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Americans are doing a double-take when they look at the bills and receipts they’re receiving for travel-related costs this summer.
Of course, there’s a caveat – the price to go away this summer is being compared to the same time period a year ago, when the pandemic was in full force and costs were way down as hotel chains and airlines held dramatic sales to entice people to hit the road.
For instance, according to CNN Business, hotel rooms were up almost 44 percent at the end of June compared to a year earlier, according to data from hotel research firm STR. And airfares were 24 percent higher in May than in the same month last year, according to the Consumer Price Index.
But, again, the 2021 costs are being compared to 2020, when the travel industry was at a virtual standstill.
“Most of what people are seeing in price inflation is due to how cheap things were last year,” said Adam Sacks, president of Tourism Economics.
CNN noted that most people who work in travel are not making the year-over-year comparisons in the Consumer Price Index and instead are comparing the costs to 2019 price and booking levels.
And even some of those prices are back to what they were two years ago thanks to a quicker-than-expected rebound in demand for travel.
For example, STR shows the national average for U.S. hotel rates in the week ending June 26 back to 99.5 percent of where they were at the same time in 2019.
“The price differences are pretty disparate,” Sacks said. “The national prices don’t really mean anything when you’re looking to travel to a specific location at a specific time.”
That’s very true.
A new report released by the American Hotel & Lodging Association (AHLA) shows that the road to recovery for the hotel industry is long, with 21 of the top 25 U.S. hotel markets remaining in a depression or recession.
Urban, or city, hotels are down 52 percent in room revenue in May compared to May 2019. For example, New York City, which remains in a depression, has seen one-third of its hotel rooms (42,030 rooms) wiped out by the COVID-19 pandemic, with nearly 200 hotels closing in the city.
Suburban and airport hotels are down 21 and 33 percent, respectively, while interstate, resort and small-market/towns were all flat.
Revenue per available room has dipped dramatically in big cities. For instance, in San Francisco, one of the top five most expensive U.S. cities, revenue per available room went from an average of $203 in May of 2019 to $62 in May of this year.
Drive trips are the kind of travel currently lining the pockets of investors. The national average price for a gallon of regular gasoline today stands at $3.13, a seven-year high and a 44 percent increase from a year ago.
And rental car prices are 70 percent higher than they were two years ago and 110 percent greater from a year ago.