Labor Day travelers faced higher costs for flights and hotels as they headed out for the final holiday weekend of summer, according to AAA booking data and travel industry analysts. Domestic airfare rose 2% compared with last year, averaging $750 for a round-trip ticket, while fares to popular destinations ran nearly 20% higher at $790.

Hotel prices also increased, with domestic bookings up 9% and international bookings up 12% compared with last Labor Day weekend. The rising costs reflect multiple factors including higher fuel prices tied to the war in Iran and the growing use of artificial intelligence by travel companies to optimize pricing.

‘We are seeing prices ticking up for airfares most definitely, but also for hotels, for rental cars, for cruise ships,’ said Pauline Frommer, publisher of Frommer’s Travel Guides. ‘Everyone is using this new technology to better understand or to better test what they think the customer will pay.’

For Los Angeles travelers, the impact is twofold. LA residents traveling for the holiday face higher outbound costs, while Southern California’s tourism-dependent economy benefits from increased visitor spending. Los Angeles ranks among AAA’s top domestic Labor Day destinations, alongside Seattle, Orlando, Boston, Denver, and New York.

Not every category saw price increases. International airfare declined 4% year over year, and cruises departing from US ports were 4% cheaper, averaging $2,700 per booking. AAA identified Rome, Vancouver, London, Dublin, and Paris as top international destinations.

Frommer offered several strategies for cost-conscious travelers. ‘The best way to save money is always to travel when nobody else is,’ she said, recommending the first two weeks of December as one of the cheapest travel periods. She also suggested using a VPN to conceal browsing history while booking online and choosing destinations with lower overall costs of living.

For Southern California’s hospitality sector, the Labor Day weekend provides a final boost before the fall season. Higher visitor spending at hotels, restaurants, and attractions supports employment across the region’s tourism economy, which employs hundreds of thousands of workers in the LA metro area alone.

Drivers also faced higher gas prices during the holiday weekend, with AAA noting that current market trends suggest motorists paid more than they did a year ago.

Source: Fox Business