time they fill their tanks.

Holiday Airfare Reaches a 10-Year High

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Domestic round-trip flights for Thanksgiving are averaging $402, up $95 from last year, according to a September forecast by Hopper . Christmas flights, meanwhile, are averaging $452, an increase of $85.

Let's crunch those numbers, based on a family of four. Using those figures, they would contend with approximately $1,608 in Thanksgiving airfare alone at the reported average, before accounting for other travel expenses.

Jet fuel is a major expense, putting pressure on ticket prices. According to Reuters , some airlines are responding to rising fuel costs by keeping fares higher, even if that means flying off with more empty seats rather than offering discounts to attract additional passengers.

The pressure begins far beyond the airport, though. In its October energy outlook, the U.S. Energy Information Administration reported that Brent crude oil averaged $114 per barrel in September. Attacks on Middle Eastern oil infrastructure and shipping routes contributed to the increase.

Airlines aren't necessarily passing along every dollar of their higher expenses, but the result is already apparent in ticket prices. And with Thanksgiving approaching, travelers have less time to find an affordable flight.

Driving Isn't Necessarily the Bargain It Used to Be

All right, so flying is expensive. Maybe a family road trip will keep the holiday budget under control instead.

There is a catch.

Switching to a road trip might still save families money, particularly when several people can travel in one vehicle. However,  gasoline is also taking its own sizable bite out of household budgets—less of a nibble and more of a big chomp.

On Oct. 22, AAA reported a national average of $4.27 per gallon. Although prices had fallen six cents during the preceding week, the organization warned that October was on track to become the most expensive October on record for gasoline.

Time to revisit that family of four. Everyone is in one car, so no separate plane seats to pay for. However, they are driving 500 miles to visit relatives, then another 500 miles home. In a vehicle averaging 25 miles per gallon, the 1,000-mile journey would consume approximately 40 gallons of gasoline, costing about $171 at the Oct. 22 national average.

That is still far below four average Thanksgiving plane tickets (although that'll depend on a car's miles per gallon and how far is actually being driven). However, it doesn't account for overnight accommodations, tolls, or other expenses that could make a lengthy drive considerably more expensive.

What's To Come Next?

There may be some relief ahead. The Energy Information Administration expects gasoline prices to decline gradually as crude oil prices ease, although its forecast does not guarantee what drivers will pay during the holidays.

Travelers who do choose to fly may have some room to save by adjusting their schedules. Hopper estimates that returning on the Monday or Tuesday after Thanksgiving instead of Sunday, Nov. 29, could save as much as $250 per round-trip ticket.

Ultimately, the biggest advantage may belong to travelers whose schedules are flexible. With airfare elevated and gasoline still expensive, even when you leave for Thanksgiving could make a substantial difference in what families spend to reunite this holiday season, with peace of mind.

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