Americans are on the move again, encouraged by the rollout of COVID-19 vaccines. And that could be bad news for anyone hoping to score a deal on a summer vacation this year.
More than 1.28 million people travelled through Transportation Security Administration checkpoints at airports on Thursday, according to data released by the government agency.
That’s the third-largest number of people to pass through airports in the U.S. since mid-March of last year, when public health officials warned against travel as the number of COVID-19 cases across the country soared. The only two days that saw more travelers occurred around the Christmas and New Year’s holiday season.
The milestone comes even as health officials have held steady in their warnings against travel. When the U.S. Centers for Disease Control and Prevention released its interim recommendations for people who are fully vaccinated against COVID-19 this week, the agency notably did not update its guidelines for travel.
But millions of Americans have been vaccinated against the virus that causes COVID-19, leading to a drop in case counts. “The fact that TSA checkpoint numbers continue to climb 5% every week underscores the optimism that travelers are feeling across the board,” said Scott Keyes, founder and chief flight expert at travel website Scott’s Cheap Flights.
Seniors, in particular, are taking to the skies. Citing recently-released credit-card spending data from Bank of America BAC, +1.49%, Keyes noted that seniors are booking flights at three times the rate of millennials right now. Senior citizens were among the first to have access to the vaccines.
“With vaccinations accelerating and all adults eligible for the shot by May 1, their world will soon be all our world,” Keyes said.
What will happen to discounts as more people start to travel?
As of now, discounts are still available. Among the eye-popping deals Keyes found are $199 roundtrip flights to Alaska and $179 rountrip airfare to Cancun.
But that won’t be the case forever, and most travel experts recommended that vacationers make their spring and summer travel plans sooner rather than later.
“There are definitely still some discounts out there but they are primarily with companies who are not adjusting fast enough to the demand spike that is happening right now,” said Jordan Staab, president of travel website Hopjump. “We are advising all of our subscribers to book travel as soon as possible and scoop up the deals while they last.”
A number of factors are expected to lead to a jump in airfare prices in the near future — and the growing number of vaccinated Americans is only one of them.
“ ‘There are definitely still some discounts out there but they are primarily with companies who are not adjusting fast enough to the demand spike that is happening right now.’ ”
Part of the problem is that carriers reduced their capacity in light of the pandemic. Airlines took planes out of service and reduced the number of flights they run daily to trim their losses with so few people traveling. These companies can’t simply flip a switch and return things to normal because more people now want to travel.
“Domestic flight numbers remain down about 30% compared to 2019 in April — in other words, supply is down and if demand spikes, fares will go up,” said Edward Russell, an airlines reporter with travel-news outlet Skift.
Gas prices are another factor. This week, gasoline futures — which are contracts that guide the prices of the fuel in upcoming months — hit the highest closing price in over two years earlier this week. Travel is expected to resume broadly overall, meaning there’s more demand for fuel. Airlines will eventually begin to bake the price for those higher costs into the airfares they present to customers, Staab said.
Another factor airlines need to consider as they price future flights is the glut of vouchers they provided over the past year. Rather than refund cash to customers who cancelled trips because of the pandemic, in most cases airlines offered vouchers instead. In some cases, those vouchers carry 2021 expiration dates. And either way, people holding onto those vouchers may feel better about traveling now and want to cash them in.
“Airlines are going to be looking to recoup some of their losses from the last year and will be looking to raise prices as soon as demand increases,” Staab said.
What about international travel?
“It’s worth noting that this boom is almost entirely for domestic travel,” said David Slotnick, senior aviation reporter at The Points Guy.
Right now, it’s still difficult to travel abroad because of precautions put in place to limit the spread of COVID-19. All air passengers are required by the CDC to have a negative COVID-test or documentation that they recovered from the illness before they board a flight from another country to the U.S. — even if they are American citizens.
Indeed, flight search data shows more hesitancy about traveling outside of the United States. Searches for domestic summer flights actually surpassed the pre-pandemic 2019 volume back in late February and has risen 22% since then, according to data from travel app Hopper.
But that’s not the case for international flights. Searches for these trips were still down 45% compared to 2019 levels in early March.
“While sentiment around international summer travel is improving, we likely will see a much longer recovery time horizon relative to domestic travel,” said Adit Damodaran, an economist at Hopper.