Inflation is hitting us from all sides, especially as we travel, as the price of a plane ticket is up 34% compared to last year, according to federal data.
Meanwhile, lodging prices are up 11%.
"We've got a reverse of what happened last year,” said Desmond Lachman, a senior fellow at the American Enterprise Institute. “Last year, everybody was not going to restaurants, not doing services. That what they were doing is cutting back on travel, not going on the airline so we've got a huge amount of pent-up demand for services. People who hadn't traveled now want to travel.”
Many companies reduced their workforce when the pandemic hit because people were not traveling. Those same companies find getting workers to come back quite challenging.
“A lot of their staff have had second thoughts about whether they want to be in those industries,” said Lachman. “So we've got shortages in those industries in terms of manpower at a time, that demand is surging, so that's the reason that you're seeing those prices.
There are signs the industry is cooling off. Prices for flights and hotel stays dropped in June, but consumers are still getting squeezed. One analysis showed flight booking numbers were down in May, but airline revenue increased due to higher ticket prices.