Inflation Rises Again: May Consumer Price Index Report Updates

Travel isn’t getting any cheaper.

Strong demand after two years of pandemic lockdowns and other factors drove up already high airfare and hotel prices last month, with both reaching record highs.

Flight prices in May were up nearly 13 percent from the month before and almost 38 percent from May 2021. Hotel prices increased only slightly from April to May, but were up 22 percent from a year earlier.

The price of an overnight stay at a hotel, motel or other form of lodging away from home has risen relatively steadily over the past three decades, though it fluctuated when demand for travel was disrupted by the Sept. 11 terrorist attacks, the 2008 financial crisis and coronavirus pandemic.

Airfares have been more erratic, stagnating for years after the terrorist attacks in 2001. Ticket prices climbed steadily from 2009 to 2013, when prices peaked. In the years that followed, though, fares slowly declined and then plunged when the pandemic took hold.

“If you look at fares, while they’re up a lot from prepandemic lows, in real terms our fares in the second quarter are going to be back to about where they were in 2014,” Scott Kirby, the chief executive of United Airlines, said at an investor conference last week.

The average price of a domestic round-trip flight is $403, up 33 percent compared with the same time in 2019, according to Hopper, a travel booking site. International trips are averaging $1039, up 17 percent from 2019.

Demand for flights is especially high this year because pandemic restrictions have been eliminated or eased in much of the country. Many people have also been eager to shift their spending from goods to services after not traveling much in the last two years. Fares have also been driven higher by the rising cost of jet fuel. Airlines have also been cautious about adding too many flights this summer for fear that tight schedules would make it difficult to overcome disruptions, causing a repeat of several disastrous episodes last summer and over the winter holidays.

Weekend getaways are especially popular this summer, as travelers take shorter trips than they had before the pandemic, according to Hopper. Within the United States, Atlanta, Denver, Las Vegas, Los Angeles, Miami and San Juan, P.R., are popular weekend destinations. Popular international destinations include Cancun, Mexico; Mexico City; Vancouver, British Columbia; and Toronto.

Hopper found that fares for flights later in the summer are generally a better deal than those earlier in the season. Travelers can save more than $100 each on the cost of a domestic flight and hotel stay if they plan trips in late August rather than in June or July.

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