5 Reasons Why Travel Is Expensive and How We’re Making It Affordable

Ivan here.

We haven’t published a travel post in a while, though we’ve been doing a lot of it this year. In the past seven months, we’ve made eight trips out of Los Angeles: San Diego, San Francisco (twice), Albuquerque (twice), Taipei, New Orleans, and in July, Portland, Oregon for a wedding.


Cost Breakdown of Our Portland, Oregon Trip


 Downtown Portland, Oregon

Downtown Portland, Oregon

Jennie was a bridesmaid for the weekend, so we didn’t get to explore the city as much as we wanted. But we still ended up enjoying ourselves anyway: we had the reception lunch on a boat going down the Willamette river, sampled different food carts downtown, went to an Oregon winery and a Portland Timbers game, and I found a book I’d been looking for at Powell’s Bookstore.

Here’s the full cost breakdown for our 3 day trip:

  • Winery and limo ride for the bride. Split evenly between the bridesmaids: $300

  • Gift registry for the bride: $100

  • 2 nights at an Airbnb: $150

  • Taxes and fees for 2 round-trip tickets (we used the Southwest Companion Pass and paid with points): $25

  • Food + other costs: $200

Which is a total of $775 for a long weekend. Pretty reasonable by American wedding standards (though I’d argue those standards are arbitrary), but it made a significant dent to our $2,800 monthly budget. But fuck it, we knew this was coming and had planned for it. Relationships are more important than hitting a number. At least that’s what Jennie tells me.


Why is Travel So Expensive?


This segues into the topic of this piece: why do so many people think that travel is expensive? Now I’m not going to argue that it isn’t, because obviously, travel involves privilege. What I am going to argue is that most people’s expectations of what travel “should look like” makes things far more expensive than it needs to be.
 

5 Reasons Why Travel Is So Expensive

I can understand why a two-week vacation in Europe costs more than two weeks living at home. But I don’t know why the same vacation to Mexico or Southeast Asia should cost more. That doesn’t make any sense.

Here’s what I suspect:

Traveling isn’t the expensive part - the “vacationing” PArt is.

For some reason, people treat “vacations” as something separate from their everyday life. Whenever I hear the phrase “you’re on vacation. Live a little.” I can’t help but wonder - what does that say about the life that happens before and after the vacation?

Here’s a “vacationer’s” idea of what travel looks like. It goes a long way to explaining why people tend to overestimate the cost of traveling abroad:
 

1. They travel when everyone else is traveling.

Spring and summer breaks, festivals and national holidays are the only times that some people are able to take vacations. To make matters worse, people tend to gather at a few “trendy” Instagrammable destinations. By the laws of supply and demand, this means that businesses there can charge these customers whatever they want.
 

2. They book things impulsively.
 

 Source:   Google

Source: Google

Since fuel prices are way below its peak in 2014, airline tickets are cheaper than they’ve ever been in history. Low cost airlines are now advertising sub $400 round-trip tickets to Europe and Asia. It’s like Black Friday every single day of the week, which makes it harder for travelers to stay disciplined and on-budget. “Amazing deals!” make people forget that flights are only a small fraction of the total cost of their trip.
 

3. They overload their itineraries.

Cramming too many activities into 1-2 weeks is the quickest way to spend the maximum amount of money for the maximum amount of stress. It’s a trap that all beginner travelers fall into. A few years ago, this was us.
 

4. They pay multiples of their rent for accommodations.

The human brain has an uncanny way of putting the same thing into separate mental buckets. Here’s a question: what’s the difference between the nightly rate you pay at a hotel and the nightly rate you pay for your apartment (i.e. your rent divided by 30 days)?

I’d argue that not only do they serve the same purpose, they’re also redundant expenses (whereas food purchased in a foreign currency is a substitute for your grocery budget at home). Yet in practice, people are willing to pay 3-5x multiples for one, but not the other.
 

5. They tailor their trips around other people.

Traveling with friends sounds like a fun idea - in theory. But this assumes that you know your friends as well as you think you do. Jennie and I have been together for almost a decade, and we’re only just starting to get a handle on how the other is going to react under stressful conditions in a foreign country. In our case, we’re fortunate enough to have overlapping travel styles and interests. But if you like hostels and street food and your friend has a taste for boutique hotels and Michelin star restaurants, then brace yourself. And your wallet.
 


5 Ways We’re Making Our RTW Travels More Affordable


A big part of this blog is about making conscious decisions to achieve the things that we want out of life - even if this means taking the slightly unconventional route and thinking differently.

Here are five ways that Jennie and I are making our RTW trip more affordable:
 

1. We’ve mapped out shoulder & off-seasons for every region in the world.

Instead of traveling when everyone else is traveling, we’ve given ourselves the flexibility to go where the herd is thinnest. The trick is to avoid peak season and map out the shoulder and off seasons for every region in the world.  

For example, here are just some of the places we’re thinking about visiting:

  • September/October in Eastern Europe

  • January/February in India

  • May/June in East Africa

  • November in Japan

  • Christmas in Vietnam

When we have a rough idea of where we’ll be throughout the year, it opens up our budget, allowing us to be more spontaneous (and carefree) with our daily decisions.
 

2. We’ve built up a reserve of airline points to avoid paying last minute prices.

The great thing about having a two year plan is that we’ve had a longer runway to visualize our end goal and work backwards. For example, Jennie and I like to travel slow, so we can work off the following assumptions:

  • We’ll be traveling to a new country every 3-4 weeks.

  • Over the course of a year, that’s 10-15 one-way flights

  • We can divide these flights up into three different categories:

    1. Transatlantic flights

    2. Flights between neighboring continents

    3. Short-haul flights within the same continent

For us, it was just a matter of figuring out, on average, how many points does each flight cost? We added them up, multiplied by two - and voila! - that’s the exact number of points we’ve saved up over the past two years.

If everything goes as planned, I don’t expect us to pay out-of-pocket for flights for the first 8-12 months of our RTW trip.
 

3. We’re canceling our lease and reducing our overhead to (near) zero.

Our rent and bills living in our Los Angeles studio adds up to about $1,600/month. With the RTW trip, that drops to $200 per month with our phone bill ($50/month) and global health insurance ($150/month). Every other expense is variable and completely within our control.  
 

4. We’re taking advantage of long term stays to lower our nightly rates.

In most places around the world, we shouldn’t have to pay more to live abroad than to stay at our $1,400/month Los Angeles studio.

To give you an example: in November 2018, Jennie and I are staying in a Kobe, Japan international sharehouse for $1,000 a month (around $33/night - and this includes utilities and wi-fi). We get a private furnished room, with bathroom facilities and a social area. And we actually get to live like locals for a month instead of having to move constantly from place to place.
 

5. We prefer traveling to friends instead of with friends.

Jennie and I have enough trouble agreeing on things between the two of us. As a compromise, we’ve had to divide up our travel days in half (Ivan days and Jennie days) so that we can take turns shutting the hell up and learning to take direction from the other. An additional person requires more compromise, and more compromise can get expensive fast. This is the main reason why we prefer traveling to where our friends already are, rather than bringing an extra set of preferences along.