Adobe Digital Economy Index: Flight prices fall as COVID-19 dampens demand — Thanksgiving bookings off to slow start

Airplane flying over blue water.

Adobe Stock / Naypong Studio.

The Adobe Digital Economy Index continues to track the airline recovery, as the COVID-19 Delta variant impacts travel plans. In the last Adobe report, figures from July 2021 and August 2021 (first 3 weeks) showed the path to recovery had been dulled— and the landscape continues to be volatile. Today, Adobe is issuing a full readout for August, as well as the first 10 days of September.

Domestic flight bookings in August 2021 drove $4 billion in online spend, 35 percent below 2019 levels (compared to August 2019 spend). This represents a 24 percent decline from the month prior (July 2021, $5.26 billion). From January through August 2021 (year-to-date), a total of $38 billion have been spent so far, down 30 percent compared to the same period in 2019.

“Historically, July and August have similar consumer spending levels when it comes to domestic flight bookings,” says Vivek Pandya, lead analyst, Adobe Digital Insights. “The fact that August came in over $1.2 billion under July is striking when you consider the historical benchmark, and it shows how much the Delta variant has shaped what consumers feel about air travel.”

Graph of the US Domestic Flight Revenue.

Flight prices began to fall again after rising for the first time in July. In August 2021, prices were 11 percent below 2019 levels, on par with what consumers saw in April. For reference: July 2021 prices were right at 2019 levels — June 2021 prices were 1 percent lower than 2019 levels (May: 8 percent lower — April: 13 percent lower — Mar: 17 percent lower — Feb: 26 percent lower — Jan: 28 percent lower).

In the first 10 days of September, the trendlines have remained consistent (falling flight prices, depressed bookings). $1.5 billion have been spent so far from September 1–10 on domestic flights, which is 39 percent below the same period in 2019. Flight prices have dropped even further, 22 percent below 2019 levels.

Holiday-related bookings in August 2021 are also coming in below 2019 levels. Thanksgiving flight bookings are 18 percent lower than they were at this point in 2019. Note that historically, August is the month when holiday travel plans begin to ramp up. In 2019 for instance, nearly one-fourth (22 percent) of Thanksgiving tickets had been booked by the month of August.

“When we began tracking the airline recovery in 2021, we had expected July to be the tipping point as we’d seen a June rebound where bookings came in just 5 percent below 2019 levels” says Pandya. “As with other parts of the digital economy however, outcomes will be largely shaped by the course of the pandemic. But the early 2021 figures do tell us that the pent-up consumer demand is there, and people are keen to resume travel plans after having spent a lot of time at home.”

Looking ahead to September and October, the top 10 domestic destinations for those traveling (per arrival sites) include: Key West, Florida — Kailua-Kona, Hawaii — Bozeman, Montana — Kahului, Hawaii — Honolulu, Hawaii — Lihue, Hawaii — Orlando, Florida — Las Vegas, Nevada — Palm Springs, California — Portland, Maine.

Methodology: The Adobe Digital Economy Index offers the most comprehensive set of insights of its kind, based on analysis through Adobe Analytics that covers over 150 billion visits to travel, leisure and hospitality sites — measuring transactions from 6 of the top 10 U.S. airlines (more than any other technology company).

For additional research reports on the digital economy, as well as resources for putting the customer first in a digital-first world, visit Adobe’s Digital Economy Hub.