The travel industry has seen a lot of price inflation, but it’s the hidden costs that are driving up prices. The two most significant factors in this are airfare and hotel room rates. Hotels have historically been linked to natural resources like water, while airlines charge more for seats on planes with fewer empty spaces available because they’re worth more money if there is another ticket holder onboard.

The “how much has travel increased in 2021” is a question that many people ask. The answer to this question is not always straightforward. The inflation rate for travel has been increasing at an alarming rate, even when prices don’t seem to be rising.

Inflation Is Rampant In Travel Even When Prices Don't Appear To Be Rising

Inflation-Is-Rampant-In-Travel-Even-When-Prices-Dont-Appear

 

Even when prices don’t seem to be rising, inflation is rampant in the travel industry.

on November 25, 2021 by Gary Leff

Talking about inflation has been practically nonsensical throughout most of the epidemic. What has the cost of a vacation to Australia been in comparison to 2019? It isn’t limitless, but Nicole Kidman’s quarantine-free travels demonstrate that it is conceivable at some cost, even if that cost isn’t always paid in dollars. It is, however, several orders of magnitude more than it used to be, with even Australian citizens’ borders fully closed.

Prior to last summer, the cost of visiting Europe was equally high for Americans. Even though part of the expense of visiting numerous countries now includes not only flying and hotel but also immunization, the cost has decreased (whose nominal cost is paid by the U.S. government).

In American Airlines first class, on the other hand, there has been tremendous inflation since you receive less for the same money.

The notorious Lay’s potato chip incident of 2014 was a pre-COVID example of shadow inflation. Customers were paying (and Frito-Lay was making) 5.3 percent more per ounce of chips because Lay’s intentionally included about five chips less per bag, lowering content from 10 ounces to 9.5, but still charged $4.29 per bag, meaning customers were paying (and Frito-Lay was making) 5.3 percent more per ounce of chips.

…”Many sorts of organizations dealing with supply interruptions and labor shortages have coped with these issues not by increasing prices (or exclusively by raising prices), but by adopting activities that may cause their consumers to have a negative experience.”

“Goods and services are going worse quicker than official statistics reflect,” according to Cole, meaning that “our inflation issue has really been worse than official numbers show.”

In first class, American Airlines used to provide a cooked dinner; today it’s the ubiquitous shrink-wrapped turkey sandwich. On my recent Admirals Club trips, there was no made-to-order guacamole, but the price of an Admirals Club membership hasn’t changed. When the airline’s schedules change by an hour, the airline will no longer refund tickets; instead, a four-hour difference is required to be eligible for a refund.

Delta tickets are more costly at the same price point not just because of poorer inflight service, but also because when you need to talk with the airline, you pay in time rather than money. Even if you know the workaround of calling Delta’s Singapore reservations number, you’ll be charged for an international call if you use Skype or another internet phone service.

Supposed “full service” Hotels used to provide a package of amenities, including as restaurants with extended hours and extensive menus, as well as room service. They used to provide everyday housekeeping services. In other words, they used to set themselves apart from limited-service homes (which also cut down on cleaning) and home sharing. Even if you aren’t spending less, you are getting less today. The product has deteriorated in quality.

Hotel average daily prices were down 1.4 percent from the previous year’s week of October 10-16, 2021, but expenditures were down significantly more.

Rental vehicles are maybe the one sector in which increased pricing and limited availability have followed the conventional pattern in travel: if you can hire a car, it’s pricey, and then you have to hope there’s one available when you arrive. Because hotels and airlines are just supplying you with less while charging you correspondingly more costs, inflation is less noticeable.

(With thanks to Anthony H.)

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The “will flight prices go down after covid” is a question that has been asked by many people. The answer to this question is, no they will not. Inflation in travel is rampant even when prices don’t appear to be rising.

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