At GuideSpring Wealth Strategies we value your financial freedom. Starting your financial plan for retirement early will allow you to do the things you love like traveling. With the recent pandemic restrictions being lifted, the travel industry has begun to see growing demand as we move closer to summer. Although the opportunities to get back out there are growing, not all travel will be the same, as much of the demand is directly related to the reduced CDC restrictions. Instead, industry trends have emerged based on individual comfort levels as they apply to different modes of travel.
Below we will explore some of the factors that have contributed to an increase in travel and how different industries are responding to it.
Since the new year, interest and comfort in flying have steadily increased from 29 percent to 44 percent of individuals.3 Furthermore, the number of individuals passing through TSA has gone up significantly, from around 100 thousand people a day in April 2020 to over a million people a day in April 2021.4
Comfort and the increased number of travelers have also affected the way airlines are beginning to respond. For example, Delta Airlines stopped blocking off the middle seat of their flights at the beginning of May 2021.5
Though this information shows a growing level of comfortability in airline travel, it must be compared to previous years to help gauge where the industry is at. For example, over 2 million people passed through TSA a day in 2019.4
Another big difference to consider is domestic versus international travel. As of April 2021, 36 percent of individuals plan to fly domestic, while only 21 percent plan to fly internationally.3 This, along with the data above, indicates that individuals are becoming more accustomed to the idea of flying, but would be more comfortable with a flight within the United States.
Avoiding large crowds and staying isolated makes a road trip an ideal alternative. However, individuals may find this difficult or more expensive than expected. Some car rental companies sold portions of their fleets in response to economic challenges created by COVID-19.6 Furthermore, the Bureau of Labor Statistics reported a 16.2 percent increase in car and truck rental costs for April 2021.7 With summer approaching and people traveling the demand for car rentals are higher than the supply. Rental cars are an in-demand item, and you should be prepared to pay a premium on them this year.
However, this does not mean that road trips are out of the question. Around 49 percent of individuals plan to book a hotel in the next three months.3
Cruises remain the least likely to see improvement during summer. Not unsurprisingly, only 19 percent of individuals plan to take a cruise in the next three months.3 This, coupled with the challenges of 2020, means the cruise industry may continue to face economic difficulties throughout the remainder of 2021.
The travel industry is recovering from the economic downturn of 2020. And though the industry is experiencing growing demand as we near a post-pandemic world, it is nothing close to what it was in 2019 and prior years. Those planning to travel should remain up-to-date on guidance from the CDC and review the U.S. Department of State’s information and travel restrictions before finalizing their plans.
The growing demand for travel and increased inflation will impact the prices of everything from plane tickets to car rentals and hotel stays. Since August there have been price surges in lumber, food, car rentals, oil, and overall physical goods. Overall inflation is running at 4.2% the largest 12-month increase since a 4.9% increase for the period ending September 2008.7 If you’re planning a summer vacation, book your plane tickets and rental cars now, as prices will increase.
Feel free to reach out below if you want to talk about setting up a financial plan for your retirement, or if you have any questions about how inflation may be effecting your summer plans.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.