Hotels vs. Airlines: Who Can Ride Inflation to a Full Recovery?

A little inflation could be good for the travel sector, industry sentiment went a few months ago. 

But it is clear some segments are playing the pricing game better than others when it comes to accelerating their pandemic recovery. 

Hotel rates in the U.S. are pacing above the national rate of inflation while cruise ships and airlines lag, according to Skift Research. Lodging prices at the end of last year were 12 percent higher than 2019 levels while ship fares were up 2 percent. Airline fares were 17 percent lower while U.S. inflation overall averaged 9 percent higher than 2019.

Pricing power and inflation, for industries that can get away with it, can lead to a faster recovery.

“It speaks a lot to the credit of the discipline that the hotel industry has had. It would seem they learned the lesson of 2001 and 2008, which is that discounting in a crisis can have long-term effects on consumer expectations and makes it really hard to regain pricing power,” said Seth Borko, a senior research ana