The Return of Travel?

Taking Off

The travel industry appears to have finally rebounded from the COVID crash, with an average of 1.95 million passengers passing through US airports each day in January 2023. This is down just 1% from January 2020, before the pandemic hit.

In fact, with lockdowns now apparently in the rearview, airline executives believe the travel industry could benefit from pent-up demand over the coming years, possibly leading to tens of billions in additional revenue for airlines. Many major airlines are already cash flow-positive and have been able to start paying down the debt they took on during the pandemic.

Strong Travel Spending

Following a year of record inflation and increased interest rates, consumer spending has slowed down in a few major categories, like homes and cars. For example, existing home sales have declined for 11 months in a row. Meanwhile, travel spending remains strong.

According to data from American Express (AXP), company credit card spending on travel and entertainment was 34% higher in Q4 2022 than in the same period the year before. This means that companies not only feel it’s safe enough to start sending employees on trips again but they have also budgeted to compensate for such expenses.

Book That Ticket

While this resurgence in demand is a good sign for the economy as a whole, infrastructure issues at major US airports and a shortage of airline pilots could make it hard for US airlines to meet the rising demand.

With demand outpacing supply, analysts expect the cost of airline tickets to increase over the coming months.

So, if you’ve got a trip coming up, you may save on your fare by booking sooner rather than later, searching for flights directly through airline websites instead of flight aggregators, or using credit card points or airline miles to book your flight. And, if you don’t, now might be the time to plan one.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS23020602