I am going to pull out my crystal ball today and wax philosophical on a question that dozens have been pinging me about lately on Twitter @rickseaney.
“Should I wait – or buy now – for my summer trip to Europe?”
To address this topic properly, I am going to start with some historical context and then show you some of the research that I pulled from our proprietary airfare database of current and historical airfare (the world’s largest such database, I might add).
Last year, prices for summer air travel to Europe bottomed out in June – to lows that we haven’t tracked in years. It was not uncommon to find roundtrip airline ticket prices for travel in July, for less than $800 (again, roundtrip – including all taxes and fees). We even saw quite a few for less than $600.
The cheapest flight destinations in Europe from the U.S. for the summer of 2009 were Ireland, Germany, Switzerland and Spain. I expect similar relative pricing this year. Definitely shop these countries this year if you have some flexibility, as trains and low cost airlines abound in Europe.
Now, overall historically (2003-2007), if you could get to Europe in July for under $1000, you had found yourself a bargain (flying out of New York is the notable exception, because it has tons of competition, so airfare from there is slightly lower).
Today, many of you are looking at airline ticket prices in the eye-popping $1400 to $1700 roundtrip range, and are wondering if you should swipe the card now – or even go at all.
Take a look at this airline ticket comparison chart (compiled from our historical database), with average prices from the top 50 cities in the U.S. to the most popular destinations in Europe; it lets you compare prices on purchase dates from the beginning of each year (2009 and 2010), for departures in the month of July.
Average Cheapest Roundtrip (includes all fees and taxes)
Travel from Top 50 US/Canada Cities to “Top” Europe Destinations, July Departures
Let’s dig deeper into this chart:
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For 2009, you’ll note prices fell off a cliff in mid February and bottomed out in late May and early June, and there was a price jump for last minute procrastinators (with a small break at the last minute for ultra-procrastinators). For 2010 there is a completely different picture, as prices have trended down slowly but steadily since the beginning of the year, which reflects strength and, the airlines slowly starting to manage their July inventory of seats with some discounting. However, this airfare data doesn’t tell the entire story because when I’m in forecasting mode, I like to take into account things like:
- Fuel Prices – which have taken a tumble lately (currently fuel surcharges to Europe are averaging well above $250 roundtrip right now and get very volatile with oil above $85/barrel)
- Seat Supply – which has been drawn down pretty dramatically for transoceanic departures compared to 2006 and 2007
- Passenger Demand – especially to the most popular destinations (London, Paris, Rome)
- Nonstop Premiums – airlines charge a premium for the convenience of nonstop flights (prices can be hundreds of dollars lower for connecting flights on the same route)
On the fuel side, before the end of last week I would have expected prices to go higher due to the big oil spill in the Gulf of Mexico, but the one day market crash has changed this situation (at least in the short term) with oil down a bit over its highs the past few months (good news for passengers and airlines – for now).
On the supply and demand side of the equation, I am a bit of a contrarian: I think many U.S. citizens may pass on Europe this year because of the potential hassle of due to volcanic ash (a bit like those that who will pass on Florida and the Caribbean during hurricane season), as well as possible strikes which have infected British Airways (driving down demand — pushing it to destinations closer to home).
Before the “ash event”, my thinking was that there was going to be a lot of pent up demand from those that skipped their trips last year as they were more worried about their jobs and the economy (we all remember that not so friendly word “staycation”).
I could go on, but what you really want to know is whether to buy now or wait, so here goes (and remember – I am a gambler at heart):
I would be looking very aggressively over the next several weeks and expect to see some price drops – and, if you spy anything under $1100 roundtrip (slightly lower from NYC), snap it up.
If you’re a flexible flier, you’ll be able to find a historically decent deal (that is what we specialize in, with our airline ticket price drop alerts by departure date). However, that deal won’t be $700 roundtrip like last year – it may instead be $1000 roundtrip (still good, as that’s a drop of over $150 from current averages).
If you do decide to go — purchase your tickets no later than mid June (just take a look at that price jump from last year); it’ll happen again as the cheapest tickets’ advance purchase requirements expire and airlines only offer the more expensive price points.
You’ll have to stay a Saturday night to get the cheapest Europe prices, and stay no longer than 30 days (if you do not include a Saturday stay, you’ll be treated like a business traveler who can pay triple the usual price).
I recommend you find a cheap “base” to fly to as noted before, and explore from there via air or train; it can save you a bundle. And, as always, pack light because low cost airlines in Europe will hit you with huge bag fees (toss out those three checked-bags – you know who you are).
Plus, don’t forget to keep an eye on currency rates, as the pound is a bargain right now.
So, my recommendations:
Start Shopping for Airfare to Europe Now. Wait a week or two before buying. And definitely swipe that card before mid June.