For a long time, the wealthy had the market cornered on leisure. A well-off person in the 18th and 19th centuries might go for a horse ride in the park or take a Grand Tour through Europe; in the Gilded Age, they might go away to a socialite’s weeklong house party in Newport in the […]
For a long time, the wealthy had the market cornered on leisure. A well-off person in the 18th and 19th centuries might go for a horse ride in the park or take a Grand Tour through Europe; in the Gilded Age, they might go away to a socialite’s weeklong house party in Newport in the dog days of summer. Meanwhile the working class, well, worked. It’s only in relatively recent decades that a vast world of affordable relaxation and entertainment opened up to people of all classes, whether that meant going out to eat or taking a trip — which became more accessible as commercial flights got a lot cheaper in the late 1970s. Only in the mid to late 20th century did the idea of a family summer vacation become a symbol of the good life that the American middle class could enjoy.
That’s still true, but something has changed in the last few years. The budget vacation is a crappier experience than it used to be.
As with everything else in an inflationary economy, it’s more expensive to travel now than it was in 2019. But it’s not just about higher prices; there’s a growing divide in how the haves and have-nots jet around — maybe in part because more affluent travelers are increasingly willing to shell out extra money for maximum comfort. Today, if you have money to throw around on vacation, you’re spoiled for choices that unlock shorter wait times or better, roomier plane seats. Meanwhile, if you’re on a tight budget, your vacation is likely to feel especially overpriced for how shabby the experience is.
Whether or not something has gotten “too expensive” is relative to a lot of factors — like how much money you personally have, how fast prices have risen, how much value the product or service brings you, and even how much the cost of other things in the economy have gone up. The reality is that travel prices haven’t soared quite as much as other sectors — they’re up by about 10 percent since 2019, which is a lot lower than the inflation we’ve seen in, say, food prices. “General prices are up about 23 percent over that same time period,” says Sally French, a travel expert at NerdWallet, which has been tracking travel inflation since 2019.
According to NerdWallet, flights are actually 6.3 percent cheaper than they were in June 2019. But other subcategories of travel have bounced up: Hotel prices are up 11.6 percent, rental car prices are up 33 percent, the price of entertainment experiences such as movies, theaters, and concerts are up 21.4 percent, and dining out is almost 30 percent higher.
One reason people may feel that travel prices are at all-time highs, according to French, may be because they’re still trying to book trips fairly last-minute — which was relatively cheap to do during the height of the pandemic, when demand was way down. It is not cheap to do that anymore. Another possibility is “recency bias,” says French. In early 2021, the average inflation-adjusted fare out of Atlanta, for example, was $298.52, according to the Bureau of Transportation Statistics. As of early 2024, it was $417.79. Our set point for what a flight should cost might still be stuck in 2021.
Then there’s the bang-for-your-buck to consider. Base fares have fallen since 2019 — as in, what you might see before checking a bag — but more airlines have been adding bag fees as well as raising existing ones. These extras, called “ancillary fees,” have been making up an ever-larger share of airlines’ revenues, jumping way up around 2022 and last year amounting to nearly $118 billion globally, a record high for the industry.
“We are seeing a trend of what we call ‘unbundling airfares,’” says French.
Low-cost (think Southwest, JetBlue) and ultra low-cost (Frontier, Spirit) airlines long ago unbundled everything in their fares in order to offer the cheapest, most spartan experience possible to travelers on a tight budget. Then they charged ancillary fees to a smaller portion of their passengers to make a profit. But since the late aughts, a growing number of full-service airlines — including all major US carriers except Southwest — have also unbundled what’s included in a basic plane ticket, blurring the distinction between full-service and low-cost carriers.
In other words, fliers today are paying a slightly lower base fare for a worse flying experience compared to the bygone years when a full-service airline ticket included checked bags and seat selection — the travel industry’s version of skimpflation. Though airlines make a lot of money from extra fees, according to a recent YouGov survey, most consumers claim that they probably wouldn’t consider paying for any flight extras — the most tempting was choosing their own seat, the least was being in an “adult-only zone” on the plane. Only about 16 percent of US travelers said they would pay for extra baggage.
It’s not just the experience of flying that feels lousier, either. Many hotel chains have reduced their daily housekeeping services, leading to grousing about cleanliness — a factor arguably more important to travelers post-pandemic. Hotel resort fees have become more common, too. The average price of booking an Airbnb has soared since 2019, including the cleaning fees that often come with a short-term rental. Listings without exorbitant cleaning fees might be saddled with a long list of chores guests should complete before they leave: loading the laundry, taking out the trash, putting fresh sheets on the bed — the stuff you take a vacation to get away from. Once you’ve arrived at your destination and are ready to see the sights, you’ll likely be paying more than travelers once did for tourist attractions. Disney World, for example, used to offer a service where all guests could skip the line at their favorite ride by making a reservation. Now doing so requires an extra purchase beyond your admission ticket. TSA PreCheck lines, which cost $78 for five years, are also getting longer, making it less valuable to pay for the skip-the-line service.
On the other hand, people with money to burn now have more opportunities than ever to be upsold. Maybe you can’t afford the first-class cabin, but what about premium economy? Or basic business? Or $100 per hour to rent a bed during a long-haul flight? Frontier lets you pay to keep the middle seat open. Why not pay the $500 annual fee on a credit card that will get you in the door of a new airport lounge, which in 2024 has become an inexplicably luxe space occupying tens of thousands of square feet?
“What this shows is that travelers are willing to trade up,” says Henry Harteveldt, president of the travel industry market firm Atmosphere Research Group.
“We all know there’s no God in economy”
henry harteveldt
If you have the money, why wouldn’t you? “We all know that coach sucks, we all know there’s no God in economy,” says Harteveldt. By stripping away services into disparate add-ons, airlines have ensured that basic economy is a dismal experience, which in turn makes it more likely for travelers with discretionary income to justify spending more for comfort and sanity.
People are willing to spend more extravagantly than ever for luxury travel, too. Carl Junior, a senior luxury travel curator at Scenset, an agency that creates custom luxury travel itineraries for wealthy clients, says there’s been an uptick in the number of people interested in its service since the pandemic — particularly intergenerational families looking to take a big trip together. Such custom itineraries often range between $10,000 to $100,000, sometimes more. “They definitely are willing to spend a lot more just for that ease and comfort of travel,” Junior says. The pandemic shook up people’s priorities; those who can afford to want all-out, once-in-a-lifetime trips.
Private jet travel has soared since the pandemic, and while cruises are in high demand overall right now, luxury cruises have seen an especially huge bump in bookings. High-end hotels are seeing faster revenue growth than mid-range and budget hotels; more are opening up to meet demand, which means luxury lodgings are making up a higher share of total available hotel rooms. Data from CoStar, a commercial real estate data company, shows that luxury hotel occupancy in 2024 was slightly higher than this time last year, while occupancy of budget hotels was 3.4 percent lower.
Summer is the most popular time to travel, but in a recent Newsweek survey, nearly 45 percent of respondents said they’re not taking any trips this season, with about half of that group citing cost as the reason. The results echo other surveys showing that Americans are pulling back on travel spending. The profile of someone who does travel over the summer has become slightly more affluent, too: According to Deloitte, in 2023 about 31 percent of Americans who made a summer trip were people with an income under $50,000. In 2024, this group makes up just 19 percent of travelers.
The average income of the leisure traveler today is about $95,000, according to research from Atmosphere. The average income of the budget airline traveler, in contrast, is $79,000 — which is higher than the $73,000 to $74,000 range it was a few years ago. “There definitely is a group of people who are not flying as much, or perhaps at all, because right now their budgets simply don’t allow them to do so,” says Harteveldt.
Income has always been tied to the ability to travel. While most Americans have flown by air at least once in their life, college graduates — who typically earn a lot more money than people with a high school diploma — are vastly more likely to have visited multiple foreign countries. A Statista survey in 2015 showed that almost one-fifth of households earning more than $80,000 per year were frequent air travelers, while just 3 percent of those making less than $40,000 said the same. Around one-third of the lowest-income group said they had never flown, compared to just 7 percent of the highest-income group. Another 2017 survey showed that the majority of those making under $35,ooo had never taken an international vacation.
Today, traveling well is available in more flavors and increments, but that also means there’s more of a chasm than ever between upgraded vacationers and those who can only afford the bare-bones fare, if that. The ceiling of travel experience is higher, and the floor is lower. There are few places that make class divides more apparent than the airport.
