Travel and vacations are back: As the omicron dwindles, Americans book trips again

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Americans are again planning to spend a lot of money as cases of omicrons subside and states across the country are easing restrictions on Covid disease.

Travel agents, hotel operators and restorers say they have seen a dramatic increase in demand over the past week, following a drop in daily coronavirus cases in the United States of more than 40 percent and after the onslaught of warmer weather in parts of the country. People book trips for spring break and summer break. They squander on Disney vacations, private tours of Hawaii and cruises to Antarctica.

Unlike the beginning of the crisis, when the pandemic seemed to end in a celebratory boom, the reality was more uncertain and full of seizures and beginnings. Many say it has given them a sense of urgency to block “travel for revenge” during this window of relative peace before it can disappear again. And although the Food and Drug Administration has postponed a decision on a vaccine for children under 5, families still hold their breath and reserve.

“People really want to make sure they travel as long as they can,” said Mark Matthews, marketing manager for private travel agency Maui Seasons in Hawaii, where bookings have risen 65 percent so far this year. “Who knows when the next tribe will come and what it will look like? We don’t even know everything. “

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Pandemic patterns show that consumers are rushing out after each wave of the coronavirus, eagerly spending on flights, hotels, amusement parks and other services they have given up.

This increase in spending was most pronounced last summer, when households were encouraged by the break in coronavirus infections and the widespread availability of vaccines. The subsequent recovery has been less pronounced, although economists still say it is a major shock to the economy.

The expected increase in spending this time comes as the Federal Reserve prepares to raise interest rates to slow consumer-driven inflation, which is widely considered unsustainable. Prices are rising at the fastest pace in 40 years, which Fed officials say is the biggest threat to economic expansion.

The new wave of spending could further complicate the Fed’s plans, while raising wider questions about whether restaurants, hotels and airlines – which are already trying to find enough staff – will be able to provide staff in time to meet demand. Employers addressing labor shortages, leisure and hospitality employers raised wages by an average of 14 percent last year, making them the only sector in which wage growth has outpaced inflation.

Economists say we will only see how lasting or widespread the spring spending boom can be. Unlike previous reopening increases, there are no government stimulus controls or additional child tax credit payments to fill Americans’ bank accounts. And while the economy continues to add jobs, wage growth has been largely overshadowed by inflation.

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“I expect things to go back, but in the broader context, spending has been very strong,” said Mark Zandi, chief economist at Moody’s Analytics. “Omicron disrupted the economy, but did less damage than previous waves.”

Consumers spent a lot on furniture, cars and food in January, which sent US retail sales rises by 3.8 percent although Omikron has stirred up many parts of the economy. This is at the peak of record holiday sales that according to the National Retail Federation, it jumped 14 percent to $ 886.7 billion. Now that coronavirus cases are receding, economists say Americans are likely to shift more of their spending on goods – such as electronics and exercise equipment – to services, including travel and leisure.

To this end, the number of airline reservations is increasing. Hotels are filling up. According to Jay Shapiro, who owns a top travel agency with offices in Las Vegas, Honolulu and Fort Lauderdale, Florida, the demand for luxury cruises and vacations in Europe at Five Star Travel has reached a fever this week.

“Clients who have been sitting outside in recent years – because they were old and comorbid – are now calling and saying we are ready to start driving again,” he said. “The business has started tremendously, in just the last day or two.”

Customers also spend significantly more after being cooked for the winter, Shapiro said. And for the richest, couples who may have set aside $ 25,000 for a luxury vacation before the pandemic are suddenly willing to spend three or four times as much, he said. A $ 150,000 family vacation in South Africa is no longer an option for some. And many summer cruises to Europe are already sold out.

“People still have the means to spend; they just needed a catalytic converter and now they have it, ”said Aneta Markowska, chief economist at Jefferies, which is planning its spring break, its first in two years, to the Turks and Caicos. “They’re sitting on the biggest pillow they’ve seen in years – and they’re not just rich; that’s 80 percent of the population. “

According to Wells Fargo, the Americans set aside additional savings of about $ 2.4 trillion during the pandemic, partly because they reduced food, travel and entertainment. However, data show that spending on these services tends to grow rapidly as coronavirus cases decline.

According to Bank of America, air bookings for domestic and international travel are on the rise. Kayak flight search boosts in February for flights to Philippines and Morocco more than doubling a month ago.

Meanwhile, hotel reservations in Orlando have almost completely returned to pre-pandemic levels in the past two weeks, according to the city’s tourism association.

“This is not our first rodeo.” We know that when we get a chance, everyone is in a hurry, “said Diane Swonk, chief economist Grant Thornton. “We will see a relatively strong catch-up in the spring.”

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At Outer Banks, North Carolina, the demand for beach home rentals is higher than ever, according to Alexis Lowe, a marketing specialist at Carolina Designs Realty, which manages about 350 coastal rental properties.

“We are so busy this summer that our focus is shifting to 2023,” she said. “We’ve filled our major weeks faster than ever before.” I’m pleasantly surprised at how confident people feel. “

This confidence, as many in the industry say, has grown over the last week. As coronavirus cases decline, a number of states, including New York, Nevada, Rhode Island and Delaware, have dropped their mask mandates, and many more have indicated that they will follow by the end of the month.

Governor Charlie Baker (R) of Massachusetts announced last week that he would lift masks in schools in late February, sparking a flood of issues at Vacationeer Travel Agency in Watertown, Massachusetts, which specializes in Disney vacations. . Owner Jonathan de Araujo says he has traveled twice as many times as in 2021, and expects the number to triple by the end of the year.

“People have come back to that,” he said. “As all these states drop the demands on masks, it was a signal that things were returning to normal. Families say: ‘We haven’t traveled in two years. Let’s do it now. “

However, he says he is also ready for another round of closures and cancellations if coronavirus cases increase again. “There could be another increase and my customers could say, ‘I’m not going now,'” he said. “If I’ve learned anything, it’s that things change.”

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After canceling a long-awaited European holiday in March 2020, Jenni Solis has finally booked another trip – albeit on a smaller scale. He plans to fly to Redwood National Park for five days in June.

“Omicron is getting better and I really need to get away,” said Solis, a 47-year-old Los Angeles elementary school teacher. “We need to relax even more than before the pandemic.”

However, she added that she was still not ready to book a holiday in Germany, Belgium and the Netherlands in case she was derailed by a new variant. “I don’t want to cancel a trip like this again,” she said.

Andrew Van Dam contributed to this report.

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