Summer travel preview: Airfare, gas, hotel prices, and more

Airline industry data shows that prices are decreasing for many domestic and international destinations. This is despite airlines feeling threatened by delayed deliveries of Boeing planes following an accident in January when a door plug exploded on an Alaska Airlines flight.

Here's what we have in store for your summer vacation:

Airlines are optimistic

Major airlines are predicting record demand. “We're going to have a record spring and summer travel season,” Delta CEO Ed Bastian said during an April earnings call.

That's already visible in the number of people passing through airport checkpoints, which have increased an average of 6% so far this year compared to 2023, according to the Transportation Security Administration.

“We're expecting a pretty normal summer this year,” said Haley Berg, an economist at Hopper. “I think the revenge trip is over and we're back to normal.” Consumers are more price-sensitive than they were last year, Berg said, adding that supply and demand are coming into sync.

Even better news for air travelers is that flight delays and cancellations have decreased over the past few months compared to the same period in 2023, according to Flight Aware data.

However, airlines and travelers are not out of the woods. Boeing's production problems mean airlines will fly fewer new planes. TD Cowen analyst Helaine Becker said: “Given capacity constraints and the fact that demand is above 2019 levels, but capacity is not available in all markets, I think people should be prepared to wait longer than usual at security checkpoints.”

A new Department of Transportation rule announced by President Joe Biden in April will make it easier to get cash refunds if your flight is delayed or cancelled. If you paid for Wi-Fi but it wasn't working during your flight, you can also get a refund.

Domestic flight tickets can be cheaper if the timing is right.

Vacations in all 50 states actually got cheaper this summer, at least in terms of airfare, with the average round-trip ticket costing $305, down 6% from 2023, according to travel site Hopper. The site's low price forecast is in line with the latest inflation report, which shows a 7% decline compared to March 2023.

Ticket prices peak in late June ahead of the July 4th holiday, but the lowest fares, averaging just $279 round trip, are available to travelers who can postpone their vacation until late August. This year's top trending destinations include Lihue, Kauai, Hawaii, Portland, Oregon, and Fairbanks, Alabama.

Summer is the perfect time to travel abroad on your bucket list

As revenge travel subsided, airfares to many international destinations also fell. The best deals are on long-haul flights to destinations such as Australia, New Zealand and Polynesia, which are down 16% year-on-year, according to Hopper data. Prices for flights to Europe, Mexico and Central America have also fallen by an average of 8%.

Green light for road trippers

Nothing puts a damper on long trips like the $5 a gallon of gas most Americans endured in the summer of 2022. The chances of that scenario happening this year are very low. “We expect this summer to be about the same as last year, with prices in the mid-$3 range in most locations, with the exception of California, where prices will remain “That's about $50 more than the national average.”

Gasoline prices so far this year are about the same as in 2023, according to AAA data. “One of the wild cards is hurricane season,” said AAA spokesman Andrew Gross. Barons. Forecasts call for an active hurricane season in the Atlantic Basin. Gross noted that a major hurricane could knock out power and shut down refineries, which could cause prices to rise.

Another concern, Gasbadi's De Haan added, is if the Israel-Hamas war escalates to the point where it affects the region's major oil producers.

Hotels, rental cars, etc.

When it comes to hotels, mid-June and mid-August are the cheapest to stay, with the lowest price on August 15th being $228 per night, compared to the high of $263 on July 25th, according to Hopper data. Among popular destinations in the United States, Las Vegas and Orlando offer the best value at around $150 per night. Orlando has the cheapest car rental rates per day, averaging just $20 per night.

Savvy travelers know that the absolute best way to save on a summer trip is to postpone it until fall, when prices are 30% lower than in peak months. If that's not possible, look for flights departing on a Tuesday or Wednesday, avoid peak times like Independence Day, and try to book the first flight of the day to minimize delays. And as mom always says, don't forget to bring sunscreen.

have a nice trip.

Email Anita Hamilton at anita.hamilton@barrons.com.