5 things that will cost you more in 2016 (and 3 that won’t)
By Catey Hill
Published: Jan 12, 2016
Hotels
Hotel prices around the globe are poised to rise this year, several research firms reveal. Hotels in the Asia Pacific region will rise an estimated 3%, in Europe roughly 1.8%, in Latin America 3.7% and in North America 4.3%, according to the 2016 Global Travel Price Outlook, an annual research report from the Global Business Travel Association and travel management company Carlson Wagonlit Travel.
“Globally, 2016 will show an increase in hotel prices because demand is overtaking supply in every major global region,” the report reveals. And the American Express Global Business Forecast 2016 report notes that “limited increases in inventory [will] fail to keep pace with the growing global appetite for travel,” resulting in higher prices.
Even with typically steeper prices, there are still deals to be had, especially since consumers increasingly have options from hotel alternatives like Airbnb and VRBO, and consumers savings expert Andrea Woroch says there are plenty of deals using coupon codes you can find online.
Health insurance
For many Americans, health care premiums will cost more this year than last, according to a government report released in October. The price for the government’s silver plan (this is a mid-range option that is often used as a benchmark plan) in 2016 will rise by 7.5% on average in the 37 states using Healthcare.gov last year, though most consumers (those who live in the 30 largest markets and represent roughly 60% of total enrollment) will see increases of 6.3%. That’s compared with 5% in 2015.
This does not factor in tax credits, which can offset the cost, and for many consumers the plans will still be affordable: “For most consumers, premium increases for 2016 are in the single digits and they will be able to find plans for less than $100 a month,” said Kevin Counihan, chief executive of the Health Insurance Marketplaces, in a statement released in October.
What’s more, those with employer-sponsored plans may also have noticed higher premiums. Aon Hewitt says that average premium hikes this year will be more than 4%.
Groceries
Grocery prices will rise between 2% and 3% this year, according to the United States Department of Agriculture — and that’s assuming normal weather patterns. “Severe weather or other unforeseen events could potentially drive up food prices beyond the current forecasts,” they admit; some experts contend that El Niño could have caused the prices of a range of crops to rise significantly.
On the plus side, for many products, consumers may have already felt the most dramatic of the price increases (at least for the time being). The prices consumers paid for beef and veal will have risen between 6.75% and 7.75% once the final numbers are calculated for 2015, the government predicts; meanwhile, they are only expected to rise to about 2% in 2016. The price of eggs — due primarily to an avian flu outbreak — rose between about 16.75% and 17.75% in 2015, but will probably only rise up to about 1% in 2016.
On a side note, you may even pay more for your Girl Scout cookies in some areas of the country this year, with prices rising 25% to $5 per box. The organization says this is a move to help it offset price increases on everything from raw materials to transportation and so that it can raise more money (troops will now take in an average of 90 cents per box, up from 62 cents).
Netflix subscription
Americans who are hoping to cut the cord this year will likely still save money over their hefty cable bills, which can easily top $100 a month, but they should take note of this: Netflix (NFLX) is raising its prices for new subscribers. The price increase is $1 a month (to $9.99 a month for new subscribers of its standard plan — which gives you the ability to watch TV and movies on two devices simultaneously — in the U.S., Canada and parts of Latin America), and is the second increase in less than two years (the last — another $1 a month increase — was announced in 2014). (Current subscribers get a grace period before their rates go up; some accounts say that the period ends this May.)
Now this $1 increase is a small increase (only an extra $12 per year), and many consumers can appreciate Netflix’s rationale in doing so: “To continue adding more TV shows and movies including many Netflix original titles, we are modestly raising the price for some new members in the U.S., Canada and Latin America,” a Netflix rep wrote in an emailed statement at the time of the announcement.
College
For the first part of the 2016 school year, the average cost to attend college (this includes tuition and fees) at a public four-year in-state school will rise 2.9% as compared with a year prior to $9,410 a year; those hoping to attend a private nonprofit four-year institution should prepare for even heftier hikes (3.6% to $32,405), according to the College Board. The costs for room and board are up more 3% in both cases.
This follows a decades-long trend of increased tuition costs: Over the past five years alone, the tuition and fees at public four-year schools have jumped 13% and at private nonprofit four-year schools 10%. Meanwhile, the average student with debt now graduates with more than $30,000 in debt.
However, most students still do not pay the sticker price for college. Roughly two-thirds of full-time undergrads received grants to help offset the cost of college, according to the College Board.
Housing
Whether you’re planning to buy or sign a lease, prepare to pay more: Though home price appreciation is slowing, experts say there’s still more growth to come. Realtor.com predicts that home prices will rise roughly 3% in 2016, as do other experts. (Realtor.com and MarketWatch are both subsidiaries of News Corp.)
Meanwhile, Rent.com predicts that rental rates could rise 8% over the year, thanks to increased demand for apartments and homes and low inventory. “Rising rents won’t let up in 2016, and will continue to set new records,” Zillow notes in its 2016 Housing Market Predictions report. “The next year will bring the least affordable median rents ever.”
Airfare
On the flip side, you may pay less for some things this year — especially if you’re savvy about when to buy them. Consider: In January 2016, airfare will “bottom out…at a historical three-year low of about $210 per round-trip,” airfare research firm Hopper reveals; that’s 14.2% lower than airfares were in January of 2015. Some of the destinations that may have especially large drops include Honolulu, Miami, New Orleans, Las Vegas and Houston, the firm notes.
Airfares will likely rise from those lows after this month, thanks in part to seasonal variation. But some sources predict that they won’t be much (if any) above last year’s rates when they do. “Airline prices are set to be nearly flat on a global basis due to significantly lower energy prices, a steady increase in capacity and stable demand,” the 2016 Global Travel Price Outlook reveals.
Winter clothes
Savings expert Woroch says that winter clothing is likely to be a particularly good deal this year as compared with past years, thanks to a “mild start to the winter and warmer than usual temperatures” along the East Coast. This has led to a lot of unsold inventory in many stores (data from Planalytics, a weather intelligence firm, notes that sales of boots, hats, gloves and scarves are all down, and that stores have lost millions thanks to this warm weather), which will very likely get discounted deeply, she says.
Retailers admit that the weather is hurting their sales. After reporting sales declines, Art Peck, the CEO of Gap Inc.GPS, -0.93% , told investors “Not to make excuses, but October was the warmest October ever…and we’re still seeing the temperatures in the Northeast stay pretty warm, which obviously means people aren’t ready to buy into sweaters and outerwear.” And Macy’s M, -2.60% CEO Terry Lundgren says the store has a “buildup in inventory” of some winter items.
“2016 is going to have particularly deep discounts on cold weather clothing, as this inventory sold so poorly earlier in the season,” says Benjamin Glaser, the features editor at DealNews. In the first 11 days of the year, we’ve already seen a 64% increase year-over-year in the number of deals on coats.”
Gas
Helped in part by significant drops in oil prices, gas prices were low in 2015, and some experts think they will be even lower — at least in some months — in 2016. The U.S. Energy Information Administration projects that while gas prices averaged $2.43 per gallon in 2015, they will average just $2.36 per gallon in 2016.
While the prices for December 2015 and January 2016 are projected to be the same ($2.04 per gallon) and the lowest in both 2015 and 2016, summer travelers can take heart in the fact that their road trips may be less expensive this year. Prices for gas in June, July and August 2016 are projected to hit $2.56, $2.56 and $2.54 per gallon, respectively, compared with $2.80, $2.79, $2.64 over the same months last year.
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