How inflation affects summer travel: CEO says consumer is getting ‘smarter’

It’s been more than two years since Americans canceled their summer travel plans due to the coronavirus pandemic and related shutdowns, but now that people are traveling again, consumers are facing another challenge – high inflation.

The CEOS of two travel companies told Fox News Digital that while the economic backdrop is changing consumer behavior, demand for summer travel remains incredibly strong.

Priceline CEO Brett Keelers said that although inflation is nearing its highest levels in 40 years, “travel is strong” and this summer will still see a “busy travel season”.

He noted that “prices across all travel categories, whether it’s airline tickets, hotels, car rentals, etc., have gone up so dramatically over the past few months that consumers are forced to rethink what kind of travel they want to take.”

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“They trade off their behavior to keep enjoying travel,” he said.

Keeler provided insight as the latest inflation data provided by the Labor Department revealed that year-on-year inflation cooled down for the first time in months in April, but rose more than expected.

The Labor Department said last month that the Consumer Price Index, a broad measure of the prices of everyday goods including gasoline, groceries and rents, rose 8.3% in April from a year ago, less than the 8.5% annual increase recorded in its walks. Prices jumped 0.3% in the one-month period in March.

Those numbers were above the headline 8.1% and the 0.2% monthly gain that economists at Refinitiv had expected.

According to the data, airfares have risen as more people start to travel with prices rising by 18.6% in the one-month period and 33.3% over the past year, the largest increase in a single month since the report began in 1963.

Consumers hoping to take a driving trip this summer are facing record-high gas prices.

On Friday, the national average gallon of gas hit $4.76, a new record, according to the AAA.

And if prices continue to rise over the next few months, Keeler warned, “consumers will make trade-offs that may include not taking certain types of trips at all.”

As Brian Kelly, founder and CEO of Points Guy, said he believes “prices will continue to rise throughout the summer.”

He noted that despite the inflationary background, “the consumer is very aggressive when it comes to booking travel and the numbers show that.”

Summer travel demand remains “strong,” said Hayley Berg, chief economist at mobile travel app Huber, noting that “demand has grown 50% faster since the beginning of the year than in the first four months of 2019.”

Berg noted that despite the price hike this summer, Hopper has over the past three weeks seen domestic airline ticket prices stabilize after a steady rise in the past few months.

The average price for a domestic airfare is currently $404 one-way, up 40% from $288 this time last year and 26% from $322 one-way in 2019, according to Huber, who noted that international air travel is seeing Also an increase of 35% over the same time last year and 17% from 2019.

The data revealed that hotels currently average $204 per night nationally, 34% higher than in the same period last year.

Kelly noted that “the number one thing consumers are concerned about now is the cost of travel, not COVID for the first time in two years.”

“People just have to be smarter,” he added.

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He also said more people are booking all-inclusive vacations this summer “so they can control at least one aspect of the trip” and recommended going where the dollar is strong as a way to “fight inflation”.

“Consumers now pay $900 a night for standard Miami hotel rooms while you can go to Portugal for the same price as a flight to Miami and the US dollar goes much further,” Kelly said.

Huber noted that summer travel demand for 2022 is primarily for domestic destinations, with 65% of bookings being to US destinations, a 16% increase compared to 2019.

Americans are continuing to travel this summer despite rising prices for gas, flights and hotels, according to two travel industry CEOs. (AP Photo/Lynne Sladky/AP Newsroom)

Keeler said he had not yet hesitated to pay higher prices for flights, but warned that the “sticker shock” could begin to set in.

With regard to road trips, he noted that high gas prices “are beginning to affect the distance people want to travel to a hotel or to a destination.”

“We’ve seen the average distance people travel shrink over the recent weeks here due to the impact of the gas price,” he added.

Keeler noted that travelers used to drive an average of 175 to 200 miles from their homes, but now with higher gas prices and hotels, the average has dropped to about 160 to 170 miles.

Photo by Brett Keeler, CEO of Priceline.

Priceline CEO Brett Keeler identifies summer travel trends as prices rise, noting that demand remains strong, but consumer behavior changes amid the economic backdrop. (Priceline)

“Another trend is that people are trading in hotel quality and moving from higher star class to lower classes in order to keep making the trip, but not paying the premium required to move to some of these higher class hotels,” she continued.

According to Keeler, summer travel hotspots booked on the platform include Las Vegas and Orlando “because there is more flight capacity, which means airfares are lower and there is a very high hotel capacity… thus consumers can find great deals compared to other expensive markets.” The price “.

He also noted that “some big cities are starting to see a good return in demand,” including New York City, Miami and Chicago.

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He pointed out that the demand for European travel was strong globally, especially in London, Paris, Rome and Barcelona.

“When people are looking for value on the international side, they are getting closer to home because there is a lot of value to travel to places like Mexico and the Caribbean,” Keeler said.

Data as of June 1 from Expedia that was sent to Fox News Digital confirms travel trends that Keeler noted based on Priceline data.

According to Expedia, top summer 2022 destinations include New York City, Las Vegas, Los Angeles, Orlando, Cancun, Chicago, Seattle, Denver, Boston, and San Francisco in that order.

Photo by Brian Kelly, CEO of The Points Guy

Points Guy CEO Brian Kelly offers travel advice on how to conserve cash amid rising inflation. (White Smith, photo editor at The Points Guy)

Points Guy noted that in the current inflationary environment, consumers can save by flying in the middle of the week, using Google Flights to get the best deals, and setting alerts to see when airfares drop.


He stressed that “when you see a good airline ticket, book it immediately,” especially because he expects that “prices will continue to rise throughout the summer.”

When taking a road trip, Kelly recommended planning where to stop and get fuel “based on the cheapest prices” since prices and taxes vary widely by state.

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