Prepare for the most expensive holiday travel season in history | CNN Business

Spread the love

New York
CNN Business

For travelers preparing to take their first vacation trips since before the pandemic: prepare for the shock of etiquette.

Air fares are very high. Gasoline prices in the US are higher than ever at this time of year. Hotel room and rental car rates are up 12% and 46%, respectively, from where they were in 2019.

The good news is that prices for airfare, gas, and hotel rooms are down from all-time highs reached in early 2022, but are still among the highest on record for this time of year. Only car rental prices are lower than what travelers were paying late last year, though they are still well above pre-pandemic levels.

Here’s what will cost travelers the most this holiday season:

When air travel nearly came to a halt in 2020 due to the pandemic, US airlines reduced staff through early retirement and buyout packages. Staffing is now approaching pre-pandemic levels at most airlines, but the number of flights and seats available has not returned to those levels.

Data from aviation analytics firm Cirium shows that the number of flights scheduled for November and December is down 15% from the same months in 2019. Many of those missing flights were previously flown by smaller regional airlines that serve smaller airports, and some of those airports have since done so. service completely lost. But even with a higher percentage of flights on larger planes, the number of available seats is down 3.5% compared to the same period in 2019.

A spike in Covid cases in late 2021 depressed demand for leisure travel, but it’s positively strong this year, according to airlines and industry experts.

“Holiday travel is back as strong as ever, and leisure travel is the reason it bounced back,” said Scott Keyes, founder of travel site Scott’s Cheap Flights. “A lot of people wanted to travel during Labor Day and the 4th of July and, as we’ll see very soon, during Thanksgiving and Christmas.”

And that combination – strong demand and a limited supply of seats – means high fares.

The average airfare is up about 40% from 2021, with leisure travelers paying an average of $289 each way, according to an airfare tracker compiled by Wall Street analysts in Cowan.

But it’s not just compared to pandemic prices that rates are higher.

Travel site Hopper says airfares have increased 7% compared to the same period in 2019, and up 17% when comparing prices for those who waited up to a week before Thanksgiving to book a flight.

“Holiday travel is definitely more expensive than we’ve seen in years past,” said Hayley Berg, Hopper’s chief economist.

Of course, most vacation travelers never get on a plane. they drive. AAA’s estimate is that 49 million will travel by car during the holidays, compared to 4.5 million who will travel by plane. And for those drivers, gas prices are very bigger concern than airfares.

The good news is that the price of a gallon of regular gasoline across the country is well below the record of $5.02 reached in June. AAA reports that the average as of Sunday was $4.67, down 27%. And prices continue to fall: The median price is down 11 cents a gallon in the last week alone.

But prices are still 8% higher than they were at this time last year. Gasoline prices are typically at their seasonal lows late in the year, often just before Christmas.

Even with the annual increase in holiday travel, the amount of driving in November and December it is usually well below the summer driving season. And numerous factors are driving oil and gasoline prices to all-time highs around the world this year. Chief among these is Russia’s invasion of Ukraine, which led to sanctions against Russian oil. US refining capacity, which fell during the pandemic, has yet to recover.

The average price of a gallon of gasoline on Sunday it is 46% higher than the November 20 average price over the past 20 years, according to data from OPIS, which tracks gas prices for AAA.

Hotel prices are also more expensive than ever at this time of year. The Consumer Price Index, the government’s key inflation gauge, shows the cost of out-of-home accommodation hit a record in May, with the October average, the most recent available, down just 2% from that peak.

Prices increased 6% over the prior year and are 12% higher than in October 2019. While the CPI does not provide dollar averages of the prices it tracks, Hopper calculates the average price of a hotel room in $189 over Thanksgiving weekend and $218 over Christmas week.

Once again, strong demand and tighter supply (some hotels didn’t survive the pandemic, others are still struggling to find the staff they need to fully reopen) are driving up prices.

Car rental companies slashed their fleets during the first few months of the pandemic and sold the cars they owned to raise cash. With automakers still not returning to full production due to shortages of the parts needed to build cars, including computer chips, it has taken a while for rental car companies to replenish their fleets to meet demand. .

The good news is that CPI data for October shows that car rental prices are down 3.5% from October last year and 15% less than the record set in June 2021. Still , rental cars are 46% more expensive than they used to be. They were in October 2019.

#Prepare #expensive #holiday #travel #season #history #CNN #Business

Leave a Comment

Your email address will not be published. Required fields are marked *