Summer travel costs are soaring and Canadians appear happy to pay the price

Summer vacation is only getting started, but so far pent-up demand for travel after two years of pandemic restrictions is more than offsetting soaring costs related to a surge in the price of jet fuel and a battered airline industry that still is struggling to put as many planes in the air as it was a few years ago. “We observe that consumers are ready to accept price hikes,” Annick Guérard, CE of holiday airline Transat, said in a press release on June 9, adding that the company she runs would have made money in its most recent quarter if not for the spike in fuel prices. The average international airfare from Canada is now $960, up 15% compared with 2019, according to data collected by Hopper, the Montreal-based company behind the travel app of the same name. Soaring fuel costs, industry labour shortages, and fewer seats are among the factors contributing to the rise in prices, said Haley Berg, Hopper’s lead economist. “We know demand has surged since the beginning of the year, given borders have opened, many Canadians are looking to travel again,” Berg said. “So, you have a gap of more people who want to travel than seats that are available to be booked.” Evidence that travellers are willing to absorb higher prices is good news for industries that depend on travel and tourism, which have been among the slowest to recover form the COVID recession. For example, employment in the accommodation and food services industry — hotels and restaurants, essentially — was still below pre-pandemic levels in May, according to Statistics Canada’s latest Labour Force Survey, published June 10. Transat’s share price is about 75 per cent lower than it was at the start of 2020, reflecting the near impossibility of turning a profit in the airline industry over the past couple of years.<br/>