“For every single category in travel, prices are up with the exception of international airfare,” said Adit Damodaran, economist at the travel booking app Hopper.
While the year-over-year swing is notable, he said, hotel and domestic airfare costs are comparable to pre-pandemic levels. The U.S. Travel Association’s Travel Price Index for May similarly shows a 12 percent increase over 2020 but a slight drop compared to 2019.
“I think it feels a little unnatural because of how quickly it increased from the pandemic,” Damodaran said.
In some especially busy markets, hotel prices are averaging more than they did even before the pandemic. According to travel research firm STR, some of the costliest hotel markets in the United States — Maui and Key West, Fla. — had average daily rates that were more than $100 higher for the four weeks ending June 26 than at the same time in 2019.
The reason for the higher prices across the board in 2021? Basic supply and demand, said Henry Harteveldt, travel industry analyst at Atmosphere Research Group.
“There’s just a finite number of airplanes and airplane seats, rental cars, hotel rooms and so on, and there is an extraordinary level of demand,” he said. He said much of that demand is concentrated in the United States, driving up domestic prices, because there are still many restrictions on international travel.
Despite those sometimes unwieldy requirements — proof of vaccination, or negative coronavirus test results, or both — some intrepid travelers are seizing the moment to see Europe with fewer crowds.
“I think in a lot of ways there’s a real sort of window of opportunity for two things that are extremely rare in normal years,” said Scott Keyes, founder of Scott’s Cheap Flights. “And that’s cheap Europe summer flights and last-minute Europe summer flights. That’s in normal years such a rare bird to find.”
He said that because Europe has only recently started to reopen to Americans, flights that would have been nearly sold out by now are just starting to sell more seats.
Damodaran, the Hopper economist, noticed that dynamic in his personal travel planning. He booked a flight to visit family near the Great Smoky Mountains in Tennessee for the cheapest amount he could find — about $500. Thursday morning, he was looking at flights to Iceland and saw some for $480.
“It’s cheaper to go to Iceland than Tennessee from New Mexico,” he said.
Jack Ezon, founder and managing partner of the luxury travel agency Embark Beyond, said many of his clients are canceling the domestic vacations they already had on the books and changing their plans to go to Europe instead. He said 28 percent of clients who had booked for June, July and August are canceling and making new reservations for Europe — at a significant savings. And 72 percent of new bookings for the summer are to Europe, he said.
“Why go where there’s going to be a two-hour wait to get where you want to go, it’s going to be overcrowded, understaffed, oversold and you’re going to be hurting every time you want to do anything?” he said.
Ezon has made this switch himself: He and his son wanted to go to national parks out West but found hotels were too overpriced. Instead, they used points and flew to Italy, where they visited the Dolomites and Venice.
The room they got was cheaper, the crowds were small, the food was good, and the rental car was about 50 euros a day — significantly lower than how much rental cars have cost in many parts of United States.
“It was such a good value for us,” he said.
For travelers who are looking for value, regardless of their destination, Damodaran said flights during August and September should be more budget-friendly. He said travelers should also consider looking for flights that return on a Tuesday, which would be cheaper than coming home on a Sunday.
Comparing prices on different airlines, and even looking at alternate airports, could also help keep costs down, Harteveldt said. In some cases, an airport might be less convenient, but the price of the flight or rental cars could make it worthwhile.
“It’s going to take time for people to find the deals,” he said. “You can’t just expect to book your summer vacation in 7.5 minutes. It’s worth it to invest a little time and effort.”