Higher Gas, Airfare and Hotel Costs Are Pushing Some U.S. Households to Scale Back Summer Trips

The summer travel season is opening with a sharper class divide in household budgets than earlier in the month. Record Memorial Day travel volumes suggest Americans still want to get away, but the latest pricing and spending data show that many families are not approaching those trips the same way. Bank of America Institute said in its May summer travel outlook that lower-income households are much more likely to have no travel plans this year, at nearly 40%, while travel-related spending among those households is already down from a year earlier. That matters now because the price of getting away has risen across several categories at once, not only at the pump.

AAA said 45 million Americans were expected to travel at least 50 miles from home between Thursday, May 21 and Monday, May 25, a new Memorial Day weekend record. Of those travelers, 39.1 million were expected to drive and 3.66 million to fly. The volume tells one story: demand is holding up. The cost backdrop tells another. AAA's gas-price arm said the national average for regular gasoline hit $4.56 a gallon on May 21, up 3 cents from a week earlier and $1.38 above the same point last year, the highest Memorial Day weekend level in four years.

The broader inflation picture makes this more than a one-weekend gasoline story. The U.S. Travel Association's Travel Price Index, which uses Bureau of Labor Statistics data, said travel prices in April rose 7.8% from a year earlier, more than twice the 3.8% annual increase in the overall Consumer Price Index. BLS's own vacation-price summary broke out the pain points clearly: gasoline prices were up 28.4% year over year, airline fares were up 20.7%, other lodging away from home including hotels and motels rose 4.3%, and full-service meals and snacks were up 3.8%. Even limited-service meals and snacks rose 3.2%. For households, that means cheaper substitutions still cost more than they did a year ago.

There is one important nuance in AAA's holiday booking data. The travel group said average roundtrip domestic flights booked for Memorial Day were 6% cheaper than last year, at about $800, because many travelers bought tickets before the latest fuel run-up filtered fully into airfare. That is helpful context for families who locked plans in early. It is less comforting for households still trying to book June or July trips now that jet-fuel pressure and broader travel inflation are more visible in the data. A holiday traveler who looked organized in April may simply have been lucky on timing.

Bank of America Institute's spending data suggest the adjustment is happening through trip quality and trip frequency, not through a broad collapse in demand. The bank said many households are still traveling but making tradeoffs such as taking fewer trips or cutting back on accommodations. That is a useful distinction for personal-finance readers. It means the budget pressure is more likely to show up as a shorter stay, a cheaper hotel, more meals packed from home, or a decision to drive somewhere close instead of taking a longer flight. Higher-income households appear to have more room to absorb those choices, while lower-income households are more likely to opt out entirely.

What it means for households

The practical takeaway is that summer travel now deserves the same kind of line-by-line review families usually reserve for housing, insurance or back-to-school costs. A trip that looked manageable when a household only priced the rental car or only priced the airfare can feel very different once gasoline, lodging, restaurant spending, tolls and local transport are added together. Because several of those categories are rising at once, households do not get much protection from switching just one part of the plan.

For families still planning a trip, the main decision is no longer simply whether to go. It is whether the all-in cost fits alongside June rent, credit-card bills and other summer expenses without forcing borrowing later. The current data argue for comparing a shorter trip against a cheaper destination rather than assuming one obvious budget fix will do the job. They also suggest that early-booked holiday airfare should not be mistaken for a sign that the rest of the season will stay affordable.

What to watch next

The next indicators that matter are the daily AAA gas average and the next BLS inflation readings for travel-related categories. If gasoline and airline prices stay near current year-over-year gains into June, the pressure will move beyond Memorial Day and into the core booking window for the rest of the summer. If fuel markets cool and airfare momentum softens, some households may regain room for a later trip even if this holiday weekend felt expensive.

For now, the most useful conclusion is a narrow one. Americans still want to travel, and many still will. But the verified data now support a more specific household-money warning than they did earlier in the week: summer travel is becoming more uneven, and the families with the least slack are the ones most likely to cut back first.