Acquisition Change
— Rashad Jordan
Travelers planning to hit the road this summer are likely to notice that the price of travel has become more expensive – in some cases, so expensive that many have decided to change their planned trips. So why are hotel rates and airfares up from 2019 levels?
We turned to Ash Shift, our artificial intelligence chatbot, for answers to questions. Ask Skift used information found in our daily news stories, Skift Research and Airline Weekly. Here are the answers Ask Skift provided as well as more information we found about the reasons travel is becoming more expensive.
Growing Travel Needs
Ask Skift said:
Travel has become more expensive due to a combination of factors. There is strong demand for travel as people are eager to make up for time lost during the pandemic. As easyJet CEO Johan Lundgren said in May 2023, “Travel is the only cost people are willing to maintain or increase,” indicating a high consumer desire for travel experiences. of things.
The desire for travel, which grew during the pandemic, remains strong. This increase in demand has led to an increase in travel rates, with costs now higher than before the pandemic.
What else you need to know:
Skift Research revealed in its US Travel Tracker: Q1 2023 Highlights report that while nearly 70% of US travelers surveyed experienced higher travel prices while booking their personal trips, about 5 Only % of respondents said they would cut their travel expenses.
Spending by overseas visitors to the US also surged. International inbound travelers spent nearly $16.8 billion on travel to, and tourism-related activities within, the US in March 2023 — a 49% year-over-year increase.
As for consumers’ willingness to spend more on travel, travel organization AAA found that even travelers are paying between 40% and 50% more for trips this summer compared to last year, bookings did not slow down. Indeed, the TSA screened more than 2.8 million passengers on June 30the most in one day.
The high demand for sky travel is one of the reasons that air fares to and across Europe have increased between 15% and 50% for trips this summer. Italian Business Minister Adolfo Urso called on Italian airlines earlier this month for hiking fares in response to the country’s travel boom, increases he argued were not “justified.” even with inflation.”
Inflation
Ask Skift said:
In addition, economic uncertainty and inflation have affected the cost of travel. A survey by the European Travel Commission in July 2023 highlighted that 24% of European travelers are concerned about the general increase in travel costs, leading many to seek cheaper experiences or consider off -peak travel. Similarly, a survey by The Vacationer in June 2023 found that nearly 64% of US travelers said that rising prices had affected their travel plans.
What else you need to know:
Senior Hospitality Editor Sean O’Neill wrote last month that the hotel sector has seen significant spikes in nightly rates compared to post-pandemic lows, “as increased demand collides with reduced supply from properties struggling to find and retain workers.”
US hotel rates rose 1.8% in May 2023 from the previous month, according to the US Bureau of Labor Statistics. The rates this May are also higher by 3% from the same month last year.
Travelers have seen an increase in hotel prices as the cost of operating hotels has increased. Senior Research Analyst Seth Borko reports everything from fuel and heating to wages, to food costs, to laundry supplies are getting more expensive.
“Inflation data suggests that most hoteliers are raising their prices to keep up with their rising costs,” he wrote.
However, the US Department of Labor’s monthly Consumer Price Index report for June revealed that inflation rose only 3%, the lowest level since March 2021. 18.9% compared to June 2022.
Rising Operating Costs of Airlines
Ask Skift said:
One reason is the increase in operating costs for airlines due to changes in travel patterns after the pandemic. As airlines adjust to the “new normal” by cutting flights, changing networks, and increasing passenger capacity, these changes lead to increased operating costs and affected income.
What else you need to know:
American Airlines and United Airlines cut flights this spring due to an ongoing pilot shortage, an issue that has hit regional US carriers hard, as well as delays in aircraft deliveries. Edward Russell, editor of Skift’s publication Airline Weekly, reports that the difficulties – as well as the continued lack of air traffic control in the industry – have translated into a market where the demand for travel exceeds the supply of those. seats and fares that continue to rise.
American and United — as well as Delta Air Lines and JetBlue Airways — said earlier this year that a lack of air traffic controllers was the reason they were all cutting flights to the New York City area this summer. The Federal Aviation Administration admitted in March that it expects air traffic controller staffing to be only about 54% of the required level in the region.
Photo Credit: The rising cost of travel has become a source of frustration for many.
