Say goodbye to $30 plane tickets. The era of dirt-cheap flights is ending

Revelers flock to the beach to celebrate the spring break while coronavirus disease (COVID-19) broke out in Miami Beach, Florida, United States on March 6, 2021.

Marco Bello | Reuters

Are you thinking about finally going on vacation? You’re not alone.

Millions of Americans, many of whom have been cooped up for a year, make their way and go to heaven as more people get vaccinated against Covid-19. President Joe Biden said last week that all American adults will be eligible for a vaccine by May.

As more and more people become confident that the Covid-19 threat is subsiding, the harder it will be to find the double-digit lowest fares airlines have been offering when they desperately searched for planes. Hotel prices are also rising.

According to Kayak, a travel search website, searches for summer travel have increased 27% every week since Biden’s announcement, and airfares for the top 100 most searched US destinations have increased 7% month-over-month.

“Domestic fares are rising. While there are still discounts, they are no longer in the lap of the consumer,” said Jamie Baker, analyst with JP Morgan airline. “Discounted tariffs increasingly require a hunt, and for many consumers who have been incarcerated for a year, they are likely not up to the hassle.”

The cheapest domestic recreational airfare, including the special rates airlines send to your inbox, was $ 59.48 on March 15, still 26% lower than a similar week in 2019 but up more than 6% according to Harrell Associates higher than the week. a company that tracks airfares. Average leisure tariffs were close to $ 187, up nearly 5% from the week and nearly 9% from a similar point in 2019.

Airline executives said Monday bookings increased in March and stretched into summer. According to Airlines for America, U.S. airlines are well on their way to losing an average of $ 150 million a day this quarter. However, the CEOs of United Airlines and Delta Air Lines said the upward trend will finally curb their cash burn this spring. JetBlue calls flight attendants back from unpaid a month earlier because demand is stronger than expected.

“As long as there is no setback, we are on the recovery path and can largely put these days of talking about money burns, layoffs and the like in the rearview mirror,” CEO Scott Kirby told CNBC’s “Squawk Box” on Tuesday.

Hotel occupancy in the US averages more than 51% this month through March 13, its highest level in more than a year, according to hotel data analyst STR. In hot vacation spots like Miami, occupancy is nearly 70% with average prices of $ 228 per night, the highest prices since February 2020.

Jamila Ross, owner and founder of The Cooper Door B&B in Miami, said she cut her rates by more than 40% to $ 100 a night for January and February, but has since been able to increase them to $ 120.

Covid was particularly devastating for their hotel because it was so dependent on the cruise industry due to its proximity to the port.

She said the hotel is now 70% full, up from 40% last month, despite holding back some inventory due to Covid.

“We want to be a responsible brand,” she said. “We can’t afford to slip up.”

Maura Gannon, general manager of The Mermaid & the Alligator, a nine-room hotel in Florida’s Key West, said, “As soon as people get the vaccines, the phones ring off the hook.”

She said some travelers are asking for bookings in May and June, which are traditionally part of the lower demand season.

Some travelers are looking for high-end accommodations that will allow them to continue to physically distance themselves from other guests.

“Villas come first year round,” said Viktoria Riley, director of marketing at Ocean Club, a Four Seasons resort in the Bahamas. Three-bedroom villas cost $ 16,500 per night in the off-season, which starts in mid-April and runs through late November.

However, tariffs and room rates have slumped the pandemic, and there are still deals, especially for business travelers, that are still largely on hold. Demand is nowhere near as high as it was before the pandemic.

In the third quarter of 2020, the latest data available, US domestic flights averaged $ 244.79, the lowest in more than 25 years, excluding inflation, according to the US Department of Transportation.

However, the airlines have greatly reduced capacity to meet weak demand, which means there are fewer seats. They are expected to add more seating at the start of midsummer season.

And with much of international travel still banned, the domestic vacation destinations have become a place to go.

Delta Air Lines, for example, announced nine new destinations on Friday or improved service to outdoor vacation destinations like Glacier Park, Mont., And Jackson Hole, Wyo.

“US travelers are being redirected to the US and the few countries we are allowed to visit in one way,” said Henry Harteveldt, founder of Atmosphere Research Group, a travel consultancy. “That changes the demand pattern and thus the prices for air fares.”

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