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The Economic Case for Booking Now

Supply and Demand

This is a very simple law that most students learn if not in high school later in college in Economics 101. Supply refers to the amount of goods that are available. Demand refers to how many people want those goods. When supply of a product goes up, the price of a product goes down and demand for the product can rise because it costs loss. When supply of a product is low, and demand is high, prices rise. This simple law has driven "dynamic pricing" (the ever changing pricing algorithm used by airlines, hotels and more) in the travel and tourism sector for decades.

Enter COVID-19.

Leisure travel demand for airline tickets and hotel rooms, safaris and cruises, tours and experiences all dropped to a number approaching zero for most of 2020. Thus, prices fell accordingly...sort of. In the U.S., domestic travel boomed, keeping hotel rates fairly steady as most hotels purposefully kept their "supply" (read: available rooms) low for the purpose of social distancing and enhanced sanitary measures. Even today, most prices remain lower than 2019 highs.

U.S. COVID-19 Vaccination

The U.S. has the 4th highest national percentage of citizens who have had at least one jab of any of the vaccination options. With 20% of the eligible population in the United States already fully vaccinated, and close to 3 million shots administered daily, you can expect domestic leisure travel crowds to be sizable for the remainder of 2021. In fact, some of my suppliers have already told me they are fully booked through October, others are fully booked through the upcoming festive season (that's December 2021, folks!)!!

In fact, according to Skift, the travel industry research leaders, 72% of Americans plan to travel in 2021. You can count on this number to rise when March numbers come out in a few days.

What does this mean?

You don't have to be an economist to realize that this growing demand is going to push prices higher. However, what might be less obvious is the fact that supply is still going to be low. "How is that possible?"you might ask.

Consider this: while we were hunkering down for twelve long months, trips planned for 2020 were postponed into 2021. With lots of uncertainty at the end of 2020 and for the first six weeks of 2021, many more trips - including the ones rolled over from 2020 - were pushed until late 2021 and even into 2022. That's a considerable amount of "inventory" (read: supply) that will make this year and next very tricky to navigate to get the trip you want, need and deserve planned, booked and deposited.

Let me be clear: supply is going to be limited well into 2022, demand is skyrocketing and it is only April 2021. Price will no longer even be part of the discussion if there is nothing to sell...

Of course, there is *always* a destination. There are beautiful corners of our great country whose time to be "discovered" has finally come! Looking forward, though, you can see not only how domestic travel will become pricey and nearly impossible to confirm during peak travel seasons (summer vacation, fall break, holiday), but also how this same trend will flow through to top international destinations like Italy, France, Greece and the U.K. It doesn't end there, after participating in my second Our.Africa pan-African virtual trade show, I can tell you with certainty that this phenomenon will be acutely problematic for "bucket list"worthy splurges like on the African continent where top lodges, guides and experiences are finite in their number.

Impact of Air Travel

Leisure travel will fuel the travel recovery, according to the latest research by McKinsey. The implication is that smaller planes (fewer passengers) will service existing routes. Staggering debt by airlines will push ticket prices higher as demand increases. Furthermore, as demand for air travel returns, it will likely outpace supply initially. It will take time for airlines to restore capacity, and bottlenecks such as delays in bringing aircraft back to service and crew retraining could lead to a supply–demand gap, resulting in higher short-term prices.

Net Net

Book now for any leisure trip, big or small, that you hope to take in 2021 and 2022. You'll save time, money and the heart-ache of FOMO when your forward-looking friends are posting their amazing pictures of their safari in Botswana, their yacht charter in the Cyclades, or room with unobstructed views of the Eiffel Tower.


Olivia is honored to be part of the elite group of travel professionals who make up the Condé Nast Traveler Top Travel Specialists. She loves hotels and is passionate about the transformative power of travel. She started Nash Travel Management because her goal is to make your bucket list come alive! She is one of fewer than 250 agents worldwide who is a certified Virtuoso Wanderlist Advisor and is a charter member of Virtuoso's Sustainability Community. Olivia holds degrees from The Ohio State University, New York University and an MBA in Marketing and Strategy from Vanderbilt University. She, her husband, and two daughters reside in Nashville.


Notes from the CDC:

Because of the potential introduction and spread of new SARS-CoV-2 variants, differences in disease burden and vaccines, and vaccine coverage around the world, CDC is providing the following guidance related to international travel:

  • Fully vaccinated people can travel internationally without getting a COVID-19 test before travel unless it is required by the international destination.

  • Fully vaccinated people do not need to self-quarantine after returning to the United States, unless required by a state or local jurisdiction.

  • Fully vaccinated people must still have a negative COVID-19 test result before they board a flight to the United States and get a COVID-19 test 3 to 5 days after returning from international travel.

  • Fully vaccinated people should continue to take COVID-19 precautions while traveling internationally.

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