by Donald Wood
Last updated: 9:10 AM ET, Wed May 10, 2023
New data shows that companies within the travel industry are
sacrificing sales volume in favor of higher prices ahead of the busy summer
season.
According to Bloomberg.com,
Corbu LLC’s Samuel Rines said the latest earnings results from travel companies
revealed that the “price over volume” strategies adopted during the coronavirus
pandemic were still being implemented.
With the busy summer travel season approaching, the combination
of capacity constraints—due to pilot shortages and supply-chain issues—and strong
demand have resulted in higher
prices for domestic and international flights.
The report showed that airfare for overseas service was 35
percent higher than last year and 24 percent more than pre-pandemic costs.
As for the hotels and resorts industry, prices at hotels in
the United States increased by more than 10 compared to the same period last
year, while occupancy percentages grew by only six percent during the first
quarter of 2023.
The hotel industry is taking advantage of the lower
occupancy by reducing room cleanings and electricity use to save money, while
increasing prices to compensate for the potential losses associated with empty
rooms.
A report from February showed that airfares
in the U.S. rose by 26 percent compared to the same period in 2022, with the
price increase outpacing the 6.4 percent year-over-year jump for the all-items
index.
Another study from earlier this year found that higher
travel prices are here to stay, at least for a while, travel advisors said,
who noted that rising costs do not appear to be affecting their clients'
vacation plans in any dramatic way.
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