Travel Slowing Down
Are you planning to take a vacation soon with your hard-earned dividends? Well, you’re in luck because travel prices are declining. The summer travel season is winding down, causing prices to plummet, and prompting concerns about demand in the coming weeks when business travel is expected to take up.
On Tuesday, roughly 1.4 million individuals were checked by the Transportation Security Administration, the fewest since May 11. Travel demand typically declines as children return to school in the late summer, but Frontier, Southwest, American, and Spirit Airlines executives warned last month that they would miss revenue and profit targets due to lower bookings, a trend they blamed on an increase in cases of the delta variant of Covid-19.
People are opting to stay at home and forgo travelling amid the surge of cases and hospitalizations.
It’s a stark contrast to earlier this month, when air travel in the United States reached new pandemic-era highs, with airlines struggling to keep up with demand. On August 1, TSA screened more than 2.2 million passengers at airports around the country, the greatest number of people examined since the pandemic began.
If delta variant cases continue to rise and travel demand continues to plummet, airlines could face more unexpected losses. On Tuesday, the Centers for Disease Control and Prevention warned unvaccinated individuals against traveling over the Labor Day weekend.
It’ll be interesting to see how airline companies perform as we head into the holiday season. Will travel return, or will the delta variant continue to keep people at home?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.