River cruises in Europe are popular again with House of Travel clients. Photo / Supplied
The rising cost of living and the return of inflation is hitting Kiwis hard. In a new Herald series, Inflation Nation, we explore the reasons and impacts of the price shock - and possible solutions. We also share some great life hacks on how you can save money and live more affordably.
House of Travel chief executive Bruce Parton reckons there are great deals for Kiwis starved of overseas travel - if they know where to look and when to act.
Parton, who held top roles at Air New Zealand during a 22-year career with the airline, says the trick is making any looming prices a problem for somebody else - most likely airlines.
His last role at the airline was chief operating officer, so he knows the impact of soaring fuel costs.
"It is definitely an issue but if you get in quick and book your deal then suddenly the fuel price is the airline's issue, not yours."
He said that after two years of booking only a trickle of domestic travel, consultants were busy booking Australian and Pacific holidays where there were some great deals, and also river cruising in Europe. There were still return flights available to Europe on top airlines such as Qatar for less than $1700.
"There are never-to-be-repeated deals. And that's really encouraging."
Travel agents were among those hit hardest by the pandemic but were now more critical than ever in finding good deals and helping travellers in a more complex travel environment, said Parton.
"It's become harder for people to do self-service or find the deals now because they're not so easy and apparent. So for the travel agent, the world's never looked better because of the value they bring."
He said that travellers needed to focus on holiday plans now.
"You need to work out what you want to do over the next 12 months and start booking now - that would be my advice to customers."
The return of airlines to the New Zealand market would keep a lid on prices as they competed to fill planes. Already, Qantas has announced a return to the Tasman, Air Canada has announced that it will resume summer services at the end of the year, and Air New Zealand will next week announce details of its non-stop flights to New York, starting towards the end of the year.
"In general we've seen a shortage of air fares but we're starting to see that change now," said Parton.
Westpac economist Nathan Penny says airline capacity is crucial to taking the heat out of inflationary pressure.
"We anticipate that airlines will be quite responsive to lifting demand, adding to capacity as demand recovers. As this capacity is added, the cost of flights will come down as airlines spread their fixed costs over a larger number of planes/passengers," he said.
"Moreover, we anticipate that demand has pent up over the last two years or so, supported by the fact that many households have also increased their savings over the Covid years."
While travel is highly discretionary, Penny says it is being hit by inflation along much the same lines as other industries.
"On this basis we wouldn't expect a material change in consumption patterns away from travel."
For Kiwi travellers the exchange rate can be critical. Although they may notice some on-ground costs have gone up overseas, their dollar is buying roughly the same in key currencies as it was when the pandemic hit.
And there are still bargains to be had if you know where to look. One seasoned traveller who is in Hawaii told the Business Herald you can still get a beer on the ground floor at Waikīkī's International Market Place during happy hour for $US2 - just $2.92.