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U.S. hotel prices are getting cheaper, even as airfares soar

The cost of a flight over Labor Day weekend will be higher compared to one year ago, thanks in part to fuel prices and labor shortages.

U.S. hotels will cost $189 per night on average this Labor Day weekend, up 6% compared to last year, but down from this summer’s peak in June of $193 per night.

That's according to the travel booking app Hopper, which says the current decrease is part of a seasonal decline that coincides with the end of the summer travel season and the beginning of the new school year.

But Hopper says prices for hotel accommodations are one of the few areas in which travelers can expect relief ahead of the end-of-summer holiday, as labor shortages and elevated fuel prices persist across the travel market.

While the cost of lodging is projected to fall, plane tickets are still going to take a large chunk out of travelers' wallets. Domestic airfare over Labor Day weekend is expected to cost Americans an average of $278 round trip, a 23% increase compared to last year and up 20% since 2019 over the same period, Hopper projects.

"High demand and limited capacity are putting upward pressure on Labor Day weekend airfare," Hopper lead economist Hayley Berg said in an email.

It's the ongoing result of what has turned into one of the worst summer travel seasons in recent memory. On top of sky-high jet fuel prices, airlines have been plagued with shortages of pilots and air traffic controllers. As carriers scheduled more flights than they could effectively staff, travelers have encountered delays and cancellations at nearly every turn.

The Federal Aviation Administration issued an unusually specific warning Monday for air travelers in the New York City area, warning that staffing shortages there could cause delays of as long as two hours. The issue was ultimately resolved hours later.

Finally, some airlines have resorted to cutting flights entirely, something that will ultimately reduce delays and cancellations but lead to even greater headaches for those directly affected, while putting overall upward pressure on airfare.

"Demand is far outpacing supply of flights, and seats available to book," Berg said.

If you're looking for savings on airfare this Labor Day, Hopper recommends being flexible with your travel dates, noting that Saturday airfares can be as much as 26% cheaper than those scheduled for Thursdays. And flying after Labor Day (say, on Wednesday) can net 21% in savings compared to flying that Monday.

As for hotels, Hopper recommends booking as far out in advance as possible, noting that destinations in larger cities like New York City, Boston, Dallas and Chicago are more likely to feature last-minute deals.