(Bloomberg) -- If last year's holiday vacation sticker shock was too much for you, you might find winter travel in 2023 more appealing—though an unusual Christmas break schedule could upend your plans.
“Room rates have rebounded a bit from the 2022 holiday season—when they rose 50% from pre-pandemic levels—but they are still up considerably from 2019 in many places,” explains Patrick Scholes, managing director for lodging and leisure equity research at Truist Securities, an investment firm based in Atlanta.
Also affecting holiday travel this year is the fact that Christmas and New Years Day will both fall on a Monday, something that happens roughly every seven years. “When this happens, it pushes the holiday into a very short window because it’s not clear when the second week of Christmas vacation should be,” says Paul Tumpowsky, chief executive officer of Skylark, a travel agency based in New York. As a result, booking consolidates into the obvious week, sending prices higher—and availability down.
The silver lining is that airfare from the US has dropped significantly (more on that below), even when compared to levels before the pandemic, according to Consumer Price Index data released in September by the US Bureau of Labor Statistics.
Hayley Berg, lead economist at the travel booking app Hopper , says the coming weeks should be an opportune time to book winter trips. "We expect ticket prices to drop in the last two weeks of September and climb again the second week of October,” she says, adding that prices should peak by late November or early December.
Here’s what you can expect to fork over.
Domestic Prices Are Down, But International Travel Is Up
According to Hopper data compiled exclusively for Bloomberg, domestic holiday flights will be down about 9% from last year, though prices will fluctuate city by city. Roundtrip airfare from major US cities to destinations such as Orlando, for instance, are down 19% and will cost $396 per ticket around Christmas, compared to $491 during the same period last year.
Flying into Las Vegas over the break will cost $341 a seat this year, versus $420 last year.
Prices for international flights, however, are trending upward. As many people have overcome 2022’s renewed fears of getting stuck overseas amid a Covid-19 surge, more people seek to travel to Europe and Asia.
Per Hopper, Christmastime airfare from the US to Asia is up 20% year over year; expect to pay about $1,572 for a ticket to Tokyo, the continent’s most popular holiday destination. In Europe, prices are roughly 16% more expensive than at Christmas 2022; economy-class tickets to major hubs from the US are averaging $934 for a seat.
For a better deal, consider:
Where to Go and What It Will Cost
The US, Mexico, Costa Rica, the Caribbean, Europe and Thailand are all set to be the hottest global destinations this winter, per data from Virtuoso, a network of more than 20,000 luxury travel advisers. "Globally, we see the US as the top holiday destination, not just for Americans but for travelers the world over," says Misty Belles, vice president of global PR at Virtuoso.
She notes that holiday lodging rates have softened from last year in such major US cities as New York (down about 8%) and Los Angeles (down nearly 50%) as pandemic-driven domestic travel to those cities has decreased. Smaller reductions in hotel rates are offered in sunny Florida.
You may even get a deal on your ski trip—if you overlook rising ticket prices for lifts.
"Hotel rates are down about 13% in Vail, Colorado, over last year," Belles offers as an example, adding that rates have cooled in destinations across Colorado, Utah and California, where rates boomed during the second year of the pandemic. (A strong El Niño may bode well for snowfall out West this season.)
Internationally, though, hotel rates are climbing in many cities, surpassing last year's peak pricing. Belles says that luxury hotel rates are up 44% in London and 30% across Hawaii. "Cabo San Lucas [in Mexico’s Baja, California] is commanding hotel rates up to 49% over 2022,” she notes.
An ocean-view room at Waldorf Astoria's Los Cabos Pedregal resort, for instance, runs $2,271 per night during the week of Christmas. Caribbean prices are even higher. For example, an ocean-view room at the Ritz Carlton Grand Cayman in that island’s Seven Mile beach is going for $2,838 per night in Christmas week when a garden-view room at the Four Seasons Ocean Club in Nassau, the Bahamas, commands $3,200 nightly. The daily price for the same room drops to $2,050 a few weeks later.
No Savings for Road Trips or Early January Travels
On top of lodging and airfare considerations this year, travelers are also being impacted by high gasoline prices for on-the-ground transportation needs, especially with prices still rising in some areas. Inflation-impacted food expenses for eating out and shopping for groceries will heighten travel costs, too. "Even as inflation slows, consumers are seeing higher prices than they may have paid for goods and services in the last few years," notes Hopper’s Berg.
That won’t slow travelers. Industry representatives expect demand to remain high this winter—especially during that compressed holiday schedule. And while time off from the workweek might get shortened this year for some employees, travelers with young kids at home will find that Christmas and New Years falling on Mondays is likely to bring a longer break from school this year. Most public schools returned to normal operations on Jan. 3 this year, but they won't do so in 2024 until Jan. 8. "That extra week of January winter break is already proving very popular for families—all of January 2024 is expected to be up about 7% in revenue from last year as a result," says Scholes.
Indeed, Belles says lodging demands through this holiday season won’t just match last year’s. They’ll exceed it.
Scholes says he’s relieved that his family has already booked the holiday vacation. “Because this year is so different, we booked as soon as we got our kids’ winter break schedule from their school.”
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