As the U.S. economy reopens, consumer spending has increased in travel-related sectors. Transaction data shows sales for air travel, hotels, and travel arrangement services have increased since plummeting in March 2020, and rose dramatically in March 2021, while the cruise industry’s recovery remains sluggish.
Within the airline industry, both full-service and low-cost airlines have been cruising towards recovery, though budget airlines are closer to pre-pandemic levels.
Prior to the pandemic, full-service airlines enjoyed slightly higher sales versus budget airlines. The former enjoyed a 10 percent year-over-year increase in sales in January 2020, compared to a 3 percent decrease for budget airlines. However, in March 2021, year-over-year sales for budget airlines were up 66 percent, and only 42 percent at non-budget airlines.
Transaction volume also rebounding
Customers of budget airlines made on average 1.6 transactions in March 2021, whereas customers of full-service airlines made on average 2.3 transactions.
A closer look at share of transactions by price point revealed that the distribution has shifted since March 2020. Transactions under $250 have fallen 17 percent, while transactions between $250-$500 and $500-$750 have both increased roughly 11 percent. Similarly, the number of transactions over $750 have increased 5 percent. This increase in spending on higher priced tickets, combined with higher average number of transactions in March 2021 could signal a willingness from consumers to travel a longer distance as reopening continues.
To learn more about the data behind this article and what Second Measure has to offer, visit https://secondmeasure.com/.
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