The pool at Turtle Bay Resort on Oahu’s North Shore.
Amanda Macias | CNBC
Consumer prices for hotels, motels and other accommodations fell nearly 5% in November compared to October, according to the government’s latest inflation report, in a sign that picking up travel demand has lost some momentum from the summer.
Airline ticket prices also declined on a monthly basis by 0.6%. However, the hotel, motel, and accommodation price index was 3% higher than it was a year ago, while airfare was up 36%.
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The slowdown comes in a year when the travel industry has enjoyed significant tailwinds after a tumultuous two years due to Covid. Even pent-up demand for travel began to encroach on retail momentum as pandemic shoppers turned into post-pandemic commuters.
But with a possible recession looming, lower travel prices in November could be a harbinger of a further decline in demand.
The travel industry has seen a slump in demand since the summer boom. Jet Blue On Tuesday, it said in a regulatory filing that the strong demand it had projected in its previous financial forecast “delivered below expectations.” The airline’s updated forecast places its growth “at the lower end of its prior guidance” with revenue increasing 15% to 19%.
Scott Kirby, CEO of United Airlines, also noted the drop in demand. He said in an interview with CNBC last week that demand for business trips “has leveled off even though our total revenue is still going up.”
Even with the decline in travel demand, revenues in the industry have remained stable due to higher prices. Flight bookings over Thanksgiving fell 7% compared to 2019, but higher fares allowed revenue to increase 3%, according to Adobe data.