Travel Demand Is Slowing Down, Bringing Lower Flight Costs and Hotel Perks

Revenge travel after the darkest days of the pandemic contributed to travel roaring back across the globe, with airlines, hotels and cruises reporting double-digit growth and travelers using their savings, taking on debt or even selling their homes to splurge on bucket list adventures or multiple trips.

Now, at least for some travelers, that furious vacation spending is slowing down. While high-income travelers are still booking luxury experiences and jet-setting abroad, other consumers have been cutting back on travel spending to meet the high cost of living.

Data from Tourism Economics (on behalf of the U.S. Travel Association, a travel group) shows that the meteoric rise in post-pandemic travel spending that began in 2021 has reached a plateau. In earnings calls this month, top hotel chains like Hilton and Hyatt reported less demand by leisure travelers for lower-priced brands, while online travel agencies, like Expedia Group and Booking Holdings, and short-term rental companies like Airbnb also noted slowdowns.

For those still seeking a vacation or two, that softening demand means bargains — in the form of lower airfare and hotel perks.

“The revenge travel effect is finally receding, and so are prices,” said Steve Hafner, chief executive of the Kayak search engine, adding that the fall season will be an ideal time for travelers to “snag up a deal.”

Lodging costs stay steady, but perks abound

The hotel industry in the United States has reported a mostly flat performance this year, according to CoStar Group, a real estate analytics company.