The pool at Turtle Bay Resort on Oahu’s North Shore.
Amanda Macias | CNBC
Consumer prices for hotels, motels and other lodging dropped nearly 5% in November from October, in response to the most recent government inflation report, an indication that soaring travel demand has lost some momentum from the summer.
Airfares also fell month to month, by 0.6%. Still, the value index for hotels, motels and lodging was 3% higher than it was a 12 months ago, while airfares were 36% higher.
The cooldown is available in a 12 months where the travel industry enjoyed major tailwinds after a turbulent couple of years because of Covid. Pent-up travel demand even began to encroach on retail’s momentum as pandemic shoppers changed into post-pandemic travelers.
But with a possible recession on the horizon, the value declines for travel in November might be a harbinger of an additional drop in demand.
The travel industry has seen demand taper since a summer surge. JetBlue said Tuesday in a regulatory filing that the strong last-minute demand it anticipated for December in its previous financial outlook “has materialized below expectations.” The airline’s updated outlook, which also includes the impact from Hurricane Nicole in November, sets its fourth-quarter unit revenue growth “on the low-end of its prior guidance” with a 15% to 19% over 2019.
United Airlines CEO Scott Kirby, nonetheless, said that travel demand and revenue stays strong while business travel has “plateaued.”
At the same time as travel demand cools, revenues within the industry have remained stable because of higher prices. Flight bookings over Thanksgiving were down 7% in comparison with 2019, but higher fares allowed revenue to extend by 3%, in response to Adobe data.
