Friendly Skies Are Open Again… and the Clouds Look Like Dollar Signs

To say the travel industry has been clobbered the past 14 months is the understatement of the year.

Being crammed into an airplane, train or bus was never appealing before. But most of us did it because we needed to for our jobs. Or we felt it was worth it in order to vacation or visit family and friends. 

Once the pandemic hit, however, most Americans opted to stay home. Business meetings, getaways, reunions, holiday gatherings… almost all were canceled.

For more than a year now, the CDC has strongly urged people to avoid unnecessary travel. Now the CDC is loosening travel guidelines for those who’ve been fully vaccinated.

Travel Industry Took Huge Hit

Yes, a number of other industries were slammed by the coronavirus as well. Including restaurants and hospitality. But perhaps none so hard as the travel industry. 

In April 2020 there were 95 percent fewer travelers passing through TSA checkpoints than in April 2019.

Fast forward nearly a year. U.S. airline carriers lost an average of $150 million a day during the first quarter of 2021. That’s after the cost of a domestic flight was averaging about $245, the lowest in 25 years.   

As of last month, hotel occupancy was averaging only 51 percent. And that was the high water mark for the past year.  

Cruise ships were virtually grounded during the first year of the pandemic. Now some are starting back up again, albeit with “vaccination passport” requirements.

Countering With Cheaper Rates

So, airlines and other modes of transportation came up with ways to make travel seem safer. In an effort to keep their heads above water.

For example, airlines kept middle seats open. And promised thorough disinfectant cleaning between flights. 

“Dirt-cheap” travel packages were also offered. As well as bonus mileage incentives. All to convince people to take advantage of deals while they were available.

Hotels got into the act as well. In addition to less expensive travel, hotel prices went down sharply.

‘Pandemic Fatigue’ Means More Travel

But now the tide is starting to turn. Some 3 million vaccinations are being administered daily. That’s making many people more confident. They believe the COVID-19 threat is decreasing. And will continue to decrease.

As of this writing, statistics don’t support the optimism. New cases and hospitalizations are rising in many states and overall. Virus variants are more contagious and perhaps more deadly. Vaccination health scares are occurring.

But the travel industry is counting on “pandemic fatigue.” Industry officials understand that people are desperate to get back to “normal.” And that includes regular travel.

So, airlines and hotels are doing what all industries do in similar circumstances. And that’s raising prices to meet increasing demand.

More Travel Equals Higher Prices

It’s likely we will start seeing significant increases in travel this summer. Already passengers going through U.S. airports are topping 1 million per day. 

Kayak.com is a travel search site. It reports summer travel searches are up 27 percent. At the rate airfares are rising, they will be at 2019 levels soon. That’s great news for an industry that has struggled so much recently.

Jamie Baker is a JP Morgan airline analyst. He says, “Domestic airfares are rising. Discounted fares increasingly require a hunt. And for many consumers that have been locked up for a year, they’re probably not up to the effort.”

Scott Kirby is CEO of United Airlines. He recently said this. “As long as there is not a setback, we are on the road to recovery. We can put those days of talking about cash burn… largely in the rearview mirror.”     

Where Is Everyone Going?

So, with more travel planned for this summer, where are Americans headed? 

According to CheapOair.com, Honolulu, Hawaii and Las Vegas, Nevada are the top destinations for couples.

Other hot spots are Cancun, Mexico and San Juan, Puerto Rico. As well as Punta Cana in the Dominican Republic and Los Angeles, California.

The top Florida destinations – Miami, Tampa, Ft. Lauderdale and Orlando – are benefitting from the lack of travel to Europe and Asia.

CDC Guidelines Dependent on Vaccinations

The CDC recommends that people who have not been fully vaccinated delay travel. They say travel increases one’s chances of getting and spreading the coronavirus.

The agency claims fully vaccinated people can travel safely within America. And that they do not need to get tested prior to or following travel. Or to self-quarantine upon arrival or returning home.

Recommendations for unvaccinated people include testing one to three days prior to a trip. And three to five days after. As well as a seven-day self-quarantine after returning home. 

Wearing a facemask is a must for all travelers. Suggestions include social distancing and frequent hand washing. That’s the “new normal.”

Time to Book Is Probably Now

If you decide the travel risk is worth it, experts say the time to book flights and hotels is now.

They expect a steady increase in fares – 4 to 5 percent per month – so prices may never again be as low as they are now.

Then again, it’s not only supply and demand that affect travel prices. Oil markets always impact airfares. And if there were a major vaccine distribution disruption, some travelers might cancel plans. That could drop prices again.

But the general consensus is that travel prices will continue to rise. I guess we can call that the “old normal.”     

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