Hayley Berg, the lead economist at mobile travel app Hopper, joined Cheddar to talk about how pent-up demand for travel is not slowing down even though the latest CPI report revealed airline fares jumping 10.7 percent in March compared to the previous year. Berg also provided some tips for travelers who are looking to save amid the hikes. "We did a survey of Americans and found that more than half are planning to travel for leisure this summer and 25 percent of them, it's their first travel since the pandemic started," she said. 


Closing Bell

Prices for Summer Flights Rising — But Demand Isn't Slowing Down

Many Americans preparing to take to the skies this summer, but it's more than travelers and luggage that will be taking off the Labour Department's March report on consumer prices finding that airline fares rose 10.7% in March from the month before in February in February, they were up 5.2% from the month before. So joining me now is Hayley Berg, lead economist at Hopper. That's a mobile travel app using technology to help customers find travel discounts. Haley, we all need to find discounts these days. And so based on the data that you've seen, how much more expensive should travelers expect their flights over the summer to be This summer, we're seeing domestic airfares about $383 round trip. Now that's a 34% increase compared to 2019, the last normal summer travel season or just about $100 per ticket, Wow. Um and I know that I've done some searches. I'm seeing a price tag even more than $383 apiece for domestic round trip. So certainly the expense is there internationally are full screen here showing the average is $912. Haley. Any indication that consumers will not be traveling because of these higher fares So far at hopper. We have not seen any indication that Americans are going to slow down their travel spend. We've seen demand actually grow 50% faster between February and the beginning of may than we did at the same time in 2019. So this is not just seasonality, this is pent up travel demand from two summers of Abnormal or no travel. We did a survey of Americans and found that more than half are planning to travel for leisure this summer and 25% of them. It's their first travel since the pandemic started, Wow. So how do these levels, how do these price points compared to pre pandemic? Are they about the same price per ticket per round trip? Or are we more or less than what we were before the virus hit Before the virus. Domestic airfare was about $100 less on average for a summer. Domestic trip for international airfare where demand has not recovered as much airfares are very much in line with where they were at this time in 2019 headed into the summer. Very interesting now of course, with demand of 50% from February through the beginning of May. As you cited Haley, it would seem as if airlines could continue to charge even higher prices. Do you expect these prices could continue to rise into the summer months? We do and there are a number of factors at play. One is seasonality prices typically rise at this time of the year because there is more demand layer on top of that. The intense and sustained increase in demand from travelers and higher jet fuel prices. Jet fuel is up over 95% compared to this time in 2019. So as long as we continue to see high jet fuel prices and high demand, we can definitely expect higher airfares to continue throughout the summer, jet fuel prices you set up 95% compared to what we saw pre pandemic in the summer of 2019. Is that right correct? And up significantly over 70% since just january of this year. So you add in very high jet fuel prices with extremely high demand for travel, It will put tremendous upward pressure on airfare. How is hopper helping consumers save money trying to get them the best deal if there are deals to be had, there are still deals available that is the silver lining. So hoppers a price monitoring tool and that's one of our biggest tips for travelers who are looking to save, use the price monitoring tools so that you're being proactively notified when prices on a trip that you're interested in drop and there's a great deal available or start rising and it's time for you to book booking at the right time is one of the best ways to get a deal as well as being flexible on when you travel. Okay, another question that I have here Haley is um certainly before old Macron hit and I think a lot of people had to change their christmas travel plans. I know for thanksgiving of last year. What was that six months ago Now? At about this point? Um we did see that travel was almost close to what it was pre pandemic just in terms of the velocity of people actually a boarding and taking flights when we look at spring break this year, was it the same as pre pandemic levels or our travelers is still a little bit skittish to get back into the skies. We're seeing that the pole here is really airline capacity. So airline capacity is at about anywhere from 75 to 95% of what it was in 2019 and they will be continuing to add back capacity as demand fills up. So about An average of 85% of the total demand in 2019 has recovered. And we're continuing to see that build up but until we get back to more than 100% of the seat capacity, we won't be at 100% of 2019 levels quite yet. Any indication. I don't know if you can track the data this way. Haley but any change in customers appetites or even airfare prices as we know the mask mandate is set to lift or at least there's a push to lift the mask mandate on planes. We haven't seen an immediate impact from the changes in the US in the last two weeks or so where we've seen much larger impact is when regions or countries reopened for travel. So we expect something like the hopeful reopening of china or Japan to have a significant impact on supply. You know, how many flights are flying internationally, even prices we expect that to have the greatest impact rather than something a bit more domestic focused like the mask mandate changing, Interesting now as we get into the summer months, clearly there is demand. Do you think that that average capacity level might increase from about 85% of where it was pre pandemic? Do you think people are still on the sidelines waiting to book? Yes, we know that on average travelers have waited a little bit longer this year to book than they would in typical months. So they should plan to book by the first week of May. And airlines are planning ahead as well. We've already seen that fourth of july weekend and labor Day weekend airlines are planning to fly more than 100% of the capacity they had in 2019. So as demand comes back as travelers are booking will likely see airlines adjust add capacity where needed shift resources. But if you are planning to travel this summer book by the first week of May this week to get the best deals and make sure you've got a seat booked on the flight that works best for you. Okay, another question. Um Hayley, Just because I think people certainly do have the travel itch. Is what if scheduling derails your flight? Certainly this past year we've seen as the economy has reopened since the depths of covid that scheduling staffing George's they've all been an issue And so what do travelers need to keep in mind when booking with the potential risk that scheduling or staffing could impact their trip? You're right. We have seen periods where there have been big increases in delays, cancelations, even major schedule changes. So the best advice is if you are planning a trip that involves flying, book your flight for early in the day, so that if there is a disruption, you can book yourself on a later flight or potentially still get on flights later in the day and get to your destination on time. If you're traveling for a wedding, we recommend leave a few days early a day or two early. So if there's a disruption you can still get there on time. But best advices purchase a travel disruption plan at hopper, we have them for example and they'll allow you to rebook yourself immediately free of charge on the next flight out of your airport regardless of the airline. To make sure that if there is a disruption, it doesn't interrupt your plans too much. It doesn't hit your wallet too much and you can still get to where you need to go very quickly. All right, Hayley berg, Lead economist at Hopper. Haley's such great insight. Thank you