Travel industry news has been, well, busy these last few weeks. Between the concerns over defunding Visit Florida to Disney’s takedown of Gov. Ron DeSantis to the epic amounts of snow at Western ski resorts this year, there’s been plenty to read.
But for those who are planning summer travel for sports events, the news that could be hitting the wallet hard, says Money Magazine. New data from travel site Hopper shows that U.S. hotel prices averaged $212 per night in January — that’s 54% higher than the same month in 2022. (Tours and vacation rentals likewise are expected to be hit by inflation this summer.)
The following reasons for the jump in prices come directly from Money:
Hopper’s analysis identifies two main factors that account for the sharp rise in hotel prices:
- High occupancy: As the travel industry rebounds in the aftermath of the COVID-19 pandemic, millions of people are vacationing again. Hopper is expecting high demand for hotel rooms throughout the year.
- Tight supply: Hopper’s report points out that right now, there are fewer hotel rooms under construction than there were before the pandemic thanks to lockdowns, supply chain snags and rising interest rates. When demand is high and supply is low, prices tend to rise.
Supply and demand imbalances aside, hotels are facing other challenges this year thanks in large part to persistently high inflation.
- "Hotels are faced with rising energy costs to heat and cool along with the rising cost of goods and services," Hayley Berg, lead economist at Hopper, tells Money.
- "Hotels recovering from pandemic lows have also needed to hire rapidly to restaff properties and have faced challenges meeting hiring goals given shortages in hospitality," she adds, noting that higher costs and staffing challenges will continue to put pressure on prices this year.
Here’s another tidbit from Money: “In a survey of its users, Hopper found that 37 percent of people plan to spend more on travel in 2023 compared to 2022, while 43 percent of people said they plan to spend less.”
Good luck to those who plan to spend the same amount or less this summer. It’s not just hotel rooms that will be costing more. Airfare is expected to increase as well, says the travel blog The Points Guy. And it’s not just a little uptick, either. Airfares are expected to accelerate this spring to the peak of summer.
The Points Guy quoted Hopper’s predictions that airfare will peak at an average of $350 this summer for domestic flights. That's down more than 10 percent from $400 last summer but still higher than the average price pre-pandemic. And with many carriers not having restored all routes, inventory of flights will be lower.
“Higher demand and less capacity mean prices will stay higher this year than they might have been a few years ago,” added the article.
The anticipated surge in prices and demand are a good reason for event owners to encourage early bookings while affordable rates (and space) remain.
While international travel might demand an earlier booking in order to remain affordable, there is still time to begin scanning the fares to domestic destinations. However, the advance time frame seems to be up for debate.
“The sweet spot for summer travel is two to three months in advance of your departure date,” Hayley Berg, Hopper's lead economist, told The Points Guy. “There's no great urgency to book an August vacation right this second. However, it's important to start tracking prices.”
Not so, say reporters at The Washington Post, who quoted Jay Jaishankar, CEO of Visitor Insurance Services, a travel insurance company. “Ideally, plan six months to a year in advance to get the best deals,” he says.
For example, Hopper recommends booking in early April for a June trip. Those who want to travel for the long Memorial Day weekend should be booking now. (Hotel rates over that weekend, a prime spot in the travel tournament market, are expected to be high as well.)
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