Business

This Memorial Day weekend, Americans are still having a good time despite inflation.

Inflation isn’t keeping Americans from having fun this Memorial Day weekend
Inflation isn’t keeping Americans from having fun this Memorial Day weekend
Written by Newils
69 / 100

Before Memorial Day weekend, travelers pass through Hartsfield-Jackson Atlanta International Airport.

Even though Americans are weary of paying exorbitant rates for almost everything in their lives, the travel bug hasn’t been squelched by inflation yet.

And this Memorial Day weekend may serve as an example, as record-breaking numbers of people are predicted to visit the area.

At TSA checkpoints, roughly 2.9 million passengers were scanned on Thursday, making it the second-busiest day ever for US airports.

According to TSA, Friday was predicted to be considerably busier.

There won’t be any less traffic on the ground because, according to AAA, a record 38.4 million people will drive during the long weekend.

More than three years of high inflation have had a negative impact on Americans’ thoughts and finances. However, some people are still prepared to spend money—if not splurge—on leisure and vacation, despite the fact that they may be tight on cash.

Gus Faucher, chief economist at PNC Financial Services, told CNN on Friday that “the truth is that although people complain about the economy and complain about inflation, overall, households are in very good shape in the United States.”

Travelers move through Hartsfield-Jackson Atlanta International Airport ahead of Memorial Day weekend.

After peaking at 9.1% in June 2022, inflation has drastically decreased over the last two years. As per the Consumer Price Index, in April, the yearly rate was 3.4%.

However, it remains much higher than pre-pandemic levels. The CPI measured 2.3% annually in February 2020. Price increases are still very painful, especially for customers who are most affected (their food, shelter, and transportation). But salaries are rising faster than inflation, and the job market is as robust as it has ever been.

See also  $366 million was fined to Oreo maker Mondelez for manipulating European markets.

According to Faucher, “people feel like they’re not keeping up when they see [high gas] prices.” But in actuality, they are. The statistics on consumer spending make that extremely evident.

Purchasing tickets for Mickey and taking off for Taylor

The Commerce Department’s statistics indicates that consumer spending has been rising for the past 12 months. Furthermore, the repercussions of the epidemic are still being felt: Americans are using credit and cash to fund adventures.

Revenue from Disney’s parks and experiences increased by almost 11% in the second quarter compared to the same period last year. The firm reported that although attendance at its US and Hong Kong Disneyland resorts isn’t as high as it was after the Covid pandemic limitations ended, it is still on the rise.

It’s not only Disney, though; as summer approaches, consumers’ desire to travel is predicted to grow even more.

“We see a record spring and summer travel season, and demand is still strong,” Delta Air Lines CEO Ed Bastian stated in a teleconference with analysts last month. “Travel continues to be a top purchase priority for Delta’s core consumers, who are in a healthy position.”

Additionally, United Airlines stated in April that it anticipates record passenger numbers for the summer from the carrier and the industry as a whole.

Give Ms. Swift some credit for that. This week, United and Delta announced that there is an increasing demand for Taylor Swift’s “Eras Tour” destinations in Europe.

In that sense, there is some positive news regarding inflation: According to CPI data, airline fares decreased in April from March and are actually down little more than 1% from February 2020.

See also  Proxtera and Fidelity Bank Strengthen GIFE Platform SMEs

Expenditure via land and sea

According to a recent Mastercard Economics Institute analysis, cruise transactions—which include bookings and spending on board—were 16% higher in the first quarter of this year than in the same period last year.

According to the Mastercard analysis, “persistent price increases in the hotel industry” could be the cause of the surge in cruise spending. Cruises are now “a relatively more budget-friendly option in many cases” as a result.

However, a lot of big hotel companies claim they haven’t noticed a big decline.

As an example, Marriott International increased its profitability guidance for the entire year in the first-quarter results that were released on May 1. Global revenue per available room for the corporation increased 4.2% over the previous year.

“We continue to project strong travel demand and the persistence of current macroeconomic patterns,” Marriott Chief Financial Officer Kathleen Oberg stated in a conference call with analysts.

The heyday of the economy may not last very long.

But nothing endures indefinitely.

This earnings season, several significant businesses in the travel sector have reported similar trends. Americans have reduced their purchases at stores as pay growth has not kept up with good inflation, particularly among lower-class customers. They’ve even learned to be economical when it comes to experience-based spending, such as eating out and choosing to stay home instead.

However, several business leaders have issued a warning, stating that while travel was more popular immediately following the lifting of the COVID pandemic limitations, this surge is now tapering off.

See also  In March, US housing prices reached yet another new high.

The unstable state of the economy is another possible source of trouble. Savings from the pandemic have been depleted, and household budgets are being negatively impacted by persistent and high rates of inflation. The labor market has exhibited impressive resilience in the face of interest rate hikes by the Federal Reserve, yet in April, it began to decline.

Due in part to the first quarter’s slower-than-expected growth in gross bookings, Expedia Group decreased its full-year guidance.

This month, CEO Peter Kern told analysts, “We saw a healthy but more normalized market environment for travel globally.” “The pandemic-driven recovery is mostly over.”

Inflation isn’t keeping Americans from having fun this Memorial Day weekend

Inflation isn’t keeping Americans from having fun this Memorial Day weekend

Other stories

About the author

Newils

Verified by MonsterInsights