The trend: With jet fuel prices up more than 95% since the start of the war in Iran, several airlines have raised checked bag fees. Delta and United have each increased fees by about $10 per bag, and JetBlue raised fees by $4 to $9, depending on flight timing.

Those higher fees come on top of rapidly rising airfares. Transatlantic flights booked 21 days in advance are already about $200 more expensive on average than a month ago, per a Deutsche Bank analysis cited by Bloomberg. United has also warned it may raise fares by as much as 20% if jet fuel prices remain elevated.

Why it matters: As travel becomes more expensive, fewer consumers will opt to fly. Alternatives aren’t much relief, as driving is getting pricier too, with average gas prices up 73 cents per gallon over the past month, per AAA.

Not surprisingly, Americans are rethinking travel plans as the war in the Middle East disrupts international routes and pushes up the cost of fuel.

The share of US consumers planning vacations abroad or road trips closer to home fell in March, per the Conference Board.

• Just under 17% said they intend to travel internationally over the next six months, the lowest share since the end of 2022.
• Only 22% of respondents expect to travel by automobile in the next six months, the least since 2020, per the Conference Board.

Implications for retailers and restaurants: As monthly costs rise, many consumers have no choice but to look for places to cut back, with travel being an obvious target. That could weigh on discretionary spending, particularly for categories tied to travel and leisure.

Even those who do travel may pull back by choosing cheaper hotels and meals or shortening trips altogether. That, in turn, could dampen overall spending, as tourism typically provides a meaningful boost to both goods and services consumption.

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