Holiday travel is going to 'feel a lot more like 2019 crowds,' economist says

The Omicron variant of COVID-19 is rapidly spreading across the U.S. ahead of the holidays, but experts still expect big crowds hitting airports to visit loved ones despite new fears of contagion.

AAA estimated last week that 6.4 million Americans would hit the skies between Dec. 23 and Jan 2., nearly three times the number who traveled during those dates last year, before vaccines were widely available.

Hopper economist Adit Damodaran told Yahoo Finance Live on Tuesday that airport crowds for the holidays will be roughly 85% to 90% the size of those back in 2019. AAA similarly projected that more than 87% of 2019's level of air travel will return for the Christmas holidays.

"I actually do think that it's going to be interesting for travelers because we haven't seen these crowds since 2019," said Damodaran, whose company predicts how prices for flights and hotels will change. “And that is a mix of both domestic and international traffic. So for everyone going through airports this holiday season, it's going to feel a lot more like 2019 crowds.”

U.S. air travel fell rather predictably in 2020 after pandemic-induced fear wreaked havoc on travel demand and national restrictions during the ensuing shutdowns increased costs for airlines. U.S. airlines carried 62% fewer passengers in December 2020 than they did the same month in 2019, according to data filed with the Bureau of Transportation Statistics.

However, much has changed in the past year: Notably, over 65% of the eligible population has been fully vaccinated. Even with the Omicron variant, the Centers for Disease Control and Prevention says vaccines protect against severe illness, hospitalization, and death.

Still, the Omicron variant may be making travelers wary of venturing overseas. Since late November, when the World Health Organization classified the Omicron strain as a variant of concern, the share of travel searches on Hopper for domestic travel rose from about 57% to 64% now, Damodaran said. This suggests that international travel demand has fallen more precipitously than domestic travel during the period.

Indeed, trade association Airlines for America said this week that international air travel for the week ending Dec. 19 was down 28% from 2019 levels compared to just 15% for domestic air travel. This may be in part to new CDC regulations requiring unvaccinated people to submit proof of a negative COVID test 24 hours before an international flight, as opposed to three days for unvaccinated people.

That lower demand could mean international fliers could get a good deal this holiday season.

"If you're going internationally, those prices are still down from pre-pandemic levels. So for the international airfare market for outbound international flights from the U.S., those are down about 9% from 2019 prices. That amounts to about $800 round trip," Damodaran said. "So it's still pretty pricey for an international trip, but not as pricey as it used to be in 2019."

Ihsaan Fanusie is a writer at Yahoo Finance. Follow him on Twitter @IFanusie.

  • Read the latest cryptocurrency and bitcoin news from Yahoo Finance

  • Read the latest financial and business news from Yahoo Finance

Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard, and LinkedIn

Source: Read Full Article