Expect Big Crowds, High Prices for the Summer Travel season

30-05-23

The unofficial start of the summer travel season is here, with airlines hoping to avoid the chaos of last year and travelers scrounging for ways to save a few bucks on pricey airfares and hotel rooms.

Some travelers say they will settle for fewer trips than they hoped to take, or they will drive instead of fly. Others are finding different money-saving sacrifices.

Stephanie Hanrahan thought she’d save money by planning ahead for her daughter’s birthday trip to Disney World in Florida. Instead, it ended up costing the same as the Dallas-area family’s trip for four to California last summer, so now her husband and son are staying home.

“We just had to grit our teeth,” said Hanrahan, a writer and speaker who also runs a nonprofit, as she and daughter Campbell waited for their flight last week at Dallas Love Field.

The number of people going through U.S. airports hit pandemic-era highs last weekend, and those records are almost certain to be broken over the Memorial Day holiday.

With more travel comes more expense. The average rate for a U.S. hotel room last week was $157 a night, up from $150 in the same week last year, according to hotel data provider STR. And the average daily rate for other short-term rentals such as Airbnb and Vrbo rose to $316 last month, up 1.4% from a year ago, according to AirDNA, which tracks the industry.

There is a bit of good news for drivers, however: The national average for a gallon of regular was $3.56 at midweek, down from $4.60 at this time last year, according to AAA. Renting a car is also cheaper than a year ago, when some popular destinations ran out of vehicles. Travel company Expedia said larger inventories let the companies rent more cars at lower prices.

For air travelers, airline industry officials say carriers have fixed problems that contributed to a surge in flight cancellations and delays last summer, when 52,000 flights were nixed from June through August. Airlines have hired about 30,000 workers since then, including thousands of pilots, and they are using bigger planes to reduce flights but not the number of seats.

“I don’t have the hubris to tell you exactly how the summer is going to go, but we have prepared and we have a robust plan for it,” said Andrew Watterson, chief operating officer at Southwest Airlines, which struggled at times over the summer of 2022 and suffered an epic meltdown around Christmas, canceling nearly 17,000 flights.

David Seymour, the chief operating officer of American Airlines, said his staff has fine-tuned a system it uses to predict the impact of storms on major airports and devise a plan for recovering from disruptions. He said it is reducing cancellations.

“It’s going to be a solid summer for us,” Seymour said.

In a report released last month, the Government Accountability Office blamed airlines for an increase in flight cancellations as travel recovered from the pandemic. It also said airlines are taking longer to recover from disruptions such as storms.

Transportation Secretary Pete Buttigieg says the government will hold airlines responsible to treat passengers fairly when the carriers cause cancellations or long delays. But just like the airlines, the Federal Aviation Administration — the agency that manages the nation’s air traffic — has had its own staffing shortages and occasional breakdowns of aging technology.

The FAA is training about 3,000 more controllers, but they won’t be ready this summer. The agency resorted to nudging airlines to reduce flights in the New York City area this summer, and it opened 169 new flight paths over the East Coast to reduce bottlenecks.

“It’s going to be an ordeal — it’s always an ordeal to travel in the summer,” said travel analyst Henry Harteveldt, “but the airlines have done a lot to improve their ability to operate well this summer.”

Airlines hope that limiting the number of flights will improve reliability and reduce delays. So far, it seems to be working. About one in every 70 U.S. flights have been canceled this year — half the rate of a year ago and lower than in 2019.

Limiting the number of flights also keeps prices above pre-pandemic levels.

A provider of travel data, Hopper, predicts that average domestic airfares will peak next month at $328 for a round-trip ticket, which is down from last summer’s record of $400 but 4% higher than in 2019.

There are some last-minute deals on domestic flights, Hopper found, but international fares are their highest in more than five years, with prices to Europe up 50% from a year ago.

The same thing is happening within Europe, as airlines hold the line on capacity at a time of strong travel demand.

“There is no expectation of seeing cheaper fares in Europe in the next seven or eight months,” says John Grant, an analyst for OAG, a U.K.-based travel-data provider.

For the travel industry, the big question is how long consumers can keep paying for airline tickets and accommodations while they try to deal with stubborn high inflation, news about layoffs and bank failures, and fear of a recession.

Industry executives say consumers are favoring the experience of travel over other types of spending, but some analysts see cracks in the strong demand for travel that began in early 2022.

Bank of America analysts say data from their credit and debit card customers showed a slowdown in spending in April, as card use fell below year-before levels for the first time since February 2021. They say spending on hotels, which rebounded relatively early from the pandemic, dipped this spring, while the late-recovering cruise industry is still steaming ahead — card spending on cruises rose 37% last month, although from very low levels a year ago.

“Travel remains a bright spot relative to other sectors, but we’re also seeing signs of moderation in the travel space,” said Anna Zhou, an economist for the bank.

"Vai ser uma provação - é sempre uma provação viajar no Verão", disse o analista de viagens Henry Harteveldt, "mas as companhias aéreas fizeram muito para melhorar a sua capacidade de operar bem este Verão".

As companhias aéreas esperam que a limitação do número de voos melhore a fiabilidade e reduza os atrasos. Até agora, parece estar a funcionar. Cerca de um em cada 70 voos dos EUA foi cancelado este ano - metade da taxa de um ano atrás e menor do que em 2019.

A limitação do número de voos também mantém os preços acima dos níveis pré-pandémicos.

Um fornecedor de dados de viagens, Hopper, prevê que as tarifas aéreas domésticas médias atingirão o pico no próximo mês em $ 328 para um bilhete de ida e volta, o que é inferior ao recorde do verão passado de $ 400, mas 4% maior do que em 2019.

Há algumas ofertas de última hora em voos domésticos, segundo o Hopper, mas as tarifas internacionais são as mais elevadas em mais de cinco anos, com os preços para a Europa a subirem 50% em relação a um ano atrás.

O mesmo está a acontecer na Europa, uma vez que as companhias aéreas mantêm a capacidade numa altura de forte procura de viagens.

"Não há qualquer expectativa de ver tarifas mais baratas na Europa nos próximos sete ou oito meses", diz John Grant, analista da OAG, um fornecedor de dados de viagens com sede no Reino Unido.

Para o sector das viagens, a grande questão é saber durante quanto tempo os consumidores podem continuar a pagar os bilhetes de avião e o alojamento, enquanto tentam lidar com uma inflação teimosamente elevada, notícias sobre despedimentos e falências de bancos e o receio de uma recessão.

Os executivos do sector afirmam que os consumidores estão a privilegiar a experiência de viajar em relação a outros tipos de despesas, mas alguns analistas vêem fissuras na forte procura de viagens que começou no início de 2022.

Os analistas do Bank of America dizem que os dados de seus clientes de cartão de crédito e débito mostraram uma desaceleração nos gastos em abril, já que o uso do cartão caiu abaixo dos níveis do ano anterior pela primeira vez desde fevereiro de 2021. Eles dizem que os gastos com hotéis, que se recuperaram relativamente cedo da pandemia, caíram nesta primavera, enquanto a indústria de cruzeiros em recuperação tardia ainda está avançando - os gastos com cartões em cruzeiros aumentaram 37% no mês passado, embora de níveis muito baixos um ano atrás.

"As viagens continuam a ser um ponto positivo em relação a outros sectores, mas também estamos a ver sinais de moderação no espaço das viagens", disse Anna Zhou, economista do banco.