Are Airline Ticket Prices Affecting Travel Trends?
The rapid increase in the prices of airfare and gasoline has sparked concern about whether Americans will continue to travel. In May, the consumer price index was 130% higher for gasoline and 73% higher for airfare than it was during May of 2020. Airfare in particular has risen sharply since the beginning of the year due to high demand, smaller fleets, increased cost of jet fuel, and staffing challenges. Domestic air travel within the United States is about 50% more expensive than it was last summer and 25% higher than it was in 2019. Lodging nightly rates are also considerably higher than last year. Despite the increasing cost of travel, consumers are willing to pay due to pent-up demand and higher household savings rates during the pandemic. Between June 10 and June 16, TSA checkpoint volumes were only 11% below 2019.
Top of mind is whether increasing prices will negatively impact demand for vacation rentals. So far, the answer seems to be “not yet.” There is almost no correlation between the number of new guest reservations being made per active vacation rental unit and the price indexes for gasoline and airline fares. Despite price increases, reservation activity for the last few months has followed trends similar to 2019 and 2021, reflecting the current price insensitivity of travelers. The slowdown in new booking activity during the summer is normal - it’s the peak travel season rather than the peak booking season - and doesn’t appear to be driven by increasing costs.
领英推荐
The rising cost of air travel is especially concerning to destinations to which many guests fly. In markets like Hawaii; Orlando, FL; and Washington, D.C.; vacation rental reservation activity has remained on a recovery trajectory or even exceeded 2019 despite the increased cost of airfare. Domestic travel is fueling these destinations; in Hawaii, domestic travel is at an all-time high but international arrivals are still low.