Book holiday tickets now!
In the years of the pandemic, domestic travel picked up speed. National parks were full; car rentals breached $700 a day; and demand for hotels and vacation rentals went up. Then, the resurgence of international travel opened the floodgates after border rules changed.
This Fourth of July weekend saw a record number of travelers—the Transportation Security Administration (TSA) screened 2,884,783 on June 30, its highest ever. Travel numbers this summer are surpassing 2019, and the good news is that there is no round two of last year’s “travel apocalypse.” But the headlines this year are dominated by exorbitant ticket prices. Along with pent-up demand for cross-country travel, fewer airline seats, inflation, labor shortages, and jet fuel prices have driven up airfares, especially from the U.S. to Europe and Asia. It hasn’t deterred consumers who are willing to pay $300 more to fly to Europe this summer.
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But another consequence of this revenge travel trend is that domestic airfares are finally falling.
According to online travel company Hopper, domestic airfare is 11% cheaper than last year, about $32 less for a round trip. Fares to the Caribbean are also down by 9%, while Mexico and Central America have stayed the same.
Until mid-September, domestic prices will remain low, and peak in November in time for the winter holidays. “Fares will remain below 2019 levels until November when they will come close to matching pre-pandemic levels through Christmas,” Hopper’s Q3 2023 Consumer Travel Index report predicts.
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The reasons for this are many. Jet fuel prices, although still higher than in 2019, have fallen since last year. Airlines have also improved domestic capacity by introducing bigger planes and competition is also making it cheaper to fly within the U.S.
Meanwhile, getting to Asia costs 59% more than it did pre-pandemic because the capacity of airlines is still 65% of what it was. Tickets to Americans’ favorite destinations in Europe are 7% more expensive this year, and it is possible that passengers will pay more with capacity at 97% and demand surging. “Higher fuel costs will continue to put pressure on airfares, especially on expensive long haul international routes,” the report warns.
Airlines are prepping for a strong winter season and adding new routes. But there will be wariness given the current economic scenario. Irish low-cost carrier Ryanair announced quarterly profits in June, but CEO Michael O’Leary expressed concerns about winter travel. He said that consumers might be more price sensitive in the second half of the year due to inflation, and the airline will have to lower their prices to fill 25% more seats than in 2019.
No matter where you plan to go this winter, now through September is the perfect window to book your holiday tickets. Before you do, keep in mind that winter storms cause disruptions every year, so go for direct, early morning flights to avoid getting stuck.
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