It’s been more than two years since Americans canceled their summer travel plans due to the coronavirus pandemic and associated lockdowns, but now that people are traveling again, consumers face another challenge: the surge of inflation.
The CEOs of two travel companies told Fox News Digital that while the economic backdrop is changing consumer behavior, demand for summer travel is still incredibly strong.
Priceline CEO Brett Kellers said that while inflation is near 40-year highs, “travel is robust” and this summer is still going to see “a busy travel season.”
He noted that “prices in all categories of travel, whether airfare, hotels, rental cars, etc., have risen so much in recent months that consumers must rethinking the type of journey they are willing to take.”
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“They negotiate their behavior to continue enjoying the trips,” he explained.
Keller provided the insight as the latest inflation data provided by the Department of Labor revealed that inflation cooled on an annual basis for the first time in months in April, but rose more than expected.
The Labor Department said last month that the Consumer Price Index, a broad measure of the price of everyday goods, including gas, groceries and rents, rose 8.3 % in April compared to a year ago, below the 8.5% year-over-year rise recorded in March. Prices jumped 0.3% in the month-long period from March.
Those figures were both higher than the headline figure of 8.1% and the monthly gain of 0.2% predicted by economists at Refinitiv.
According to the data, airline fares rose as more people began to travel with prices climbing 18.6% in the one-month period and 33.3% over the over the past year, marking the largest one-month increase since the report’s inception in 1963.
Consumers hoping to take a road trip this summer face record high gasoline prices.
On Friday, the national average for a gallon of gasoline was $4.76, a new record, according to AAA.
Keller warned that if prices continue to soar over the next few months, “consumers are going to make trade-offs that could involve not doing certain types of trips at all.”
Points Guy founder and CEO Brian Kelly also said he believes “prices will continue to soar throughout the summer”.
He noted that despite the inflationary backdrop, “the consumer is very aggressive when it comes to booking travel and the numbers show it.”
Hayley Berg, chief economist at mobile travel app Hopper, said demand for summer travel is still “strong”, noting that “demand has grown 50% faster since the start of the year compared to compared to the first four months of 2019”.
Berg noted that while prices are higher this summer, over the past three weeks Hopper has seen domestic flight prices stabilize after rising steadily over the past few months.
Domestic airfare currently averages $404 round-trip, up 40% from $288 this time last year and 26% from $322 round-trip in 2019, according to Hopper. , who noted that international airfares are also seeing a 35% increase over the same period. last year and 17% from 2019.
Hotels are currently costing an average of $204 a night nationally, 34% more than the same time last year, the data showed.
Kelly noted that “the number one thing on the minds of consumers is now the cost of travel, not COVID for the first time in two years.”
“People just need to be more savvy,” he added.
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He also said more people are booking all-inclusive vacations this summer “so they can keep at least one aspect of the trip under control” and recommended going where the U.S. dollar is strong as a way to “combat the downturn.” ‘inflation”.
“Now consumers are paying $900 a night for normal hotel rooms in Miami when you can get to Portugal for the same price as a flight to Miami and the US dollar goes a lot further,” Kelly said. .
Hopper noted that summer 2022 travel demand is primarily for domestic destinations, with 65% of bookings going to destinations in the United States, a 16% increase from 2019.
Keller said there had been no hesitation to pay higher prices for flights yet, but warned that “sticker shock” could start to set in.
Regarding car travel, he noted that soaring gasoline prices are “beginning to impact how far people are willing to travel to get to a hotel or destination.”
“We’ve seen the average distance people travel decrease over the past few weeks here due to the impact of gas prices,” he added.
Keller noted that travelers used to drive an average of 175 to 200 miles from home, but now, with rising gas and hotel prices, the average has dropped to around 160 to 170 miles.
“Another trend is that people are lowering the quality of hotels and moving from the higher star category to the lower categories in order to continue making the trip, but not paying the premium necessary to go up to some of these higher class hotels. “, He continued.
According to Keller, summer travel hotspots booked on the platform include Las Vegas and Orlando “because there’s more flight capacity, which means lower airfare prices and there’s a very high hotel capacity… and so consumers can find good deals compared to other markets where prices are higher.”
He also noted that “some of the big cities are starting to see a nice comeback in demand,” including New York, Miami and Chicago.
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He pointed out that internationally, demand for European travel has been strong, particularly to London, Paris, Rome and Barcelona.
“When people are looking for value internationally, they stay closer to home because there’s a lot of value flying to places like Mexico and the Caribbean,” Keller said.
The June 1 data from Expedia sent to Fox News Digital confirms travel trends noted by Keller based on Priceline data.
According to Expedia, the top destinations for summer 2022 are New York, Las Vegas, Los Angeles, Orlando, Cancun, Chicago, Seattle, Denver, Boston and San Francisco in that order.
The Points Guy noted that in today’s inflationary environment, consumers can save by traveling midweek, using Google Flights to get the best deals, and setting alerts to see when airfares drop.
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He stressed that “when you see a good plane ticket, book it right away”, especially because he predicts that “prices will continue to skyrocket throughout the summer”.
On a road trip, Kelly recommended planning where to stop and stock up on gas “based on the cheapest prices,” since prices and taxes vary widely from state to state. ‘other.
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