U.S. booking sites including Vrbo, Hopper, and KAYAK are seeing higher demand for spring and summer leisure travel as COVID-19 restrictions ease and travelers appear to be shrugging off added costs to plane tickets and road trips from rising fuel prices.
“We are seeing strong booking activity for spring break and the beginnings of a very strong summer,” said Jamie Lane, VP of research at AirDNA, which tracks the daily performance of over 10 million properties on vacation rental firms Airbnb and Vrbo.
Oil has soared over $100 a barrel as Russia’s invasion of Ukraine jolted global markets. But U.S. carriers including Delta Air Lines Inc., United Airline Holdings Inc., and American Airlines Inc. this week reported a strong rebound in travel demand after the blip caused by the Omicron coronavirus variant.
AirDNA data said the booking pace for travel in the northern hemisphere spring is 49 percent higher than this time last year, and 26 percent higher than pre-pandemic 2019.
“The rush to book summer vacation homes has further accelerated in 2022,” said Vrbo in a statement earlier this month. The vacation rental booking platform reports demand for properties is already outpacing last summer by 15 percent.
“When reviewing the booking data, it’s clear that Omicron was a bigger concern for travelers than rising fuel costs,” said Dakota Smith, Chief Strategy Officer at Hopper, a travel booking app.
The app, which is popular among younger travelers, has seen a 50 percent increase in travel booking since fourth-quarter 2021.
Airline carriers are counting on strong demand to deal with the rising fuel costs. Some airlines intend to pass along a majority of that increase to customers.
“As gas prices reach record highs, jet fuel prices may not be far behind … this summer travel season may be a pricey one,” said Paul Jacobs, GM and VP of KAYAK North America. Flight prices were up 17 percent last week compared to the same week in 2019, according to KAYAK.
The rising fuel costs will have less impact on domestic and short-haul flights, though, and indications are that the pandemic-era preference from U.S. travelers for those trips is continuing, and may remain while the war in Ukraine drags on, said Hopper’s Smith.
Hopper said U.S. bookings to Europe have dropped from 21 percent of Hopper’s international bookings to 15 percent since Feb. 12, with international bookings shifting toward Mexico, Central America, and the Caribbean. These locations now represent 61 percent of Hopper’s international bookings, according to Smith. Europe accounted for approximately 30 percent of Hopper’s international bookings in 2019.
Business travel and travel to urban locations has yet to recover to pre-pandemic levels, according to AirDNA.
Investors will also get another view on the recovery of leisure travel when Carnival Corp. reports earnings on Tuesday. Carnival on average is expected to post a loss of $1.21 a share, while revenue soars to over $2 billion, according to data from Refinitiv.
By Doyinsola Oladipo