Even as bigger price drops await in the fall, superheated summer prices are already starting to cool.
The national average for a gallon of gas on Monday was $4.21, a 14-cent drop compared with a week ago and a 63-cent plunge from a month ago, according to AAA. That’s still more than $1 a gallon higher than it was a year ago.
After months of increases, consumer price data showed that airfare dropped 1.8 percent in June from the month before, and lodging rates fell 3.3 percent, according to the U.S. Travel Association’s travel price index.
In a pricing forecast released Monday, travel-booking app Hopper said domestic airfare would drop to an average of $286 round-trip this month, down 25 percent from the peak cost in May.
A drop from summer to fall is normal, but this big of a decline isn’t, said Hopper’s lead economist, Hayley Berg.
“Typically, we would see maybe a 10 to 15 percent price drop,” she said. “And it really has more to do with how high prices were this summer and less to do with what’s going on this fall.”
Airfare prices peaked higher than expected in May and June, she said, thanks to spiking jet fuel prices, high demand and limited capacity.
Hopper said Monday that there’s some good news for hotel guests as well: The average cost of a night’s stay has dropped slightly from a high of $199 in mid-June to $185 now. The company expects hotel rates to keep dropping this month before ticking back up in September and October.
Travel analyst Henry Harteveldt, president of Atmosphere Research Group, said a slowing economy will typically lead travel companies — cruise lines, hotels, airlines, rental car companies — to cut prices if demand drops. But he warned that travelers shouldn’t expect pre-pandemic prices.
“Unless the bottom falls out of the economy, which it doesn’t appear it is going to do right now, I don’t think that we will see travel prices fall to levels below those seen in 2019 or before, at least within the U.S.,” he said.
He said that if the dollar remains strong against the euro, leisure travelers in Europe may pay relatively less than they did in 2019 for hotels, food and entertainment.
Scott Keyes, founder of Scott’s Cheap Flights, recommends traveling in late summer or early fall even for reasons beyond lower prices. The travel chaos of earlier this summer, for example, is likely to be less of an issue with fewer crowds.
“That’s just because there’s far less strain on the system in the fall,” he said.
Keyes said the weather is still generally good in the Northern Hemisphere in September and October (although hurricane season might throw a wrench in plans) and the experience of exploring new places, or revisiting favorites, can be more enjoyable.
“The number of other tourists drops to a fraction because of the academic calendar, so you’re going to have much more breathing room, much less competition when it comes to not just airfares, but hotels, car rentals, activities,” he said.