Rising airfares and hotel rates are making vacations more expensive

Passengers wearing face masks as a preventive measure against the spread of Covid-19 are seen on an escalator at Orlando International Airport.

Paul Hennessy | LightRocket | Getty Images

The number of people returning is increasing. So are the prices.

Airfares and hotel prices rise as the highest number of travelers return, hit beaches, mountains, and visit friends and family after being cooped up for a year since the pandemic began, in the highest numbers.

Even the cost of a road trip is rising as gasoline prices hit their highest level since 2014.

Most of the rock bottom prices seen in the depths of the pandemic were in the rearview mirror in early spring. Now airlines and hotels are preparing for a busy summer, and a surge in bookings is driving prices even higher. On top of that, airlines don’t fly as much as they did before the pandemic, so travelers can expect full flights.

US domestic tariffs are up 9% since April 1, while international tariffs are up 17%, according to a study by Bernstein published this week. And the tariffs continue to rise.

“For domestic travel, the June line is closer to prepandemic levels than it was last year,” the report said.

Southwest Airlines announced this week that leisure pricing is approaching 2019 levels.

Many travelers, like Diana Desierto, are eager to visit friends and family they haven’t seen in months.

The 40-year-old speech pathologist who lives in Baltimore hasn’t seen her parents, sister, brother-in-law, and nephews in Oakland, California, or her brother, sister-in-law, and a niece and nephew in Seattle since Christmas 2019.

“I have a 12-year-old nephew who had a crazy growth spurt,” she said. “The last time I saw him he was little. And [now] his voice is low. “

Desierto paid $ 344 for a one-way trip to Seattle and a connecting flight to Oakland in July. She used southwest frequent flyer miles to travel home. She said the tariff going west was roughly the same as the prices she had been used to for years, although she briefly thought that “maybe no one is flying and it would be cheaper”.

Another contribution to the increase in tariffs is that the airlines are reintroducing the strict rules for their more inflexible and cheapest tariffs, which are known as the basic economy, according to Samuel Engel, head of aviation practice at consulting firm ICF. Airline executives hope travelers will avoid such fares and buy standard bus tickets, which are more expensive.

Airlines lifted the rules of the pandemic to bring much-needed travelers on board as airlines suffered record losses.

“To loosen up the rules in basic economics, I’m basically giving you a $ 30 to $ 50 discount,” Engel said. “The purpose of Basic is not to sell Basic Economy, but to get you in the door and make it clear to you that you don’t want it.”

Another thing that drives up the cost of a trip is that more and more attractions like theme parks are reopening. Covid-era capacity restrictions and even masking guidelines (except during air, train and bus travel) will also be lifted.

Destinations that had less to offer than normal for about a year. Airline executives say beach, mountain, and other outdoor destinations have been and continue to be popular with travelers.

The price of a hotel in some popular travel destinations is even higher than it was before the pandemic.

Hotel prices in Cancun, Mexico were around $ 205 a night in early May, according to hotel data provider STR. That’s up from just $ 45 a year ago and $ 160 in 2019. Hawaii was about $ 269, down from $ 122 last year and $ 263 last year.

But with more reopening, other cities are recovering. Hotel prices in Orlando were $ 107 per night in early May, up from $ 62 a year earlier, but still below $ 133 in 2019.

Even New York City, which plans to reopen Broadway theaters in September and now has indoor dining, is recovering. At $ 123 a night last year, rooms jumped to $ 151 in early May – still well below the $ 269 nightly rate in 2019. STR estimates room rates in New York City will rise to an average of $ 163 per night from June through August.

Prices and hotel rates are still largely below 2019 levels as business travel and most international travel are largely absent. This will keep prices under control in the future as well.

Some travelers have other concerns besides price: crowds.

Tom Snitzer, 64, a retired real estate developer and currently a professional wildlife photographer from the Chicago suburb of Arlington Heights, said he recently flew to Atlanta to graduate his son’s medical school.

He said it took 40 minutes to reach airport security. The Transportation Security Administration is working hard to hire more screeners ahead of the busy summer travel season.

“Everyone is wrapped up like sardines,” he said.

Snitzer said his travel plans are flexible, but he plans to avoid major tourist attractions, including popular national parks.

“Everyone in the world has been cooped up,” he said. “The biggest trick is to avoid everyone else and find places off the grid so we don’t get trampled by tourists.”

– CNBC’s Nate Rattner contributed to this story.

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