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Conventional travel wisdom suggests that those flying around Thanksgiving and Christmas, holidays that many Americans travel for every winter, should book their travel as early as possible. Yet the pandemic scrambled how, when, and whether many people fly, and chucked conventional wisdom out the emergency exit.
“Consumers are booking travel with about 25% less time before departure,” says Hayley Berg, an economist at Hopper, a travel booking app. “About a week later for domestic, about three weeks later for international.”
Last-minute travel shoppers could benefit this year. Data provided by Google Flights via email suggested that the lowest prices for Christmas travel tend to become available between 20 and 88 days before departure, based on five years of historical data. That’s much later than many travelers probably think.
Yet this year, like many recently, could be different. Or it could return to something like “normal.” And that’s good news for travelers who held off on booking holiday travel so far.
Ride the wave
Berg suggests that, so far, holiday airfare prices in 2022 are following a remarkably typical pattern. Although airline ticket prices shot higher than normal during the summer, they have since moderated, and now are incrementally increasing as we approach the holiday season.
“At the end of the trough, from 180 days to 60-80 days, it rises and then it starts dropping,” Berg explains, outlining the typical airline pricing pattern between now and the holidays. “But for both holidays, we see stepwise increases from here. Prices will be lower than they were in August, but they will rise slowly.”
Basically, the question of whether it’s better to book early or late is an oversimplification. The best time to book is between the two demand peaks of summer and last-minute.
That is to say, right now.
“Our advice is twofold: Book now because prices are going to go up, and inventory on peak days is going to fill up,” Berg says, suggesting that limited airplane seats could simply run out. “Inventory is at or below 2019 levels.”
Dwindling supplies, hard-to-predict demand
Last-minute holiday travel booking could spell trouble as a demand surge runs into a supply crunch. Only so many flights can operate at peak times such as Thanksgiving, and airlines continue to struggle to staff and operate enough flights to meet demand. American Airlines expects its capacity to fall 5-7% short of 2019 levels in the fourth quarter this year, according to its recent earnings report.
When airlines sell most of the seats available for peak travel days, prices will climb. And if more travelers are booking later than in the past, this could lead to a doorbuster-esque rush — and price hike — on the few remaining seats.
But this scenario assumes that demand (i.e., the number of travelers willing to pay peak prices) remains steady, and that’s far from foregone.
According to a September 2022 survey of 4,986 Americans by Deloitte, an international professional services network, only 31% of respondents plan to travel this year between Thanksgiving and mid-January — way down from the 42% who planned travel for the same period last year. And 40% of non-travelers say their financial situation is worse this year than last year.
As macroeconomic conditions continue to worsen and the threat of a recession looms larger, the appeal of spending hundreds of dollars on airfare could fade. Weakening demand would keep prices soft and leave more seats available for last-minute buyers.
Another difference between this year and comparable, pre-pandemic holiday travel seasons: Remote and hybrid work have changed how many office workers plan travel. Instead of being limited to certain days by in-person schedules and limited time off, so-called “laptop luggers” can bring their work to grandmother’s house, assuming she has decent Wi-Fi.
This adds another layer of nuance to the best-time-to-book-holiday-travel story for 2022. No matter how weakened air travel supply becomes, peak travel days (such as the Sunday after Thanksgiving) will fill up, becoming essentially unavailable for last-minute travelers. But those who can stay flexible with their dates will have better chances of finding cheaper airfare.
“There will be deals available if you’re extra flexible,” Berg suggests. “But for the average traveler, from here on out, we’re going to see prices increase.“
Another bonus for seat-of-the-pants flyers: Hotels are usually cheapest to book the day of check-in, even on busy holiday dates. Berg suggests the data is unequivocal when it comes to booking hotels: Later is better.
“Thanksgiving day last year, prices [for hotels] dropped 28% on the day of booking compared to booking five to six weeks earlier,” she says. This is great for budget-conscious travelers with loads of flexibility, but might be too nerve-racking for those who crave certainty. “You run the risk that exactly what you want won’t be available.”
Whatever does or doesn’t change this holiday season compared to the pandemic or pre-pandemic patterns, one thing is for certain: The old advice to book as early as possible is moot.
That’s good news for those who have waited until now to book, but the clock is ticking. Travelers’ newfound willingness to book later could run into the reality of limited flights during peak dates. If so, deals will be hard to find.
Those who can remain flexible will stand to benefit, as prices could drop for off-peak dates. And those willing to book hotels last-minute (like, really last-minute) could save even more.
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