Record-Setting July Fourth Travel Weekend

AAA projects 50.7 million Americans will travel via air or auto this upcoming Independence Day holiday weekend—nearly 2 million more than 2019—the previous record.

Air Travel

Despite limited capacity and air traffic controller shortages limiting flights, air travel is expected to set a new record.

• More than four million Americans are expected to fly to their destination this Independence Day weekend, an increase of 11% over 2022 and 7% over 2019.
• Hopper reported that domestic airfare has dropped more than 27% since last year. Perhaps contributing to an increasing share of travelers choosing to fly.

During Delta Airline’s recent Investor Day, CEO Ed Bastian commented that “…demand as you know, as anyone that’s traveling knows, is off the chain…”

While airlines continue to face growth challenges limiting capacity including new aircraft delivery delays, air traffic controller and pilot shortages, strong travel demand—particularly among high income earners has been unrelenting. Airlines have also benefited from jet fuel prices that are down about 30% from a year ago, resulting in falling airfares, at least domestically.

Still, many domestic destinations are seeing a softening of leisure travel demand as more Americans choose to take their money overseas now that travel restrictions are completely removed, and the dollar remains strong.

• Compared to May 2019, 8% MORE Americans traveled internationally while 20% fewer international visitors arrived in the U.S.

Traveler Preferences

Even with rising interest rates, elevated inflation, lower wage growth and tighter credit standards, consumers continue to spend and prioritize in-person experiences.

As consumers continue to shift from goods to services, there is still room to grow as the share of spending on services is not fully recovered.

This year, as travelers seek to balance budgets and bucket lists, many are putting experience ahead of tradition. Whether it’s soaking up the sun on a pristine sandy shore, jet-setting for a fun-filled urban adventure or hitting the highway for a good old-fashioned road trip, summer 2023 is all about taking much-needed time to savor new and beloved destinations.

And higher income individuals are even more likely to prioritize travel, boosting many travel corporations’ bottom lines.

• According to Delta, high-income travelers accounted for 75% of air travel spend and leisure travel is their highest priority purchase.

What to watch: Americans remain excited for upcoming travel and demand does not appear to be impacted in the near-term; however, financial concerns, depleted excess savings buffers, tighter credit standards and higher prices are expected to make consumers less inclined to spend in the second half of the year.