Welcome to the Bronze Age of Travel: An Inside Look into the Industry's Big Money Problem
Boarding a plane in the 1950s and '60s was a noteworthy experience. Flight attendants dressed in uniforms designed by Dior, and passengers brought out pearls to match their best outfits for the flight. Alcoholic drinks were served in real glasses, food was freshly cooked right before being served, and passengers were treated to socializing lounges and fashion shows.
Yes, the experience was inaccessible to most people, but at a time of unprecedented prosperity, the American dream felt within reach. Traveling glamorously was possible for middle-class workers if they saved up enough to splurge on a vacation in which the journey was almost as alluring as the destination.
While we shouldn’t overly romanticize a time when travel was available only to certain kinds of people, it’s hard not to feel nostalgic in an age when flying feels like being on a Greyhound with wings.
From Aspirational to Hate-Watching
Forget getting shrimp cocktails cooled in an ice swan — I feel fancy when I’m on an international economy flight that gives me free cheap wine. If I’m flying within the U.S., I’m grateful to get water in a plastic cup and two tiny cookies.
For many of us, traveling has become dehumanizing. Middle-class travelers are stuck with options so uncomfortable that an entire industry has developed to sell us foot hammocks, compression socks and anything to make journeys more bearable.
At the same time, social media and shows like “White Lotus” make it painfully obvious that our terrible travel experiences are not universal. For those who have money, the perks of travel’s golden age haven’t disappeared. They’ve actually gotten better. Bottles of Dom Perignon precede three-course à la carte meals made by Michelin-starred chefs. And bar lounges where millionaires socialize in-flight are still very much a thing.
Before the COVID-19 pandemic, as people started to forget the strain of the 2008 recession, we went back to aspiring for the level of luxury that influencers and celebrities sell. Expensive destinations like the Maldives were trending, as many of us believed we could someday save up enough for an overwater bungalow with a slide that leads right into the ocean.
But the pandemic threw the world economy into chaos, and attitudes toward shameless displays of wealth are changing. Yes, we all love “White Lotus,” but mostly because it shows us that rich people can’t buy their way out of unhappiness. And if we can hate-watch their adventures while they’re in gorgeous Four Season resorts (that most of us will never afford), even better.
Of course, nobody expects economy and luxury travel to look the same. We all understand that a different price tag equals a different experience. But is the difference between the two experiences actually justified? And does it reflect a wider societal pattern?
Let’s dig a little deeper.
A Disappearing Middle Class
The economy is a complex topic, but there is one thing that is indisputable: The middle class is worse off financially than it was at the end of the 20th century.
When adjusted for inflation, the median household income for the middle 20 percent of earners in 1989 was $57,743, compared to $68,938 in 2019. This means that middle-class workers are earning only $11,195 more than they would’ve made when the Berlin Wall was still up. And if you think that’s bad, the 30-year gain for the lowest 20 percent of earners is a paltry $1,324.
Meanwhile, inflation between 1993 and 2023 is up by over 108.88 percent. So, wages have stagnated while prices have more than doubled.
“Looking across the nation, there has not been an increase in workers’ spending power over the past several years," declares Dr. Daniel Altman, the chief economist at Instawork, an app that connects businesses with hourly workers. "And that’s the resumption of a trend that we’ve seen for decades now.”
All of this to say that, no, you’re not imagining that things are more difficult now than they were in the past few decades. The travel industry is no different.
No Industry Is an Island
Dr. Altman claims that the conflict in Ukraine, supply-chain issues and a shortage of affordable housing are contributing factors to the high inflation that is choking us right now. The travel industry isn’t immune to this economic landscape. “Energy prices are high, and that’s one of the major costs of travel,” he notes.
Another issue is the staffing shortage that is affecting 79 percent of hotels and several airlines. Remember the scheduling and cancellation chaos that left thousands of people stuck in random places in 2022? They were the direct result of unfulfilled positions and a failure to accurately forecast demand, says FlightHub CEO Chris Cave.
In response, hotels and airlines are increasing wages and offering more benefits in order to attract employees. Higher labor costs, Dr. Altman points out, are tied to rising prices. (But, hey, if it means better working conditions, all travelers should be happy to take on that extra cost.)
And then there is the question of supply and demand. If you’re on social media, you’ve probably noticed that everyone, their mother and their dog is traveling like their life depends on it. As the world opens up, people are hungry for adventure, and the industry is struggling to keep up with a surge in demand. For airlines, not all routes are back to pre-pandemic schedule capacities. “That weighs in when you’re talking about offer and demand and the ability to get a ticket at a great price,” acknowledges Cave.
Hotels are facing a similar issue. Matt Schuyler, the chief brand officer at Hilton, states that the company has “seen tremendous pent-up demand for travel as we rebound from the pandemic, ultimately impacting pricing.”
In short, inflation is making materials, fuel and food more expensive. Hotels and airlines are (thankfully) having to pay their staff better. And there is less availability of flights and hotels but also more demand. The cards are all stacked up against economy travelers.
Price Is the Middle-Class Priority
Ironically, while unemployment is lower than it’s been in the past 70 years, according to Dr. Altman, many people still struggle to make ends meet. About three-quarters of Instawork users “are using the extra money [they earn on the platform] on essentials … to close the gap in their monthly budgets.” In these times of economic uncertainty, he would expect people to spend less on non-essential expenses (like travel).
But that’s not really what’s happening. At least not yet. Cave assures that, right now, people are booking travel despite the higher prices because there is still pent-up demand from the years we spent locked up. Zach Demuth — global head of hotels research at JLL, a commercial real estate advisory firm and one of the largest global hotel real estate brokers — agrees. “Individuals continue to prioritize spending on experiences relative to consumer goods,” he mentions.
Demuth also observes that people are prioritizing travel ahead of even healthcare for the first time ever. Or at least since we have data on it.
How are economy travelers managing this contradiction? We’re placing price above almost everything. Of course, everyone wants nice things. But the 21st century’s multiple crises have made people realize that material things can be lost at any moment. Memories of incredible experiences, however, are something neither an economic crash nor a pandemic cannot take away. This translates into the middle class opting for multiple budget vacations rather than one luxury getaway per year.
You’ve probably faced this dilemma yourself: Buy that $120 Frontier ticket to the Dominican Republic, or spend $400 for the right to bring a carry on and not be dehydrated on a flight? Last June, I justified the discomfort by telling myself that the extra $280 I would save could be spent on incredible tours, or on a flight to my next destination. And I’m not alone in that logic.
“The economy segment has grown dramatically in demand, and 77 percent of [Hilton’s] target traveler annually stays in an economy brand,” shares Schuyler, adding that 43 percent of the overall hotel industry is made up of economy-class properties. In my experience, this rings true. I’ve heard friends and family say hundreds of times that they’d rather stay in a cheaper hotel because they’ll “just be there to sleep.”
This is the bronze age of travel, in which we’ll settle for a less shiny metal because a trip is a trip, and not traveling at all seems like a worse alternative.
It Pays to Be Rich
What makes the economic situation and the state of travel for the middle class so frustrating is that it isn’t a universal experience. Real-life “White Lotus” characters might as well live on a different planet where every whim is immediately met.
Remember how wages for middle-income earners rose only about $11,000 in 30 years? For the upper 5 percent of earners, the gain during the same time period was a staggering $175,265 — or $451,122 in 2019 compared to $275,857 in 1989.
Many of these high-earners were formerly regular people. While the middle class has shrunk by 11 percent, 7 percent rose to the upper class. We also have more billionaires today than ever before. Forbes’ original 1987 list of billionaires included 140 people. In 2023, the same list counted 2,668 people worth 10 figures.
But don’t be mistaken. While there are more rich people, the distribution-of-wealth gap is widening. Between 1989 and 2019, the top 1 percent of families went from owning 25 percent of the national wealth to owning around 34 percent.
In contrast, the middle 40 percent of earners went from 35 to 27 percent of wealth. And the bottom 50, whose share of the pie was only 5 percent in 1989, now have to content themselves with a meager 2 percent.
If you’ve ever wondered why millennials can’t afford the houses and the trips to Hawaii that their middle-class parents easily paid for, this is the answer.
Just like economy travelers, luxury vacationers want amazing experiences. The difference is that they don’t have to choose between making memories and buying expensive material goods. Nor do they have to worry about balancing budgets with the frequency of travel. Dr. Altman notes that “the bulk of spending on leisure and hospitality comes from people with higher incomes.”
These customers are treated to amenities most of us wouldn’t even dream of demanding. With a first-class ticket on Emirates, for example, customers can expect a complimentary chauffeur to the airport, a lie-flat bed, a Bvlgary toiletry kit and — get this — a full-sized shower. Yes, that Singapore Airlines scene on “Crazy Rich Asians” in which they get to sleep comfortably on the plane was not fiction. There are people enjoying full comfort and privacy in the air, physically separated from us peasants by curtains so we can’t interrupt their cocktail hour.
Luxury hotel amenities are just as jaw-dropping. At the Four Seasons Resort Vail in Colorado, for instance, winter-season guests can expect a personal ski concierge, who is tasked with cleaning and preparing equipment for the next day, among other things. Other hotels offer up Maseratis, Rolls-Royces and other luxury cars for guests to use during their stay. Even rich pets can expect things like branded bowls, special massages and specially prepared gourmet meals.
Try to forget all this the next time you’re trying to sleep in a musty hotel room after an abysmal flight on Spirit Airlines.
Prices in a Post-Pandemic World
The world was already struggling with inequality and inflation before 2020, but the pandemic threw kerosene over the situation and lit it on fire. During lockdown, people with large disposable incomes and white-collar jobs that could be done remotely found out that there was only so much money they could spend on take out, Zoom exercise classes and random hobbies. Instead, most of what they would’ve normally spent on travel, dining or entertainment went straight to the bank.
“By the end of 2021, there were probably around $2 trillion in extra savings available to fund all of this pent-up demand for services,” Dr. Altman observes. But most of it “was built by wealthy people who have financial asset portfolios” and a large budget for discretionary spending.
Now that they can freely go back into the world, these high-income earners are willing to spend their extra savings on incredible experiences, price be dammed. Not that there is anything wrong with this. If you can afford that glamorous trip to the Italian lakes after a traumatic couple of years, treat yourself. But this does pose a dilemma for economy travelers.
Many middle-class workers saved all or part of the Economic Impact Payments sent by the government. Still, their savings can’t compete with that of high-income earners who are willing to pay more for trips. The game of supply and demand that we’ve mentioned is rigged to have a clear winner. And it definitely isn’t economy travelers.
A New Class Rises
Many of the 7 percent of people who’ve risen from the upper middle class to become elite aren’t necessarily multimillionaires. They’re rich — that’s undeniable — but their wealth isn’t infinite. As their numbers rise, so does the type of traveler willing to spend good money on comfort while looking for a good deal.
Different services are now popping up in order to cater to what we’ll call bougie-adjacent travelers. One such service is JSX, an air carrier that offers semi-private jet flights. People flying on JSX can arrive 20 minutes before their flight, go through a quicker security process and don’t have to worry about absurd TSA liquid restrictions.
Surprisingly, customers aren’t all extremely wealthy. The company’s director of marketing and communication, Ben Kaufman, reveals that, while some customers are private jet owners who want to save fuel when traveling solo, there are also former JetBlue or Spirit Airlines customers. He believes travelers often make the choice to fly JSX because the surcharge is accessible and the perks are worth it.
This type of traveler sits in the middle of the game. They can spend a few extra hundred dollars for a better experience, but they won’t be paying $200,000 for the four-day package in the underwater room at the Conrad Maldives Rangali Island.
Is the Travel Industry Scrooging Us Over?
Given all of this information, it’s easy to be bitter against the travel industry. But our bitterness might be placed on the wrong target. The industry, after all, reacts to the trends and demands of the market.
For instance, when Marriott announced that it would stop providing full daily cleaning services at some of its brands, people reacted with outrage. It seemed like one more thing that the industry was taking away. Demuth posits that this decision was likely based on what customers had already been demanding.
While it’s frustrating for leisure travelers not to feel pampered on their vacation, he asserts that 80 percent of hotel guests in the U.S. are business and group travelers who don’t need the same services because they’re not treating themselves to a special trip. Even pre-COVID, he adds, “it wasn’t atypical to see 50 or 60 percent of the guests on a given night refusing any sort of service.”
“Hotels don’t want to create a-la-carte pricing … but they’re cognizant of price fairness and parity,” Demuth comments. A major complaint that customers had was having to pay for services they weren’t using. Plus, “by cutting those services, hotels can keep their rates lower, so that actually has a net positive on the consumer side,” in his perspective.
In an age where economy travelers are looking to cut costs whenever possible, it seems like a fair trade.
Demuth also underscores that “hotels have the ability to change their rates on a daily basis … and because of that, they’re the only asset class that can keep up with inflation.” When we see that hotel prices are rising, “the reality is that they’re rising at the same rate as inflation … which is higher than it’s been since the 1980s.”
So, if your hotel stay is more expensive, it’s mostly because everything is more expensive. Luckily, as inflation is going down and stabilizing, so are hotel rates.
The stripping away of airline perks that we’ve witnessed (or rather, suffered) in the past decade is also a response to market trends. “Basic economy is a pricing strategy that airlines have adopted in North America to compete with lower-cost carriers,” Cave says. “Whether we had inflation or not, the American Airlines of this world would have had to have a basic economy class to be able to compete with the Spirits of the world in the U.S.”
Because as much as we all love to complain about low-cost carriers treating us like cattle, at the end of the day, we’re going to choose the cheapest ticket. Since 2000, average ticket prices have steadily gone down by around $198.
Is saving $200 worth losing the right to water, a carry-on and being treated with basic human decency? For people who don’t have much of a choice, yes.
You Get What You Pay For. Or Do You?
On the other side of the coin, the industry is offering more outlandish amenities to wealthy travelers because prices for luxury services have gone up exorbitantly. Demuth explains that “customers for years have said, ‘Well, what is it that I’m paying for?’ — so now hotels are reacting by offering more amenities to semi-justify increasing rates.”
It’s unfair that the upper classes get to shower on a long-haul flight while others have to use a tiny bathroom with pee all over the floors. However, let’s put things into perspective: At the time of writing, the lowest fare on an Emirates flight from JFK in New York City to Dubai in the United Arab Emirates would set you back $1,507.75. A glamorous first-class ticket on the same flight would cost $30,412.75.
Paying an extra $28,905 just to have nicer food and a shower honestly seems like a scam. And if people have so much money that they want to waste it like this, we can’t blame airlines for wanting to profit from that.
It can still be frustrating for those of us who get scraps. But it would be inaccurate to say that the industry is responsible for this inequity. The culprit is the entire economic system that has for years allowed prices to increase while keeping wages stagnant and widening the horrifying gap of income inequality.
Travel is just one cog in the dysfunctional machine that continuously gives middle- and low-income earners less while stuffing the pockets of high-income earners.
To Infinity and Beyond
Can travelers expect a different — perhaps brighter — future? It’s hard to say.
Dr. Altman expects “extra savings built up earlier in the pandemic [to] be drawn down even more this year, and the gap in affordability between middle-class and wealthy consumers will probably narrow somewhat.” Since pent-up demand is lower and prices are higher, he thinks discretionary spending will cool down, and this might help to bring prices back down.
On the other hand, Cave believes that “as the economy stabilizes, and we put the pandemic further behind us and eliminate all restrictions in all geographic markets, demand will continue to grow. The pent-up demand from the last two years will still be with us for a little while longer.”
Only time will tell whose prediction is correct.
Still, not everything is bleak. As technology advances and the industry adapts to the demand for low-cost travel, it’s possible that seeing the world might become more accessible to a larger number of people.
It might not be glamorous, but it will be an adventure.