Say goodbye to $ 30 plane tickets. The era of cheap flights is ending

Thinking of finally taking a vacation? You are not alone.

Millions of Americans, many incarcerated for a year, are hitting the road and flying to the skies as more people are vaccinated against Covid-19. President Joe Biden said last week that all American adults will be eligible for a vaccine by May.

As more people are confident that the Covid-19 threat is disappearing, it becomes more difficult to find the minimum fares, some in the double digits, that airlines offered when they were most desperate to fuel the planes. Hotel rates are also rising.

The travel survey website Kayak said that searches for summer travel have increased by 27% each week since Biden’s announcement and said that airfares to the top 100 most searched destinations in the U.S. have increased by 7% month on month.

“Domestic air fares are going up. While discounts can still be found, they are no longer falling into consumers’ laps,” said Jamie Baker, airline analyst at JP Morgan. “Discounted rates increasingly demand a hunt and, for many consumers who are stuck for a year, they are probably not up to the effort.”

The cheapest domestic leisure air fares, which include the promotional fares that airlines send to their inbox, were $ 59.48 on March 15, still 26% lower than a similar week in 2019, but more 6% per week, according to Harrell Associates, a company that tracks airline tickets. Average leisure rates were almost $ 187, an increase of about 5% for the week and about 9% more than a similar point in 2019.

Airline executives said on Monday that bookings were increasing in March and extending into the summer. American carriers are on track to lose an average of $ 150 million a day this quarter, according to Airlines for America, but the CEOs of United Airlines and Delta Air Lines said the increase will finally stop their cash burn in this spring. JetBlue is calling unpaid flight attendants a month earlier because of stronger than expected demand.

“As long as there is no setback, we will be on the road to recovery and we can put those days of talking about box burning, layoffs and the like largely in the rearview mirror,” CEO Scott Kirby told CNBC’s “Squawk Box”. on Tuesday.

Hotel occupancy in the United States this month through March 13 is averaging more than 51%, the highest in more than a year, according to hotel data analysis firm STR. In popular tourist spots like Miami, the occupancy is almost 70%, with average rates of US $ 228 per night, the highest prices since February 2020.

Jamila Ross, owner and founder of The Cooper Door B&B in Miami, said she discounted her January and February rates by more than 40% to $ 100 a night, but has since managed to raise them to $ 120.

Covid was particularly devastating to his hotel because it depended heavily on the cruise industry due to its proximity to the port.

She said the hotel is now about 70% full, up from 40% last month, although she is holding some inventory due to Covid.

“We want to be a responsible brand,” she said. “We cannot allow any kind of slip.”

Maura Gannon, general manager of The Mermaid & the Alligator, a nine-room hotel in Key West, Florida, said: “As soon as people are getting the vaccines, the phones start ringing off the hook.”

She said some travelers are asking about reservations in May and June, traditionally part of the low-demand season.

Some travelers are looking for sophisticated accommodations that allow them to remain physically distant from other guests.

“Villages are number one throughout the year,” said Viktoria Riley, director of marketing for Ocean Club, a Four Seasons Resort in the Bahamas. The three-bedroom villas cost $ 16,500 a night in the low season, which starts in mid-April and runs through the end of November.

To be sure, room rates and fees have fallen deeply into the pandemic and there is still business out there, especially with business travelers who are still mostly marginalized. Demand is still nowhere near pre-pandemic levels.

In the third quarter of 2020, the last data available, domestic flights in the U.S. averaged $ 244.79, the lowest value in more than 25 years, with no adjustment for inflation, according to the U.S. Department of Transportation.

Airlines, however, have drastically reduced their ability to meet weak demand, which means that there are fewer seats on the market. They should add more seats as the peak of the summer season approaches.

And with many international travel still banned, domestic leisure destinations have become the right place.

Delta Air Lines, for example, on Friday unveiled nine new destinations or increased service to outdoor vacation destinations, such as Glacier Park, Mont., And Jackson Hole, Wyo.

“U.S. travelers are being diverted in a way to the U.S. and the handful of countries that we can visit,” said Henry Harteveldt, founder of Atmosphere Research Group, a travel consultancy. “This is changing demand patterns and, therefore, changing airfare prices.”