Memorial Day weekend collides with surging travel costs
Memorial Day this year is colliding with soaring travel prices just as millions of Americans are eager to enjoy their first holiday weekend with scaled-back coronavirus restrictions.
The cost of airfares, car rentals and Airbnb bookings are all surging. Daily car rental rates have doubled compared to this time last year, average airfares have increased 14 percent during that same period and midrange hotel rates have increased between 29 percent and 34 percent, according to data from AAA.
Gas prices are also at their highest levels since 2014, with the average cost of a gallon $1.12 more expensive than Memorial Day 2020, AAA also reported.
But industry experts say the rising prices aren’t likely to discourage most travelers and tourists from hitting the road or hopping on a plane for the first time in more than a year.
“We don’t expect these higher prices to negatively impact travel for Memorial Day or this summer. There is significant pent-up demand right now and Americans are eager to get out and travel. When travel prices have increased in the past, we find travelers may look for more free activities or eat out less while on vacation, but they still take their planned trips,” a spokesperson for AAA said.
The traditional kickoff to the summer travel season may prove to be an early test for the country’s emergence from the pandemic as more Americans get vaccinated and states roll back COVID-19 restrictions.
President Biden wants the U.S. to return to a sense of normalcy by July 4, but the prices many Americans are seeing this holiday weekend are anything but normal.
Republicans quickly seized on rising gas prices following the Colonial pipeline ransomware attack, attempting to tie them to Biden’s infrastructure agenda and a transition to renewable energy.
House Minority Leader Kevin McCarthy (R-Calif) said in a recent statement that the hack exposed the “flaws of Biden’s approach to our country’s energy policies.”
“The attack should make it clear that more pipelines and energy development here in America make our economy more resilient and our nation more secure, but President Biden and Congressional Democrats have worked to scale back both,” McCarthy said.
The Biden administration is also under pressure from the travel industry to take steps that would allow for more international tourists. Administration officials have been fielding questions over whether they will lift restrictions on Europeans coming to the U.S.
“With domestic travel coming back strong this summer, we need our leaders to focus on reopening international travel. We have joined a coalition of travel industry stakeholders to relay to the Biden Administration how important it is to establish a plan and timeline for the reopening of international travel,” said Steve Shur, president of the Travel Technology Association.
The administration has restricted nonessential travel across the Canadian and Mexican borders through June 21 but has not announced when it will allow European residents to resume regular travel to the U.S.
“We can’t overstate the importance of resuming travel of all types, business travel, international travel,” Homeland Security Secretary Alejandro Mayorkas told reporters on Tuesday.
“At the same time, we have a responsibility to ensure public safety. We are following the facts, the data, the science, in making the decision as to when business international travel actually can resume,” he added.
Domestically, air travel is back on the upswing, a significant turnaround from last year at this time when the number of passengers screened at U.S. airports was down 90 percent compared to 2019.
Southwest Airlines announced last week that June bookings and fares are getting closer to pre-pandemic levels, with only a 20 percent to 25 percent drop in revenue projected next month compared to two years ago.
Airfares overall were down 10 percent in April compared to the beginning of last year, but prices have been steadily climbing every month this year, according to data from Adobe Digital Economy Index.
Taylor Schreiner, director of Adobe Digital Insights, said that in March there was a 3.2 percent increase in flight bookings for every 1 percent rise in COVID-19 vaccinations.
“Consumers who feel comfortable traveling, whether it be for the summer months or later during the holidays, should consider getting their tickets now. In the weeks ahead, we expect prices to continue rising, even as airlines open up more routes. This is in part due to pent-up demand materializing, as more consumers get vaccinated,” Schreiner said.
Airbnb prices are also soaring. Average daily rates this month are up 35 percent compared to May 2020, Insider reported.
“What we’re seeing in travel is the biggest travel rebound not just in years since I’ve been doing this but probably the biggest travel rebound in nearly a century,” Airbnb CEO Brian Chesky told ABC’s “Good Morning America” on Tuesday.
Hotel prices, however, are still below pre-pandemic levels.
The average daily rate, while rising to $113.54 this month, is still down about 15 percent compared to 2019, according to data from the firm STR.
The hotel industry is looking for a boost from the government to help survive until travel fully returns.
Democrats have introduced legislation to provide payroll grants and tax credits to the hotel industry. The measure would give targeted relief to hotels after their reliance on the Paycheck Protection Program and other provisions from COVID-19 relief packages.
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