Summer vacation a dream?
It’s not just your desire: Many are placing bets that travel could return to normal soon
On March 11, President Joe Biden gave the country a preliminary timetable for returning to normalcy. In a prime-time address, he directed states to make all adults eligible for vaccination by May 1.
“A July 4 with your loved ones is the goal,” he said.
Americans, it turns out, made travel plans accordingly: Airline ticket prices for summer travel shot up the week after the speech, according to data from the travel booking app Hopper.
The speech was sandwiched between two other events that might also have increased optimism about traveling: The Johnson & Johnson one-shot vaccine received emergency approval Feb. 27, and a tranche of stimulus checks arrived in bank accounts March 17.
“During that shift in mid-March, there wasn’t a change in supply, but there was a big change in sentiment,” said Adit
Damodaran, Hopper’s chief economist. “A lot of people started to think, maybe I could start to plan that summer vacation.”
Because airfare is typically purchased weeks or months in advance, it can be a barometer of how the public is feeling about the pace of recovery.
The prices in the Hopper data, which includes fares displayed over three years of searches (representing billions of flight queries), now suggest a travel recovery that could be in full effect as early as this summer.
Week after week, prices for summer flights have inched closer to the prices that travelers paid two summers ago — an indication of rising expectations for a more normal summer.
“Starting in July, summer 2021 fares are looking increasingly like summer 2019 fares,” said Kevin Williams, a Yale economist who reviewed the Hopper data. He added: “If anything, supply is only going up as we head into summer. High prices suggest planes will be full.”
Airlines appear to be operating on a timeline similar to passenger expectations, and seeing this summer as a moment of recovery. Southwest Airlines is recalling all flight attendants from voluntary extended leave beginning June 1.
As of late March, American Airlines had returned to 90% of its 2019-level bookings.
The spike in summer travel prices is a significant change from a few months ago, when the vaccine rollout was sluggish and demand for travel was weaker. In early February, the average price for July travel was $278.
By April, the average price for a flight in July grew 5% to $293.
The Hopper data also suggests that Americans remain hesitant to travel this spring, with a recent uptick in coronavirus cases nationally and with most people not fully vaccinated.
Fares for April and May — typically slow months for travel — are still quite depressed this year compared with similar flights in 2019. A flight in May 2021 is about $57 cheaper than a flight in May 2019.
The summer airfare recovery shows up on all sorts of routes, including those that are more typically taken by business travelers and those frequented by vacationers.
Supply could become a constraint that drives up prices later this year, particularly if travelers with extra vacation days to burn want to make up for last year’s canceled trips.