It has been a busy summer both domestically in the USA and around the world, but as we approach the end of the summer travel seasons it appears that more Americans are choosing to travel to Europe than in years past, with domestic travel actually declining.
US Domestic Travel Declines As Americans Choose European Travel
Alison Sider of the Wall Street Journal notes that compared to baseline pre-pandemic 2019 numbers, two interesting trends have emerged:
- The total number of domestic travelers slid 2% in July 2023 compared to July 2019
- Domestic fares are down 11% versus 2022
- The total number of transatlantic passengers rose 14% in July 2023 compared to July 2019
- International fares are up 28% versus 2019
Is this simply one final summer of pent-up demand from the lost years of 2020 and 2021 or is there something totally different going on?
Spirit Airlines’ CEO Ted Christie told the WSJ, “The current setup is simply not favorable to a domestic-focused airline.” Spirit reported weaker earnings than expected last week.
And Spirit is not alone. JetBlue has warned it may report a quarterly loss in what traditionally has been the most profitable quarter of the year and Alaska Airlines and Frontier have also warned of lower demand than forecast.
Frontier Airlines CEO Barry Biffle summed up the problem:
“When we lose 5% of our people to go to Europe, that’s a lot of customers.”
As the first full summer without onerous testing or masking requirements, the demand for European travel is understandable. Interestingly, Delta reported that 3/4 of its summer international bookings were already completed by April 2023.
The slow return of business travel is not helping, with many companies either reluctant to send road warriors back on the road or having shifted to communication via screens. It was traditionally those high last-minute or premium fares paid by business travelers that pushed domestic revenue up, but airlines are having to address a new model of hybrid work and declining business travel.
Practically, we saw Southwest Airlines recently announce it would slash service on key business routes on weekdays, citing low demand. This sort of pattern shows no signs of slowing down, though this winter will be an important test case.
CONCLUSION
Americans are shunning domestic travel for Europe. But is it this summer–the first real summer of hassle-free travel between Europe and the United States–an outlier or the new norm? And will domestic travel spring back? That remains to be seen. But as Biffle said:
“We have not made an assumption that this environment changes before we get into the heart of winter. Although I do know that once we get to January, February, it’s a heck of a lot better to be in Florida than it is in most parts of Europe.”
That’s one safe assumption…
What a surprise!! Look at hotels and restaurants prices across the US and compare that to Europe. Night and day.
It’s a very good point. That may catch up eventually, but even with a stronger EUR this year Europe is just much cheaper without the nickel and diming (and tipping).
You have no idea how much cheaper is to eat in places like Italy, Greece, Spain, Portugal and even France when compared to the US. Food quality is way better in those places and prices are a fraction to what you are charged here. My brother is visiting the US and has been sharing the prices at some not fancy restaurants he is eating here and when I compare to our last visit to Europe 2 weeks ago it is between 3 and 4 times more to eat a similar meal here. Unbelievable. A good friend just came back from Hawaii and he was shocked with the prices there. I have been going to Europe every year for over 15 years and prices don’t go much higher there. When you say “they may catch up eventually” I actually see the other way around. Prices have to come down here or it won’t be sustainable.
I hope you are right.
But for example Croatia went from the Kuna to the Euro and I am hearing that prices are trending much higher there.
I’m in Europe for a couple weeks myself and find it such a breath of fresh air. There is no denying that at restaurants, hotels, and just about everything else (except perhaps car rentals and fuel), your dollar goes farther.
There’s no comparison. I’m in Spain this week and Hyatts are ~€150. Travel in the US has become too expensive. I’m with Santastico here. Why would I pay double for hotels and triple for food/drinks to get poorer service and amenities.
“There is no denying that at restaurants, hotels, and just about everything else (except perhaps car rentals and fuel), your dollar goes farther.”
I don’t know about elsewhere in Europe but, earlier this year, I was able to rent a car in Spain on two occasions (Tarragona, Valencia) for $6-10 per day. I’m not complaining!
I’ll add in, in my experience the service and overall experience is generally better in the European restaurants these days.
IMO it’s pretty rare these days to get very good restaurant service in the US, even at very high price points.
Yes indeed. Italy and Spain especially. Even London feels more reasonably priced for services.
Europe is so much cheaper. Add in that you can work remotely, and people are traveling there more. That is making up for my lesser business travel there.
Someone needs to send this article to American Airlines management; they have brainwashed themselves into thinking adding hundreds of “new” regional airports to their network was a profitable strategy. They are the only Legacy determined to become the world’s largest domestic carrier, apparently at their shareholders expense!
It’s prices, but not just prices. When I was there last year the hotels actually had service and weren’t competing to see who could offer the least at the highest prices.
The US hotels with Waldorf prices and Motel 6 services are cutting their own throats.
@Jim Lovejoy: Here is an example. If you book a local chain or boutique hotel in Europe, breakfast is mostly embedded in the rate you pay. We just got fantastic breakfast in a few hotels we stayed and nobody came asking us for our room number or bringing a check. It is just part of the deal. Try getting breakfast in a hotel in NY, Chicago, SF or Hawaii. It will be $60 per person plus tax plus tip.
Service is another great example you bring in. Housekeeping twice per day. Here you are asked if you want your towels changed and even when saying yes I had an instance where the housekeeper did not show for 2 consecutive days and I had to go down to the reception to ask for new towels and more soap. At a $500/night rate?
I wonder if there us slightly decressed demand among some elderly because if Covid. Travel adds risks so maybe they are flying less and that they usually fly domestic.
Another reason could be that over a million people have died from Covid and they took a one way trip to the cemetery.
Europe a much better option almost always. Food, drink, accommodation, much cheaper, higher quality, and no one needs to deal with the tipping culture, which in America has gone overboard and is insane. Pay people better salaries instead of suggesting 25% tips on meals, take away coffee etc…
Not true. A waitress in Italy or France doesn’t make much. In the US, $15/hour is increasingly common with a few $20 in blue states.
Well thank goodness for America then! What would the world do without it?
They are servers, and the profession is not just comprised of women.
@derek: You live in utopia.
“waitress in Italy or France doesn’t make much. In the US, $15/hour is increasingly common with a few $20 in blue states.”
I can tell you I haven’t seen a single homeless during 2 weeks in Europe. Now, look at the blue states.
What does that have to do with a server making $15-$20 an hour, which most do.
Homelessness is less visibly prevalent to foreign tourists in Europe for reasons that are not so applicable in the US where European tourists tend to go in the greater numbers? You know, things that you may not favor in your own neck of the woods — such as income compression, high average personal taxation burden, and governments’ expensive welfare support policies which reduce homelessness and provide more widely affordable access to healthcare (inclusive of mental healthcare)?
I encounter homeless people at times even in Sweden. You just need to figure out where to look for them, And that is even as the weather in Sweden isn’t all that amenable for a person to be long-term homeless all year round.
Nobody wants to travel to red states and you can only go to the good (blue) states so many times before you need to find something new, so they go to Europe.
Not entirely true. I am making a list of 10 states that I wouldn’t mind visiting. They are:
1. California – Blue
2. Hawaii – Blue
3. New York – Blue
4. Texas – Red
5. Illinois – Blue
6. Florida – Red
7. Alaska – Red
8. Maryland – Blue
9. Arizona – mixed
10. North Dakota – Red
So more blue states but not all
@ derek
Thank you derek for including
Maryland! We have a lot to offer and close to DC! Please reach out for any suggestions. We’ve got ocean beaches, the best tidal estuary and mountains too. Whatever enjoy a great vacation
@Billy Bob: Finally I agree with you. Florida is empty. Nobody wants to travel there. Everyone is moving out of the state. Businesses are closing. Homeless people everywhere. House prices there tanked. Anyone can break into stores and steal less than $900 and nothing happens. What a shitty state!!!
I disagree. If you’re rich, straight, male, and white then Florida is awesome. Sure, you do have an education system that’s being intentionally destroyed by the state, plenty of homeless (as you noted), substantially overpriced real estate, high crime, a government that encourages hatred and division, ecological disasters, and insurance companies either going bankrupt or simply leaving the state but Florida’s not all bad.
You’re right. Florida is literally ISIS.
I’m sorry you think so. I’d say it’s more things that changing to competent state government could address.
Florida is Disneyworld. Take that out of the equation and it’s just America’s worst scum consolidating in one place. I’m glad for it.. it’s helping other states turn blue
Yes. You are right again. Only Disneyworld attracts tourists to FL.
https://www.travelinglifestyle.net/miamis-tourism-industry-booming-with-record-visitor-growth/
Oh yea, Miami. What a dump. Had to go there a couple times this year for work. Couldn’t wait to leave. Makes new Orleans look clean
You do always talk about going back to the good old days, and thanks to Florida we are going to need leper colonies again… so no wonder you love it
I understand that when someone lives with their mom in a high rise in Chicago they usually have a different view of the world.
Hey, we all couldn’t use affirmative action to get into the ivy leagues
Make sure mommy puts your oatmeal in water before putting you to bed. Dream with angels.
OK, and when you say your prayers before bed, make to thank God for the democrats that provided your current life
We keep trying here in Florida to keep certain groups out but Spirit keeps bringing them. Even their “leaders” warned them but as long as Carnival keeps cruising from here we are stuck with them.
@ Dave Edwards.
Lol.
I wonder how to reconcile the fact that hotel prices in the USA are insanely high with people going in vast numbers to Europe instead of traveling domestically. Presumably if everyone was leaving the country then hotel rates wouldn’t be so eye watering back home but that’s absolutely not the case.
@ Cristian
Every year my best friends get together in a Pennsylvania resort. It’s a lovely place. The room suite was $300+ prior to Covid. When we going to reserve rooms this spring rates for my room were (are) $1700 per night. This rate includes nothing. While a lovely and pampering resort, the three day cost would pay for a heck of lot of other lovely non USA resorts. Rethinking travel
They are going to the hoards of crowds and people? I don’t believe it. Been there done that. I have no interest in Europe even though my mother is Greek and Father Italian.
You are so wrong. Avoid the big cities were all the tourists following a guide will go. Forget about Rome, Florence, Venice, Paris, Barcelona. Having Greek and Italian heritage you should know there is so much more to explore there. I spent 2 weeks in Europe this summer. Big cities were a zoo but less tourist places were absolutely amazing. Do your homework.
Valid in general but doubly so right now.
Wrapping up my annual summer leave on the continent.
As long as I have someone subleasing my spot in Boston I finish every summer in the black. Sun, Sand, and an 8 day annual hiking trip included.
It will continue to be that way as long as my fellow Americans lack the basic travel instinct and continue avoiding Costa Brava. Keep it up Uncle Sam
LOL. Of course we traveled to Europe. I was with my family for 2 weeks in Italy. We were nine people and I never paid at a restaurant more than HALF of what I pay here in Los Angeles to eat out. . My wife and I just got back to LA and went out to sushi and it cost us more for two people than any meal we had for nine people in Europe. The prices in the USA have become astronomical. I didnt realize how bad it was until I traveled Europe
Can someone please address why first class domestic flights on Delta and American airlines do not come with meals. I recently flew for five hours on Delta airlines, and all we received in first class was a drink and a bag of chips. What’s going on?
What other airlines do this horrible service?
Thank you
What route?