Americans slow to book summer travel amid discount hunting
Travel companies including Delta Air Lines, Marriott International, and online travel agency Booking Holdings have withdrawn or revised their 2025 annual forecasts as US demand softens. Airbnb flagged shrinking booking windows as consumers take a 'wait-and-see' approach and book trips closer to their check-in dates. That has left companies with less visibility into the second half of the year. Delta said in early April it was premature to project the full year given macroeconomic uncertainty. United Airlines said there's a reasonable chance that bookings could weaken.
'It's very clear that consumers are waiting to make decisions, including for the summer,' Southwest Airlines CEO Robert Jordan said at the Bernstein Annual Strategic Decisions Conference in late May, adding that demand was stable but lower than expected in January. US summer flight bookings are down 10 percent year-over-year, according to Flighthub, an online travel agency, even though airfares have dropped. 'You can't keep an airline seat on the shelf in a warehouse. If you don't fill that seat tomorrow and the airplane flies, it's gone,' Steve Hafner, CEO of Kayak, a Booking Holdings unit, told Reuters.
Average summer flight prices declined 7 percent, with flights to long-haul destinations like Sydney, Australia 23 percent cheaper year-over-year, according to Kayak. Hotel summer bookings in major US cities are flat-to-down year-over-year, according to data from CoStar. Average room rates are expected to rise roughly 1.3 percent in 2025, down from a 1.8 percent increase in 2024. 'Travel is certainly under some pressure because people are not feeling as comfy as they once did,' said Michael Chadwick, CEO of Fiscal Wisdom Wealth Management.
Weaker dollar
Travelers may start to find deals, such as a free third night for staying two nights, as hoteliers look to fill rooms, said Jan Freitag, national director of hospitality analytics at CoStar Group. That's what Jackie Lafferty is hoping for. Her summer plans have shifted from a possible family vacation in Hawaii or Florida to her home state of California instead. 'By the time we broke down the cost of the flights, the hotel and the rental car, it looked expensive, it felt unreasonable,' said Lafferty, a Los Angeles-based public relations director.
The dollar's weakness has driven up the cost of overseas vacations. In March, American travelers surveyed by Deloitte had planned to increase budgets for their longest summer trip by 13 percent. By April, Deloitte's survey found Americans planned on spending about the same as last year. 'The dollar is just not going as far and I think people are starting to realize that,' said Chirag Panchal, CEO of the Ensuite Collection, a Dallas luxury travel concierge.
The dollar has fallen about 10 percent since mid-January, when it was its strongest in more than two years. Panchal's clients, who had booked big trips to Europe last year, are either staying domestic or going to closer destinations like Canada or the Caribbean. 'We might go international at the end of the summer. If we do, it will be last-minute and spur of the moment based on cheaper flights,' said Rachel Cabeza, 28, an actor and fitness instructor based in New Jersey. For now, her only summer plan is a getaway to Martha's Vineyard in nearby Massachusetts. — Reuters
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