For a long time, the wealthy cornered the market on leisure. A well-to-do person in the 18th and 19th centuries could go or take a horse for a ride in the park grand tour through Europe; In the Gilded Age, they might attend a socialite’s week-long house party Newport In the dog days of summer. Meanwhile the working class, well, work. It is only in recent decades that a vast world of affordable relaxation and entertainment has opened up to all classes of people, whether that means going out to eat or traveling – which has become more accessible as commercial flights. Got it much cheaper In the late 1970s. Only in the mid to late 20th century did the idea of a family summer vacation become a symbol of the good life that the American middle class could enjoy.
This is still true, but things have changed in the last few years. Budget vacations are a worse experience than ever.
Like everything else in a deflationary economy, it’s more expensive to travel now than it was in 2019. But it’s not just the high price; There’s a growing divide in how to jet around haves and have-nots — perhaps in part because more affluent travelers are increasingly willing to shell out extra money for maximum comfort. Today, if you have the cash to splurge on vacation, you’ll be spoiled for choice that unlocks shorter wait times or, better yet, roomier plane seats. Meanwhile, if you’re on a tight budget, your vacation experience may feel especially overpriced for how awful it is.
Get less for more money
Whether something is “too expensive” is relative to many factors – such as how much money you personally have, how quickly prices have risen, how much the product or service is worth to you, and even how much other things have risen in the economy. The reality is that travel prices haven’t risen as much as other sectors – they’ve risen by around 10 per cent since 2019, far less than the inflation we’ve seen in food prices. “Typical prices are up about 23 percent over the same period,” said Sally French, a travel expert at NerdWallet, which tracks Travel inflation From the year 2019.
According to NerdWallet, flights are actually 6.3 percent cheaper than in June 2019 But other travel subcategories are up: hotel prices are up 11.6 percent, rental car prices are up 33 percent, entertainment experiences like movies, theaters, and concerts are up 21.4 percent, and dining out is up nearly 30 percent.
One reason the French feel travel prices are at an all-time high may be because they’re still trying to book trips fairly. last minute — which was relatively cheap to do during the height of the pandemic, when demand was down. It’s not cheap to do anymore. Another possibility is “recency bias,” as the French say As of early 2021, the average inflation-adjusted rent outside Atlanta, for example, was $298.52, Bureau of Transportation Statistics. By early 2024, it was $417.79. Our set point for what flights may cost in 2021 may still be stuck.
Then there’s bang for your buck to consider. Base fares have dropped since 2019 — ie, what you see before checking a bag — but more airlines are adding bag fees. Raising existing ones. These extras, known as “ancillary fees,” are making up a big chunk of airlines’ revenue, which is set to increase by 2022 and last year. About $118 billion Globally, a record high for the industry.
“We’re seeing a trend of what we call ‘unbundling airfares,'” French said
Low-cost (think Southwest, JetBlue) and ultra-low-cost (Frontier, Spirit) airlines long ago unbundled their fares to offer the cheapest, most spartan experience for budget travelers. They then charge ancillary fees to a small portion of their passengers for profit. But of late, a growing number of full-service airlines — including all major U.S. carriers except Southwest — have also unbundled what’s included in a basic plane ticket, blurring the distinction between full-service and low-cost carriers.
In other words, flyers today are paying a slightly lower base fare for a bad flying experience than they were in years past when a full-service airline ticket included checked bags and seat selection — the travel industry’s version. skimpflation. Although airlines make a lot of money from additional fees, according to a recent data YouGov survey, most consumers claimed they would probably not consider paying for any flight extras — the most tempting was to choose their own seat, the least was in an “adults-only area” on the plane. Only 16 percent of U.S. travelers said they would pay for excess baggage.
It’s not just the experience of flying that feels more vulnerable. Many hotel chains have reduced them Daily housekeeping services, which leads to concerns about cleanliness — an issue arguably even more important to travelers post-pandemic. The hotel resort fee is gone more common, too. An Airbnb booking has an average cost Increased since 2019to include Cleaning fee Those often come with short-term rentals. Listings without exorbitant cleaning fees can be packed with a long list of tasks for guests to do before they leave: loading laundry, taking out the trash, putting fresh sheets on the bed — all the things you do when you go on vacation. Once you’ve arrived at your destination and are ready to see the sights, you’ll likely pay more than tourists Tourist attractions. For example, Disney World used to offer a service where all guests could skip the lines on their favorite rides by making a reservation. A need to do so now Additional purchases Out of your admission ticket. The TSA PreCheck line, which costs $78 for five years, also getting longMakes paying for skip-the-line services less worthwhile.
Premiumization of travel
On the other hand, people with money to burn now have more opportunities to sell than ever before. Maybe you can’t afford a first class cabin, but so what Premium economy? or Basic business? or $100 per hour Rent a bed during a long-haul flight? Frontier lets you pay to keep the middle seat open. Why not pay a $500 annual fee on a credit card that will get you in the door of a new airport lounge, set to become one in 2024? Inexplicably luxurious space take over Thousands of square feet?
“What this shows is that travelers are willing to trade up,” said Henry Hartvelt, president of the travel industry market firm Atmosphere Research Group.
“We all know there is no god in economics”
Henry Hartvelt
Why not if you have money? “We all know that coaches are bad, we all know there is no God in economics,” said Hartvelt. By stripping services to disparate add-ons, airlines have ensured that basic economy is a frustrating experience, making it more likely for travelers with discretionary income to justify it. Spending more for comfort and discretion.
People are willing to spend more than ever on luxury travel. Carl Jr., a senior luxury travel curator at Synset, an agency that creates custom luxury travel itineraries for wealthy clients, said the number of people interested in its services has increased since the pandemic — especially intergenerational families looking to take a big trip together. Such custom itineraries are often $10,000 to $100,000, sometimes more. “They’re definitely willing to spend a lot more for that comfort and convenience of travel,” Junior said. The epidemic shook people’s priorities; For those who can afford to go all-out, take a once-in-a-lifetime trip.
There are private jet tours Increased from epidemicsAnd while cruises are in high demand overall right now, Luxury cruises Bookings have seen a particularly huge bump. Upscale hotel Revenues are growing faster than mid-range and budget hotels; More are opening to meet demand, meaning luxury accommodations are making up a higher share of total available hotel rooms. Data from CoStar, a commercial real estate data company, shows that luxury hotel occupancy in 2024 is slightly higher than this time last year, while budget hotel occupancy was 3.4 percent less.
Summer holidays are out of reach for some
Summer is the most popular time to travel, but recently Newsweek survey, nearly 45 percent of respondents said they were not traveling at all this season, with nearly half of that group citing cost as the reason. The results echo other surveys showing that Americans pulled back on travel expenses. The profile of the summer traveler has also gotten a bit more affluent: According to Deloitte, nearly 31 percent of Americans who travel during the summer in 2023 have incomes below $50,000. In 2024, this group makes up just 19 percent of travelers.
According to research by Atmosphere, the average income of a leisure traveler today is about $95,000. By contrast, the average income of a budget airline traveler is $79,000 — up from the $73,000 to $74,000 range a few years ago. “There’s definitely a group of people who aren’t flying as much, or maybe not at all, because right now their budget just doesn’t allow them to do it,” Hartvelt says.
Income has always been tied to the ability to travel. While most Americans have flown by plane at least once in their lives, college graduates — who typically make much more money than people with high school diplomas — are far more likely to visit. Multiple foreign countries. A Statista survey in 2015 shows that about one-fifth of households earning more than $80,000 per year are frequent flyers, while only 3 percent of those earning less than $40,000 say the same. About one-third of the lowest income group said they had never flown, compared to only 7 percent of the highest income group. another one 2017 survey showed that the majority of those earning under $35 never took an international vacation.
Today, fine travel has more flavor and growth, but that means there’s more of a gap than ever between upgraded vacationers and those who can only afford bare-bones fares. The ceiling of the travel experience is high, and the floor is low. There are few places that make the class divide more apparent than the airport.
