Massive demand is driving up costs for travelers

(The Hill) — Most Americans are eager to travel this summer, but soaring costs could upend their vacation plans.

Airfares rose nearly 19% from March to April, according to recent Labor Department data, the largest month-over-month increase for airline tickets on record, and rose 33 % compared to last year. Prices for hotels and vacation rentals are also rising, leaving travelers with few options to save money.

These price increases are driven by the massive demand for summer travel. According to data from the US Travel Association, about 90% of US travelers plan to take a trip in the next six months and 35% plan to travel more this summer than last year.

“Prices have little impact on Americans’ summer travel plans, although some travelers are taking fewer or shorter trips or adjusting their travel budgets,” said Tori Emerson Barnes, executive vice president of public affairs and travel group policy.

The global travel and hospitality industry cut millions of jobs at the height of the pandemic as travel slowed. With large numbers of Americans taking trips for the first time since the pandemic began this summer, airlines and hotels often lack the capacity to keep up with demand, driving up prices.

Airline executives predict US airports will process 3 million travelers in a single day for the first time ever this summer. Airfares have skyrocketed in recent months as summer flights have sold out quickly.

High costs may already impose the price on some Americans. The number of domestic flight bookings fell 17% from March to April, according to data from Adobe Digital Insights. Yet last month’s bookings were 5% higher than the same period in 2019.

“An uncertain economic environment is pushing some consumers to reorient their travel plans,” Vivek Pandya, principal analyst at Adobe Digital Insights, said in a note. “We are, however, seeing indications that some have chosen to delay their travel plans rather than cancel them outright. While Memorial Day bookings are down, summer travel is above pre-pandemic levels.

Travel agency Hopper predicted air fares will rise another 6-12% before peaking in June.

Hannah Walden, communications manager at Airlines for America, an industry trade group, noted April prices were still 13% lower than the same month in 2019, before COVID-19 sent prices plummeting. air fares.

Added to airfares are record fuel prices, propelled by the Russian invasion of Ukraine that has pushed up global oil prices. The price of jet fuel has climbed 151% over the past year and 8% over the past month, according to data from S&P Global.

Travelers have fewer seats to choose from than in the years before the pandemic. Major airlines have cut their spring and summer schedules to soften the impact of rising fuel costs and avoid a repeat of the high-profile delays and cancellations that left travelers stranded last year.

For the second quarter, Delta Air Lines and United Airlines reduced their total seat counts by 14% and nearly 17%, respectively, from the same point in 2019, according to travel analytics platform Cirium.

Airlines say they don’t have enough pilots to extend their schedules. At the height of the pandemic, airlines granted early retirements to pilots who never returned to the workforce, despite receiving $54 billion in federal aid to keep workers on the payroll, which, according to the managers, was not enough to cover all the salaries of their employees.

“The pilot shortage for the industry is real, and most airlines simply won’t be able to meet their capacity plans because there simply aren’t enough pilots, at least not for the five coming years and beyond,” United CEO Scott Kirby said. told investors last month.

Sen. Lindsey Graham (RS.C.) is preparing to unveil legislation that would raise the mandatory retirement age for commercial airline pilots by at least two years. Under federal law, pilots must retire at age 65, an age limit that Congress raised from 60 in 2007.

Some members of the airline industry have touted the change as a way to prevent the shortage from getting worse, but they acknowledge it would not impact airline capacity this summer.

Searing inflation seeps into other goods and services that travelers rely on.

Last week’s Department of Labor report found that hotel and motel prices have risen nearly 23% since April 2021. The price of rental cars and trucks has climbed more than 10% annually, the global chip shortage continuing to limit the country’s vehicle supply.

Experts expect both figures to rise further as summer bookings sell out. After a price spike late last month, average hotel rates per night in the United States are up 42% from the same period last year, according to Hopper.

Meanwhile, Airbnb’s average daily rates are 37% more expensive than they were at the same time in 2019 and up 5% from last year, the company’s chief financial officer said. , Dave Stephenson, to investors earlier this month.

“We think that [prices] will likely moderate through the second half of the year as the mix continues to adjust more towards more cross-border cities that have lower average daily rates, but price appreciation has remained high and more sticky,” he said.