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A trip last summer was, in a word, wild. “Revenge” travel combined with recreational restrictions resulted in increased demand. High fuel prices and limited airline capacity have driven up costs, with overall travel costs up 17% from pre-pandemic levels in June 2022, according to the NerdWallet Travel Cost Index.
What about this summer? Will weakening demand lead to lower prices and a thinner population? According to travel experts, this seems unlikely.
“We’re not seeing any dip in demand,” said Hayley Berg, lead economist at travel booking platform Hopper. “It seems surprising that the demand will continue, but we are not seeing any weakness at the moment.”
The Americans’ desire for revenge seems insatiable. And this could lead to another wild ride in the summer.
No relief from high prices.
Prices for flights, car rentals, and hotels may have been high last year, but they haven’t gone down much.
Total travel prices in January 2023 were 15 percent higher than in January 2020, before travel slowed due to the pandemic.
Although it’s unlikely to hit the huge year-over-year gains seen last year, it looks like prices will remain high through the winter.
“We’re not seeing the price increases that we saw last year,” said vice president of research at RDNA, a vacation rental information platform. Demand for Airbnb and Vrbo rentals is still strong, but increased supply has fueled price growth. “Average daily rates during the summer are up 4% year-over-year.
A 4% increase is relatively modest compared to last year’s huge increase in travel prices. On the other hand, the price of air transport may decrease this winter compared to last year.
“We’re expecting domestic airfare to average around $350,” Berg said. This is 10 percent lower than last year, but 10 percent higher than 2019 prices.
Car rental prices have fallen from their absurd heights, but are still 43% higher than before the pandemic, according to the latest data from the US Bureau of Labor Statistics. And meals outside the home (ie, restaurant meals) have seen some steady price increases, now up 23 percent from before the pandemic.
Different booking times
The pandemic may be slowing down, but it has significantly changed the way we travel.
“What we’ve seen consistently is that people are booking more at the last minute,” says Berg. “For domestic flights, it is three to four weeks earlier, which is almost six to eight weeks before the outbreak.
These short booking windows mean we don’t know how high demand summer travel will be until the summer season. It also means that the cost of transportation and accommodation will increase more than usual in the last weeks before departure. Avoiding this last-minute hassle can be a budget-friendly way to plan this year.
Another trend that seems to be continuing this year: Many travelers are choosing to book trips during the shoulder seasons in the summer, late spring, and early fall.
Lane showed above-average interest in the shoulder season last year, and so far the trend has continued this spring.
If we see weak activity in the shoulder seasons like April and May, it starts to show, and we’re not seeing that.
Asia in the spotlight
It’s not just a matter of when travelers book, but where. In the year International destinations that are still closed or restricted in 2022 are experiencing significant growth this year.
The number of U.S. travelers to international destinations in January 2023 increased by 75 percent compared to January 2022 and January 2019, an increase of 8 percent. It is the biggest change in travel to Asia, which has seen an impressive 380% growth between January 2022 and January 2023. It’s a change that looks set to accelerate into winter, experts say.
“Asia is one of the hottest regions right now,” says Berg. “The challenge there is that supply, direct flights from the US have not returned to pre-pandemic levels.”
So while a long-delayed summer trip to Japan might sound tempting, it can come with a hefty price tag.
Big questions remain
In addition to adjusting budgets to accommodate changes in travel costs, travelers can look to other money-related issues heading into the summer. With the prospect of layoffs growing and government data showing pandemic savings are shrinking and consumers piling on credit card debt, it seems a matter of when, not when, the ride will begin to slow.
Will travelers hit the brakes on spending this spring, leading to thinner crowds and lower prices come winter? Or will they continue to seek their revenge at all costs, leading to another summer of travel fare?
Regardless, savvy vacationers can avoid booking at the last minute, especially for popular summer getaway destinations. And skipping Asia, at least until more airlines become available, will help them avoid some of the steep airfares.
Also: remember to pack some snacks – restaurant food is expensive.
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