Skip to main content

Inflation -- its tricky to calculated

Lets say that 10 years ago I wanted to fly to Chicago from Montreal -- I call my travel agent (in my case AMEX) and they would book a flight and I would be charged by AMEX.  The rate was the rate and is in Sleepless in Seatle "no one knows what the airline charges". However, for inflation purpose, the data was available to the government's statistical office.  Taking a large number of Flight Montreal to Chicago you got a price for the flight!

Now move the clock to 2018, you want to buy a flight from Montreal to Chicago, you take your phone and open Expedia and take the flight that fits your requirement!  That data also goes into the government statistical office.

Now comes to fun part, you've got to provide additional information; at the same time the airline charges you for extra benefits:  Want food on board, want a better seat, got luggage?  All these are now additional fees (and sometimes for a substantial amount of cash).  So a plane ticket that cost $300.00 is now looking more like $475.

Are these figures included in the travel costs?  Funny enough they are not.  So today when the CPI came out (for the US) two items saw price falls -- airline and hotel.    The first made no senses since fuel costs have risen quickly and they account for nearly 30% of an airline's operating costs.  The hotel is harder to figure out.  Inflation on hotels turned negative 4% last month (annualized basis) which is the single largest drop --- no one has explanations for that.

However, if you go on the internet there are a lot of comments on how hotels have started charging for "extras" that were "free" in the past -- from parking to extra beds in the room.  I don't know how much of this is an urban legend or a real shift int he business model.  I know that's how cruise ship function -- giving you a 7-day package to which you add "goodies". 

Anyway, fun stuff!




Comments

Post a Comment

Popular posts from this blog

Spray painting Taylor Swift G650 aircraft (updated)

 First, a bit of paint will not harm anyone.  These climate activities are going to learn two things in the next few days:  (1) Trespassing at an airport is a felony almost anywhere in the world.  That means criminal prosecution.   (2) removing paint from an aircraft is expensive.   So these climate activists are about to find out the reach of the British criminal system and it will not be pleasant, the UK has very strict laws about that, I would be surprised if cleaning the aircraft of all the paint will cost less than $100,000.     I am sure that when they planned (premeditation) this little show they had a very valid logic to doing this.  Tonight, they are probably realizing the depth of their troubles.   I understand that in the UK it's a minimum one-year jail sentence.    Also, good luck travelling with a criminal trespass charge against you.  I am relatively certain that the airline industry will ...
Post a Comment
Read more

Tariffs on inhabited Island

 Two seldom-visited islands, part of Australia, saw a massive increase in the tariffs they will face when exporting to the United States.   The 32,000 residents did not have much to say...being Penguines.   NO kidding, massive tariffs were imposed on Heard Island and McDonald Islands.  According to the Australian government, the last visitor to Heard was about a decade ago.   Never mind the 47% tariff on Madagascar, where the principal export is Vanilla and the GDP per capita is less than $500 a year. Not only a Stable Genus but evidently an administration that took all of two hours to proof the list of countries.    They also treated St Pierre & Miquelon, two islands part of France in the middle of the St Lawrence Gulf...
Post a Comment
Read more

Britain, France and Egypt

 The voters realize now that the Conservative Praty desire to return to 19th-century dominance has driven its hatred of the EU.  The voters realize now that departure from the EU has accelerated Britain's decline and may soon make it irrelevant.  At best it will have to kiss American arses to maintain its standing.  For this, the conservatives were punished.  The decline of Britain was inevitable, competition from Frankfurt and Germany in Finance was bound to grow.  The core of Europe (aka Germany) is aging quickly Macron seems to be winning his bet, the left alliance that won the legislative elections will not remain united for long, since they disagree on about everything.   The Far right though it was about to assume power is once again relegated to the back of the bus.   It may draw its own conclusions, but not all of these are good for France.  The far-right has won nearly 1/3rd of the electorate, that is not something to be ig...
Post a Comment
Read more