What: Travel Costs See a Monthly Dip for the First Time Since April 2020
The U.S. Travel Association’s monthly Travel Price Index (TPI) report shows that prices dropped significantly in July, a welcome change after a record-breaking summer travel season defined by sky-high rates and massive disruptions.
Prices that took a dive between June and July include car rentals (-9.5%), airfare (-7.8%) and hotels (-3.2%). The cost of gas also dropped significantly — down 7.6% in July vs. June.
Why It Matters: Although Rates Are Dropping, Consumers Shouldn’t Expect ‘Cheap’ Travel Anytime Soon
This decrease represents the first dip in travel prices since January, and the largest overall decline since April 2020. The news may provide a whisper of relief for clients pulling out their wallets for car rentals, airfare and hotels, but it’s only part of the full economic picture: Although travel prices dipped from June to July, the price of other consumer goods, measured by the Consumer Price Index, remained unchanged over the same period.
Travel advisors should warn clients that prices may not return to their pre-pandemic levels anytime soon; when compared to 2019, prices for airfare, motor fuel and accommodations are still trending high.
Fast Facts: How the TPI Compares to the Consumer Price Index (CPI)
- The Travel Price Index measures the cost of travel (in the United States) when going away from home, according to U.S. Travel.
- The Consumer Price Index is a monthly report based on price changes collected by the U.S. Department of Labor, which measures the price of consumer goods and services.
