Travel editor explains how ‘so much pent-up demand’ will transform the industry

The Points Guy Global Features Editor Melanie Lieberman joins Yahoo Finance Live to discuss how Americans are planning travel and flights for 2022, younger Americans taking trips and buying experiences, the projected demand in the travel industry, and airfare prices.

Video transcript

BRAD SMITH: Welcome back, everyone. With summer travel season on the horizon, Americans who delayed travel plans during 2021 are looking to finally take that Pinterest board trip. Melanie Lieberman, who is the global features editor at The Points Guy, joins us now with the anticipated demand from travelers. Melanie, great to have you here with us. NerdWallet survey data just out today found that 70% of people are planning travel, leisure travel, particularly, in 2022. What role do we anticipate a 2022 bounceback in summer travel would play in the economic reopening? MELANIE LIEBERMAN: This is going to be tremendous, and we've already seen it with spring break. There is so much pent-up demand. As you said, people have been putting off these trips for years now. And there's really just a lot of fatigue with putting travel off any longer. So we are already seeing that flights are up in some cases and some destinations above pre-pandemic levels in terms of fare pricing. Same thing with hotels in certain markets. So this could be a really important moment for the comeback of the travel industry since so many people are ready to hit the road, and they're willing to spend more to do it, quite frankly. BRAD SMITH: Airlines, they have already signaled increased travel demand expectations, but with a rise in energy costs, how much more should people be prepared to pay for travel and accommodations? MELANIE LIEBERMAN: People need to keep an eye on it. And one thing we'll say, no matter what happens next, is that if you are thinking about booking a trip this summer and you haven't already, the time to do so is right now. You don't want to waste another minute because we are seeing that spike in pricing through demand and other pressures on the industry as well. So there's still limited inventory, in many cases, and other factors that could push those rates even higher. So, again, the most important thing for travelers to do is really not to hesitate, lock in those plans. Especially since there is still so much flexibility in the travel industry, it's really better to get those reservations booked and taken care of and then adjust them if you need to in the future. BRAD SMITH: How might that also, in turn, impact spending while you're on these trips? MELANIE LIEBERMAN: Yeah, one thing that we've seen kind of throughout the pandemic since people started traveling again is that they're spending more on bigger, longer, splashier trips. And there's this idea that I don't want to waste another minute on this bucket list adventure that I've had been dreaming about. I know I don't want to put that off any longer. So in addition to people being more comfortable spending more on those sort of key factors, those flights and hotel rooms, we're also seeing that people are taking longer trips, spending more for the experiences when they're there. This could be a summer of travel when people are really opening up their wallets a little bit, in particular because, again, so many people have been sitting on these vacation budgets on points and miles that have been accumulating throughout the pandemic. That is also fueling the increased spend that we're seeing on summer travel and travel throughout the rest of the year. BRAD SMITH: OK, so let's talk about the fun stuff. What are the types of experiences that people are really spending, buying into for their trips and for their leisure travel? MELANIE LIEBERMAN: Yeah, one thing that we are seeing is that people are spending more to have more flexibility. So that might not be the most fun thing we can talk about, but it is definitely a way that people are spending their money. They want those more flexible fares that they know they can cancel for a full refund. But we're also seeing people spend more for that value-added incentive. And then some of the things that we've seen throughout the pandemic are people spending more for maybe their first business or first class flight. People during the pandemic who were traveling were often spending more for more space and more time and more flexibility. And so that, I think, is translating to longer, more fun, and more comfortable vacations, even in the leisure sector as well. BRAD SMITH: Can attest. They got me on the seat upgrade in my last trip, at least. So we got to know as well-- rewards points. Even as we're looking across higher prices year over year, are rewards points as effective in this environment? MELANIE LIEBERMAN: Definitely. Using your points and miles is a great way to really protect your investment in travel. First of all, you have more flexibility. Your cash isn't on the line. If you're thinking about booking that first trip since the onset of the pandemic and you maybe have some reservations, using your points and miles in this way makes it really easy to change your plans if you need to, again, without having cash on the line or worrying about whether or not you'll get a full refund if you do have to change. But then they can also translate to experiences that might just be prohibitively expensive with cash. So you can definitely find great deals using your points and miles on business class flights, on that hotel suite that you've been eyeing. They really can unlock some really great experiences when you're ready to get back out there. BRAD SMITH: Melanie Lieberman, who is The Points Guy global features editor, joining us today. Melanie, appreciate the time once again.