Airfare is Going (Sorry) Sky-High. Here’s Why | Sports Destination Management

Airfare is Going (Sorry) Sky-High. Here’s Why

Jan 27, 2022 | By: Mary Helen Sprecher
Blue skies might be the norm but some turbulence in fares is expected this year. Photo © Thomas Lenne |

Fasten your seatbelt and get ready for some economic turbulence. Airfares are about to go (ahem) sky-high. Domestic fares, meaning those to destinations across the U.S., are expected to go up the most.

The travel site, The Points Guy (TPG), notes that according to data compiled by travel booking site Hopper, domestic airfare is projected to increase by as much as 7 percent monthly through June, reaching — and passing — 2019 levels by April.

In fact, as early as October 2021, experts were predicting inflation; however, we’re starting to see it now. And that means event owners should be ready to publicize tournament dates and hotel availability even earlier.

The travelers, it is noted, will benefit from the advance notice.

“If you are planning spring break travel, you should be tracking prices and book soon,” Hopper economist Adit Damodaran, who compiled the report, told TPG in an emailed statement. “Spring prices will only get higher in coming weeks as the Omicron wave ends. In short, the best deals for spring break trips are out there right now. For summer travel, travelers should also be monitoring with price tracking tools like Hopper, but there is more time before you need to book.”

There’s not one particular cause, just a combination of factors that have created the perfect storm, as it were, to result in the fare hikes. And before you ask, most of these are out of the control of lawmakers, whether at the local, state, regional or national level.

Some of the increase is nothing new; it can be attributed to normal supply and demand, with demand typically falling in January following the holidays, only to increase leading up to the busy summer travel season.

TPG notes, “The slump in demand [in January] hasn’t stopped prices from climbing. For the week ending Jan. 17, published fares were up 9.7 percent over the same week a year previously, while demand was down 27 percent, according to data from Helane Becker, airline analyst at Cowen, in a research note published Jan. 23.”

Other factors, however, are out of the mold. One, as previously mentioned is an expected lower rate of infection from the Omicron variant of the virus; as more travelers get vaccinated (or tested), traveler safety undergoes a corresponding rise, and more people are comfortable enough to book their tickets.

Then there’s the price of jet fuel; according to Matador Network, it increased 60 percent in 2021, and higher rates are expected to continue.

How high are those new rates? According to TPG, prices have gone up by 20 percent in December alone, according to data from the U.S. Energy Information Administration, which shows U.S. Gulf Coast Kerosene-Type Jet Fuel is currently $2.33/gallon, most comparable to its previous peak in summer 2018.

What else? Staffing shortages on major airlines. TPG notes, “a number of U.S. airlines are facing a nationwide pilot shortage, which came after carriers solicited voluntary buyouts at the peak of the pandemic only to have travel come roaring back this fall. Overall, that’s sure to impact travel well beyond the lifeline of this story, the effects of which we’ve already seen.”

Are there other factors? Yes indeed: the supply and demand phenomenon is a major player.

“Fares are most definitely going to rise as demand returns,” said Brett Snyder, a travel analyst and author of the Cranky Flier aviation and travel site. “The operational issues will force airlines to keep supply lower than they might want, and with demand increasing as the delta variant impact falls away, fares will go up.”

We already know there is pent-up demand for youth sports. Expect this to be fueled by an equal amount of enthusiasm and encouragement from parents, many of whom want to see their children obtain athletic scholarships to college, or to come to the attention of scouts for pro teams. (Neither scenario has a strong likelihood, at least statistically speaking, but ait doesn't appear to matter; as Han Solo defiantly snaps in The Empire Strikes Back, "Never tell me the odds!")

Consumer confidence is key, notes Peter Greenberg, travel editor for CBS News, who spoke to WTOP News in early January on the subject. And he predicts there will still be affordable fares – for a limited time.

“The beginning of 2022 will be an unintended buyer’s market for consumers,” Greenberg said. “As air travel will drop, frequencies will drop, but availability will increase. And what that means is, for the first three months of 2022, you’re going to see fares in the United States, in some markets, dropped to double-digit prices.”

Many athletes and families have accrued extensive frequent flier miles. But, Greenberg says, it is imperative to use them as quickly as possible in order to book:

“If you take a look at how many unredeemed frequent flyer miles there are out there, it’s about 23 trillion of them. They’re going to be worth less and less as the year goes on,” he said. “As the airlines start devaluing your miles in order to handle their own debt, they’re going to make them harder to earn and even harder to redeem.”

So -- how quickly should consumers act to redeem those frequent flyer miles?

“Run, do not walk to redeem them,” Greenberg said. “You (have) up to 330 days out to plan this. And, for the moment, you’ll be able to redeem them with eligibility levels that have not been increased. And there’s inventory out there, meaning frequent flyer seats (are) available through November of next year."

Cities are also increasingly advertising they are "Open for Business," something else that will appeal to event owners, as well as to traveling athletes and their families, who will respond favorably.

Bottom line: Airfares are going to go up and there’s nothing event owners can do to stop them. However, it behooves everyone in the industry to provide as much advance information as possible, including the register for tournaments now, book hotel stays immediately and sign up for any ancillary activities as soon as possible. Ultimately, having the parameters for their stay will encourage athletes and their families to book airfares as soon as possible – and to avoid unpleasant surprises if they try to find flights at the last minute.

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