International travel surges while domestic airfares, hotel rates lag

The competition for travel dollars is heating up, and the U.S. is losing out.

Airlines and hotel chains in recent weeks have reported a surge in bookings for international trips — along with rising prices.

That’s a boon to companies with global offerings, but a new challenge for airlines, theme parks and hotels that are more focused within the U.S. as travelers increasingly opt for locations abroad at the expense of domestic destinations.

International airfare is averaging $962, up 10% from last year and 26% from 2019, according to fare-tracking company Hopper. Domestic airfare, meanwhile, is falling. Roundtrips within the U.S. are down 11% from last year and 12% from 2019 at an average price of $249.

The shift is being felt at hotels too: Room rates for Europe hotels averaged $148.88 in the first half of the year, up nearly 14% from last year, while U.S. hotel rates rose just 6% from the same period a year earlier to $154.45, according to data from CoStar, the parent company of hotel-industry analysis firm STR.

Nightly rates at luxury hotels in Paris, for example, rose more than 22% in the first half of the year from a year earlier, while luxury hotel rates in Orlando, Florida, rose just 0.2%, CoStar data show.

Marriott International on Tuesday said second-quarter revenue per available room rose 6% year over year in the U.S. and Canada. The growth in international markets was more than 39%.

Nightly rates for Marriott luxury properties, like JW Marriott, The Ritz-Carlton and Edition in the U.S. and Canada ticked 1% down year over year.

Marriott finance chief Kathleen Oberg said the trend started more than a year ago, and noted that customers now have more options for places to go.

“That’s clear that when you look at the travel patterns this year that there is a big exodus of Americans going over to Europe and other places in the world,” she said on the company’s second-quarter earnings call on Tuesday.

Jesse Inman is one of those travelers opting for trips abroad. The 29-year-old, who left a software sales job earlier this year to build a farm with his father in North Carolina, is in the middle of a weekslong trip to Israel, the U.K., Austria and France.

Inman said he spent $1,839 on his two flights between the U.S. and Europe. He said he would have…