by Donald Wood
Last updated: 10:50 AM ET, Fri April 14, 2023
Three friends enjoying a trip together. (photo via FilippoBacci / E+)
New data from the United States government highlighted the
rising travel-related costs for Americans.
According to the U.S. Bureau of Labor Statistics’ latest Consumer Price Index, underlying
inflation pressures caused a mixed report, likely ensuring that the Federal
Reserve will raise interest rates again next month.
The hotel industry reported an unadjusted rate increase of
eight percent compared to March 2022, also marking an 8.5 percent jump from
January. While the rise continues a trend of price increases, the growth rate
has slowed from the 26 percent recorded in late 2021.
Airfares in the U.S. were also up in March, with prices for
a flight increasing 17.7 percent year-over-year, while the car rental industry
saw customer cost decline by 8.9 percent from the previous year. Rental prices
declined 11.9 percent compared to July 2022.
“We expect inflation to gradually cool but remain high
through the rest of this year,” Oxford Economics chief economist Ryan Sweet
told Reuters.
“Therefore, the Fed is likely to keep rates elevated through the rest of this
year, bucking market expectations for rate cuts.”
The American
Society of Travel Advisors (ASTA) revealed in a survey earlier this week
that 47 percent of respondents ranked a vacation as their top discretionary
spend. The total is higher compared to home improvement or renovation (23
percent) and a new computer (10 percent), which ranked second and third,
respectively.
In addition, the study found the number of Americans who
intend to spend more on travel has increased by 17 percent since late 2022,
with Millennials and Gen-Z leading the way at 22 percent more likely than the
average American to spend more on travel this year.
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