- As the vaccination rate picks up, demand is outpacing the supplies of many key goods.
- Americans will face several prices hikes and shortages this Memorial Day.
- Insider rounded up all the products that may be difficult to find over the holiday weekend.
- See more stories on Insider’s business page.
Everywhere you look, there seems to be a new shortage popping up in America’s currently very strange economy. From chicken to gas, it’s getting harder to come by items as supply-chain issues, outsized demand, and the climate crisis all converge to choke accessibility.
But as Americans learn to live in a new normal yet again – this time with vaccines, fewer masks, and slightly eased pandemic-era restrictions – demand for things like travel and hotels is on the rise. With a long weekend coming up, Americans are ready to get back into the world. But the economy may not be ready for them: Here are the shortages that could plague Memorial Day weekend.
Vacation-home rentals in the US are at an all-time high this year.
More people are looking to travel as the vaccination rate increases. In the US, 65% of people plan to travel more this year than before the pandemic started and 82% of families have already made vacation plans, according to online rental hub Vrbo.
If you haven’t rented out a vacation home yet, it might be too late to find one this year: 85% of vacation rentals in Cape Cod, the Outer Banks, and along the Jersey shore, are booked through August, Vrbo said.
Hotels and motels
It’s not just vacation and rental homes seeing a surge: Hotels and motels saw their costs increase by 8.8% in April, according to the Bureau of Labor Statistics.
CNBC reports that nightly prices are on the rise, and are likely only to increase as summer travel goes into full swing. In fact, prices in coveted areas, like beaches, have soared above pre-pandemic levels.
While some industries say they’re struggling to find workers and staff up, the leisure and hospitality sector actually saw notable gains in April’s jobs report. While the report came in far below expectations — with just 266,000 jobs added, instead of the expected 1 million — leisure and hospitality emerged the strongest.
The industry added 331,000 payrolls. While that’s a promising sign of recovery, some experts say even those additions aren’t coming fast enough.
Americans looking to hit the road for Memorial Day weekend will face soaring gas prices.
The price of fuel surged to a seven-year high on Wednesday. Fallout from a cyberattack on the nation’s largest fuel pipeline devastated the supply chain, pushing the average price in the US over $3 per gallon. The 5,500-mile oil pipeline reopened on Thursday, but Reuters reported it could take weeks for fuel supply to return to normal, after consumers rushed to stock up on gasoline over the week.
Prior to the cyberattack last weekend, prices were not expected to see another significant spike until after Memorial Day, when travel is expected to push demand even higher at the end of the month.
But, even before the pipeline was shut down, gas prices were skyrocketing as demand outstrips dwindling fuel supplies. In April, fuel prices leaped 9% in their largest one-month increase in nine years as shipping container shortages, port delays, and OPEC production cuts made the commodity increasingly valuable.
A new or used car
If you wanted to buy a car for that summer road trip you’ve been planning since March 2020, you may find yourself up against some fierce competition — and ever-increasing prices.
New cars are in short supply due to an ongoing shortage of the computer chips that power everything from the Bluetooth in cars to iPads, and their scarcity has been felt all over the economy. Some car manufacturers had to halt production at the start of the year, leading to more elusive models and higher prices.
That’s trickled down into the used-car market. In April, used car prices jumped by 10%. Insider’s Ben Winck reported that that was the largest one-month increase since 1953, when data first started to get collected. In fact, that price jump accounted for around a third of April’s big 0.8% jump in inflation from the previous month.
Experts attribute the shortage to demand for vehicles, especially as new cars are harder to come by, and rental car services attempting to rebuild fleets; many sold off some of their cars at the onset of the pandemic.
Rental cars are also in high demand. As Americans clamor to travel again, there’s a “perfect storm” brewing, Insider’s Brittany Chang reports.
In hot tourist destinations, prices are surging; Jonathan Weinberg, the founder and CEO of AutoSlash, told Chang that some rental cars in Hawaii are going for over $500 a day — a massive increase from the usual $50. And rental car companies are expecting strong demand over the summer for their reduced fleets, all while coming up against the computer chip shortage.
But vacation goers might still find it expensive and difficult to get around if they’re counting on rideshare drivers. Uber and Lyft have been trying to lure drivers back to work with new incentives, but there’s still a persistent driver shortage. That’s due to a variety of factors, as drivers worry about safety and find stability in enhanced stimulus benefits.
If you’re planning on jetsetting over Memorial Day weekend, you may find the shockingly low flight prices of the pandemic have vanished.
In April, airline fares increased by 10.2%, according to the Bureau of Labor Statistics.
That’s not to say there aren’t deals, as airlines unleashed a week of wild international flight deals in April; the risk with those, as Insider’s Tom Pallini reported, is that it’s unclear if those countries will be open to American visitors.
But, as the Washington Post reports, it could be a different story for domestic flights, especially over the summer. Rising demand and fares could be concentrated over the summer, as Americans race to take advantage of the weather and newly loosened pandemic restrictions.
Adit Damodaran, an economist at travel booking app Hopper, told Insider’s Jamie Ditaranto that demand is concentrated around late May and early June — and that prices may rise by 15%.
Bacon and hot dogs
Memorial Day barbeques will be impacted by the supply snags.
Bacon and hot dogs may be difficult to find in grocery stores, due to a global pig shortage. The hog industry has faced several setbacks this past year. High instances of swine decimated hog populations this past winter and COVID-19 outbreaks in at least 167 meat-processing plants forcing almost 40 plants to close as of June 2020.
Demand will likely outstrip supply as people stock up on the meat for cookouts on Memorial Day weekend.
It will be more expensive to celebrate the holiday with fireworks this year.
Superior Fireworks announced they were increasing their prices about 15% this year — the highest the company has ever had to hike prices in its 20-year history.
The company is one of many fireworks producers that have been forced to raise prices in order to compensate for higher shipping and production costs.
Vacationers looking to relax in the pool during the holiday weekend may face difficulty finding clean pools.
Last month CNBC reported the US is facing the worst chlorine shortage in history. Prices for the chemical used to clean pools has nearly doubled this past year and is only expected to continue to rise with warm weather.
Pool owners can avoid the shortage by using saltwater pools instead, according to Insider’s Annabelle Williams.
Imported goods like wine and cheese
Vacationers will pay top dollar for imported food.
Good from overseas, including seafood, cheese, and wine are facing months of shipping delays. Some grocery stores, including Costco have already reported shortage of imported food, while other companies have already begun to hike prices in response.
People looking to eat out over the holiday weekend may find difficulty getting service at local restaurants.
Major labor shortages have rocked the restaurant industry. After laying off millions of workers at the onset of the pandemic, many restaurants are struggling to bring workers back as they reopen.
Restaurant chains have rolled out new incentives to lure employees back, according to Insider’s Kate Taylor. But, many frontline workers are hesitant to return to work over concerns regarding COVID-19 safety, as well as childcare, Insider’s Ayelet Sheffey reported.