Memorial Day is the traditional start of the summer travel season, and AAA predicts more than 39 million Americans will travel this weekend. But travel costs are also skyrocketing and all the planes are full — and while Americans want to travel now, more than ever, it's hard to find a deal.
Airlines, faced withranging from pilots to maintenance workers are slashing their schedules, because at the very time they want to add to the number of their flights and routes, they can't. JetBlue has already cut 27 routes for the summer. Delta just announced they were cutting 100 flights a day for the summer. Southwest has jettisoned about 10% of its flight schedule.
With increasing demand and dramatically diminishing supply, air fares have nowhere to go but up.
At the beginning of this year, airline ticket prices were rising at the rate of 7% a month — which was expected as demand started to rise. But now, airline fares are going up about 7% every four days, and that's compounded. Six weeks ago, a roundtrip fare between Los Angeles and San Francisco — a flight that lasts about 38 minutes — was $93. Last week, that same flight cost $350. For a family of four in Los Angeles who wants to visit San Francisco, airline tickets jumped to more than $1,400.
The result? That family is going to drive. And for many Americans, trips of under 600 miles are now being done by car, in spite of— which hit and which AAA said stood at an average $4.59 ahead of the holiday weekend.
Still, airline flights are full — in spite of inflation approaching a 40-year high. And Americans are still poised to spend even more on summer vacations than ever before.
In one recent survey by Allianz Insurance, travel spending by Americans will near the $200 billion mark — a record that represents a 26% increase over last year and a whopping 229% increase over 2020. Americans are expected to spend an average of more than $2,600 per person on summer vacations this year, a 30% increase from pre-pandemic levels.
That suggests consumers haven't reached a tipping point where travel is so expensive they won't or can't leave home. Instead, Americans seem to be making a conscious choice to forgo other spending — a few expensive restaurant meals, a new car, new clothes — but won't be denied a summer trip.
The few deals out there are outside the U.S., in part because of fear related to events in Ukraine and partly thanks to the power of the U.S. dollar against so many foreign currencies.
Travel to Europe right now is down, because many Americans are worried about Ukraine. What is happening in Eastern Europe is affecting international travel to Western Europe, which has become a buyers' market. For the moment, much of Western Europe is on sale, as long as you book in the next week or so.
For example: Travelers who book before June 1 can fly this summer between Chicago and Dublin for just $436, Philadelphia to Amsterdam from $520, San Francisco to Paris for just $720.
By comparison, the least expensive JFK to LAX ticket? $610.
And the U.S. dollar is at its strongest point in 20 years against many currencies. Recently, the Euro dropped as low as $1.03, the lowest exchange rate in five years, and was at a low $1.06 on Friday. That puts many EU countries in the bargain category.
Then, add in the power of the U.S. dollar against currencies that have consistently been devalued over the past three years: the Argentinian peso, the South African rand and the Turkish lira. The lira has been devalued so much recently that a summer vacation this year to Turkey — on average — will cost you about 36% less than last year, which was already discounted.
The real travel savings of a strong U.S. dollar come in the basic goods and services that the locals purchase. Don't think just about airfares and hotels; think about restaurant meals, a tube of toothpaste or a taxi ride.
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