Higher Bag Fees and Other Ways You’ll Pay More to Travel This Year

Here's why your vacations are about to get more expensive.
  • Major airlines have increased checked bag fees due to rising fuel and labor costs.
  • Hotel prices will escalate in response to a strong global economy.
  • Trade wars are also setting the stage for travel industry impact.

Although the U.S. economy is booming, trade squabbles continue to rear their ugly heads — and could escalate further trade restrictions across the globe.

Short-term effects of these recent economic events have resulted in increased travel costs throughout the industry. Find out the ways in which you’ll pay more to travel this year.

Click to read more about Trump’s tariffs and what they mean for you.

Airlines Just Increased Bag Fees to Offset Fuel and Labor Costs

Due to the rising fuel and labor costs that are slashing into their bottom lines, airlines are increasing their bag fees to offset those expenses. United and JetBlue were the first to raise their baggage fees in August 2018, increasing them by $5 per checked bag. Now Delta and American are following the trend by increasing the cost of first and second checked bags by $5 each.

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Strong Global Economy Will Drive Up Hotel Prices

The robust state of the global economy will continue to push prices upward, including hotel rates. Increased travel raises the demand for accommodations. Globally, hotel prices are expected to increase 3.7 percent in 2019, according to the fifth annual Global Travel Forecast from Carlson Wagonlit Travel and the Global Business Travel Association. In the U.S., that figure is projected to be 2.7 percent.

Trade War Uncertainty Can Impact the Travel Industry

The U.S. economy is experiencing strong momentum. But rising interest rates, NAFTA uncertainty, and the Canada-U.S. and China-U.S. trade squabbles are setting the stage for an impact on the travel industry. Because business travel and trade are practically synonymous, the impact on air travel is certain, especially for premium seats, according to a report from the International Air Transport Association. The demand for leisure travel would also likely see a decline in response to the negative trickle-down effect of the trade wars on consumer spending, incomes and employment, according to the report.

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Brexit Could Make European Travel More Difficult

Failed Brexit talks could make traveling between the U.K. and European Union more difficult and costly. For example, without a deal, British passport holders will have the same status as someone from North America or Australia. They will have to comply with new travel rules for the Schengen area, which is a borderless area comprised of 26 European states that does not include Bulgaria, Croatia, Cyprus and Romania. British passport holders planning to travel in the Schengen area will need to have had their passports issued within the past nine years and six months on the date of planned travel or apply for a renewal in advance.

See: New $16B Trump Tariffs Mean Pretty Much Everything Could Cost More

Most Consumer Goods Will Cost More Because of Tariffs

President Trump’s recent announcement of tariffs on $200 billion worth of Chinese imports will undoubtedly raise the prices of the 5,745 tariff lines that are included in the U.S.-China tariff list. Consumer goods that will be impacted include various food items, minerals, precious metals, plastics, rubber, wood, machinery and more. To start, all imports will be tagged with a 10-percent duty, with a sharp increase to 25 percent beginning in 2019.

Click to see why Trump’s trade war will make your holidays much more expensive.

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