The cost of Thanksgiving is going to be higher for 2010.  There is often no better comparison than any fixed points in time around key memorable events, and Thanksgiving is a time that is easy to compare apples to apples or even turkeys to turkeys.  We took a look at several metrics that would all play into the costs and inflation of Thanksgiving.  It turns out that there is some inflation alive and well during this year’s holiday time right around the same time that the Federal Reserve is trying to manufacture some inflation.  The economy of 2010 is in a better spot than compared to a year ago even if many of the broad and key economic data points are mixed when you consider where things are now comparing a late-2010 to late-2009 against a late-2009 to late-2008 comparison.

For starters, the actual Thanksgiving dinner is expected to be higher in price.  There are other things to consider that are much harder to get hard data on objectively as the figures vary from source to source and not all travelers get the same price.  To consider the real cost increase of Thanksgiving, you have to take into consideration the prices of gasoline to get to and from the Thanksgiving dinner, airfare ticker prices, and of course the hotels at the destination of travelers.

The long and short answer is that prices are higher across the board.  Much is of course nothing more than a common sense observation of travel prices if you gone elsewhere in recent weeks and looked at your prices compared to a year ago.  Other data has been quantified by outside sources where available.  If you have traveled in late-2010 versus late-2009, you might not need to be told the quantified data.  Flights are fuller and more expensive.  Hotels are fuller and more expensive.  Gasoline prices are also higher.  We have gone to multiple sources to cobble together some quantified figures on each aspect of Thanksgiving’s obvious price components.

The American Farm Bureau Federation noted that an average price for a 10-person Thanksgiving dinner will run close to $43.47 in 2010, up $0.56 from 2009’s average of $42.91.  Where the comparison falls apart is during the higher commodity prices of 2008 when that price was $44.61 at the same time that the markets and the economy were on the slide.

In airfare, a report this month from the Air Transport Association (ATA) projected that about 24 million people will fly during the 12-day period surrounding Thanksgiving Day. That would be up 3.4% from a year ago, and the airplane load factors are higher and projected to be about 90%.  Farecompare.com threw a figure of 17% to 18% in some cities with higher airfare costs when comparing 2010 to 2009.  Microsoft’s Bing Fareologists were originally back in September expecting a 3% drop with an average of $310 per domestic ticket.  On a personal note, a year ago had much cheap airfare for ANY destination we as a family looked at for Thanksgiving.  AAA noted that leisure air travel is expected to be about 4% of overall travel with 1.62 million holiday flyers, up about 3.5% from last year’s 1.57 million flyers.  AAA’s Leisure Travel Index showed that airfare is expected to be up 4% from last year and the average lowest round-trip rate is $176 for the top 40 U.S. air routes.

I then looked up a chart price for my own city of Houston to see what I already knew to be the case: higher gasoline prices.  A year ago was closer to a range of $2.43 to $2.45 per gallon versus $2.66 this week.  The U.S. average shown at Gasbuddy.com was shown as $2.64 per gallon a year ago and about $2.87 so far this week.  AAA gave a figure that the national average of self-serve regular gasoline will remain between $2.85 and $2.95 per gallon during the Thanksgiving holiday travel period.

The cost of a hotel room is higher as well, something that is more than evident if you traveled and stayed in a hotel in recent weeks and months.  Hotel rates for AAA Three Diamond lodgings are expected to be 6% higher at an average of $136 per night compared to $128 in 2009; and AAA Two Diamond rooms are expected to be 4% with an average cost of $96 per night.

AAA projected that the number of Americans traveling for the Thanksgiving holiday will increase 11.4% from 2009 with some 42.2 million taking a trip at least 50 miles away from home.  Costs are up, but it is all relative… 2010 total travel is expected to be nearly 30% under the 2005 peak when there were 58.6 million travelers.  AAA also gave a different figure, but maybe their surveys were based upon hope rather than real costs as we are seeing.

A survey of traveler intentions from AAA showed the average distance traveled by Americans this Thanksgiving holiday is expected to be 816 miles, virtually the same as one year ago at 815 miles. Median spending is expected to be $495, also roughly the same as last year when median spending was $494.  Perhaps it is the car rentals that we did not look at as many can go without renting a car.  Weekend daily car rental rates are expected to fall by -4% to an average of $42 per AAA data.  If you rent a car, great.  You get a break.  If not, everything else is higher from gasoline to food to hotels to airfare.

TSA’s elevated security measures with the pat downs and more came on too late for travelers to come up with excuses not to travel this year.  Things aren’t as bad as they were a year ago and more are willing to part ways with a little more cash.  The costs are just going to be a bit higher for Thanksgiving in 2010.  As far as what to expect for the 2010 Christmas and the holiday season a month from now, expect more of the same.

JON C. OGG

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