How Americans Are Making Summer Vacations Work Despite Record-High Costs

Summer trips this year cost more than they ever have before. New data from Squaremouth, the nation’s largest travel insurance marketplace, shows average summer trip costs climbed to $9,032, a 17% jump from last year. Rising airfares, gas prices, and lodging costs are all pushing that number higher. Yet Americans aren’t canceling their plans. Instead, they’re finding creative ways to make the math work, even as prices climb toward record territory.

More Than Half of Travelers Are Cutting Elsewhere to Fund Trips

Squaremouth surveyed more than 3,000 customers and found 54% plan to cut spending in other parts of their lives specifically to prioritize travel this year. Retail shopping and dining out topped the list of sacrifices, with 19% cutting shopping and 12% cutting restaurant meals. That pattern shows up across other research too. Priceline’s 2026 State of Summer Travel Report found more than a third of Americans have already started trimming everyday expenses just to fund a summer trip.

Some Travelers Would Rather Skip Vacation Than Book Cheap

Not everyone is willing to compromise on quality to save money. Squaremouth found 42% of Americans say they’d skip a trip entirely rather than book budget flights and lodging. That sentiment runs even stronger among younger travelers, according to NerdWallet’s 2026 Summer Travel Report. Half of Gen Z travelers said they’d rather skip a vacation altogether than settle for a bargain option, compared to just 36% of baby boomers surveyed in the same report.

Travelers Are Swapping Expensive Destinations for Closer Ones

Location choices are shifting as budgets tighten. Squaremouth’s data shows rising interest in closer-to-home destinations like Canada and the Caribbean, where shorter flights and lower accommodation costs stretch travel dollars further. That trend fits a broader pattern found by KPMG research, which found 38% of consumers are adjusting their plans toward cheaper alternatives this summer, including shortening trips altogether to make travel financially possible.

Gen Z Is Trimming Trip Length Instead of Trip Quality

Younger travelers with less disposable income are taking a different approach entirely. Gen Z travelers are cutting their trip lengths by two to five days to offset rising costs, according to Squaremouth’s data. That strategy appears to be working. Gen Z is currently the only generation that has managed to keep its overall travel spending flat year over year, even as prices climbed sharply for airfare, gas, and lodging across the industry.

Airfare and Gas Prices Are Driving Much of This Surge

Behind these rising costs sit two major culprits. According to Deloitte’s 2026 Summer Travel Survey, airline fares climbed 20.7% between April 2025 and April 2026, according to Bureau of Labor Statistics data. Gasoline prices rose even more sharply, up 28.4% over the same period. Hotel costs stayed relatively contained by comparison, rising only about 4%. Together, these increases pushed the average domestic round-trip airfare to $623 in April 2026, the highest level in years.

Global Conflict Has Pushed Fuel Costs Even Higher

Rising fuel prices trace partly back to international tensions. The ongoing conflict involving Iran has caused oil prices to spike toward near record highs since fighting began earlier this year. North American jet fuel prices nearly doubled in the weeks that followed, according to the International Air Transport Association. United Airlines CEO Scott Kirby told CBS News the airline raised fares by 15 to 20% in direct response, a shift that rippled across the broader travel industry heading into summer.

Many Americans Are Willing to Borrow Money to Travel Anyway

For some travelers, the solution to rising costs isn’t cutting back. It’s borrowing. A NerdWallet survey found 60% of Americans plan to borrow money to pay for summer travel this year. Within that group, 23% plan to use a credit card without paying it off right away, while smaller shares plan to rely on cash advances or payday loans. Squaremouth’s Chief Marketing Officer, Jackie Mondelli, summed up the mindset driving these choices directly.

Fewer Americans Are Traveling Overall, But Spending Is Rising

Not everyone is finding a way to make a trip work this year. Deloitte’s survey found only 45% of Americans plan to take a summer vacation involving paid lodging, the lowest share in six years. Yet among those who are traveling, spending is actually increasing. One in four travelers plans to significantly raise their trip budget this year, according to Deloitte, driven largely by higher airline and lodging prices rather than added luxury spending.

Travelers Aren’t Giving Up, They’re Just Getting More Strategic

“We’re seeing from our data that travelers are clearly determined to move forward with their trips this summer, even as costs continue to climb,” said Jackie Mondelli, Chief Marketing Officer at Squaremouth. “They aren’t willing to sacrifice their vacations, and they are thinking outside the box to make it work.” That determination, paired with real financial creativity, appears to be defining what summer travel looks like across the country this year.