EconomyFinancialYou are going to travel? This Holy Week aims...

You are going to travel? This Holy Week aims to be the most expensive in a decade

Two years after the COVID-19 pandemic, the spirit and confidence of Mexicans to travel has skyrocketed, especially given the extensive progress in vaccination in the country and a drop in infections. However, now the problem seems to be of a financial nature, as inflation puts pressure on people’s pockets in all areas, including tourist services such as flights and lodging.

The persistent inflationary environment coupled with strong travel demand even points to this being the most expensive Easter period in a decade. The price indices for services such as air transportation and those provided by travel agencies are the highest for a month of Easter at least since 2011, while those for lodging are slightly below the levels of 2019, of according to the National Consumer Price Index (INPC) of the Inegi.

In March, air travel costs were 40% higher than in 2021, while travel agencies offered 20% higher rates. In the same period, hotel prices were 11.6% higher than in 2021 – they were even higher than general inflation, of 7.45%. Compared to 2019, flights are 29% more expensive, while agencies have prices just 1% higher, and hotels offer rates 2% lower.

For specialists, the price levels respond to a demand motivated by the confidence of people to go out, especially in the face of a greater relaxation of the restrictions applied to prevent the spread of COVID-19.

“They have been buying Easter trips for more than 30 days, and the first thing we see is that there is little availability, at the level of demand it looks very sustained,” explains Alejandro Caligaris, country manager of the Despegar travel platform. “It’s been a while since we had green traffic lights in all destinations; today inflation affects, but closures due to COVID even more.”

In addition to the costs, the manager considers that a more cautious traveler is being seen than before the pandemic in areas such as the conditions and penalties for changing plane tickets.

However, the price category –and compared to 2019, before the pandemic– varies significantly from one market to another.

What are the most expensive destinations?

On the Kayak travel platform, for example, the destinations that have become more expensive are also some of those with the highest demand, such as Guadalajara (whose prices are 16.5% higher than in 2019 for this holiday season), Monterrey (15.2%), Tijuana (5.5%) and Mexico City (0.3%), while others have even dropped, as is the case of Puerto Vallarta, with prices 3.2% lower.

“We see that Mexican travelers are excited to resume their trips at Easter,” says Lise Vives, country manager of Kayak in Mexico. “Today the interest continues to be national destinations, in the end Mexicans are mainly looking for beaches, but also cosmopolitan and colonial destinations.”

The item of prices has regained so much relevance that it has become the main reason for not vacationing during Holy Week.

According to a survey by the PQR Planning Quant firm, while in 2020 and 2021 the main impediment to traveling in this period was the fear of contracting COVID-19 (according to 65% and 64% of those surveyed, respectively), For this year, 62% say they do not have money to go out, while COVID-19 came in third place as a reason for not traveling, only behind preferring another vacation season.

“The pandemic brought effects not only in health care, but also in economics. That, coupled with inflation, means that the restriction is not health, but economic”, explains Iván Castro, director of PQR Planning Quant. “Even though there is drive, need and desire, they don’t come out because of a financial issue.”

Usually a way to mitigate the financial impact of buying a trip has been through months without interest. In the case of Despegar, for example, 70% of users are financed in this way, with terms that range between six and 12 months, depending on the promotions offered by banks, says Calligaris.

For this Holy Week, Mexicans aim to spend an average of 9,300 pesos, according to the PQR Planning Quant survey.

“You can have several factors at play. Naturally, prices can drop according to the seasons, and also the frequency of flights, new companies and new frequencies by airlines, can cause a drop in prices if competition increases on some routes”, concludes Vives.

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