THere are signs that airline ticket inflation is finally impacting travel demand, according to extensive new data from Adobe Analytics, which collected 150 billion visits to travel, leisure and hospitality websites to drive domestic flight bookings on six of the top 10 U.S. airlines. see.
Overall, it has been an excellent year for airlines. Last month, each of the largest legacy U.S. carriers reported double-digit third-quarter revenue of billions.
Domestic flight bookings in the first 10 months of 2022 led to $76 billion in online spending, compared to $65 billion in the same period in 2019, the last year before the Covid-19 pandemic, Adobe found.
That 17% increase in airfare sales was due to a combination of more bookings – a 5% increase compared to pre-pandemic levels – and higher fares.
Prices have risen throughout the year. In October, domestic airfares were 2% higher than in September and 24% higher than in 2019, according to calculations by Adobe.
Airfares have risen much faster than headline inflation for several reasons. Russia’s war in Ukraine has pushed up fuel costs, and in recent months an extraordinarily strong uptick in travel demand has collided with huge supply challenges, including labor shortages, aircraft delivery delays and other issues.
“After record spending on physical goods in the first two years of the pandemic, we are seeing consumers shift more towards services such as air travel,” said Vivek Pandya, principal analyst at Adobe Digital Insights. “We expect momentum to continue through the holiday season, even as prices remain elevated above pre-pandemic levels.”
Until now, passengers have been willing to pay higher ticket prices, which have more than offset the rising costs of airlines. But Adobe’s research indicates that consumers are finally starting to get annoyed by sky-high ticket prices.
Domestic flight bookings for the week of Thanksgiving are down 7% compared to 2019. And looking ahead to Christmas travel, domestic flight bookings are currently down 17% compared to holiday bookings right now in 2019.
“The slower growth in bookings indicates that some consumers are waiting to see if prices drop significantly,” Adobe said in its report, “while others are pursuing alternative forms of travel, such as by car or train.”
The deal-finding site Hopper’s Holiday Travel Outlook report found that Christmas airfares will be higher than in the past five years, up 55% from last year and 19% higher than before the pandemic.