AFFORDABLE VACATIONS AMID TARIFF AND ECONOMIC UNSURITY
U.S. Travelers Enjoy Summer Getaways, Yet Economic Concerns over Tariffs Spur Budget-Conscious Decisions
People are still eager to go on summer vacations this year, even if they need to cut costs due to possible tariff-related inflation.
Travel rates keep reaching historic highs following the relaxation of COVID-19 pandemic restrictions. Indeed, travel has surged by 19% since 2022, and around half of consumers consider it more essential now than it was five years ago, according to a survey by Expedia Group.1
However, President Donald Trump's fluctuating tariffs have sparked concern among many consumers, as they ponder their potential impact on the economy. Still, 88% of consumers are determined to take a vacation, with Expedia being the findings.
PRIORITIZING COST-EFFICIENT TRAVEL
While people are willing to invest in a summer getaway, nearly six in ten consumers anticipate being more focused on costs this year during their travels, according to Expedia Group.
A March Deloitte survey revealed that travelers intended to spend 21% more on travel this summer compared to last year. However, this figure dwindled to 13% when consumers were polled in April, the month when Trump imposed widespread tariffs.2
"Travelers seem keen to embark on their summer trips, but pricing pressures and economic factors are expected to dictate the means by which they travel," said Kate Ferrara, vice chair and U.S. transportation, hospitality, and services sector leader for Deloitte, in a press release. "By opting for road trips over flights or planning shorter, budget-conscious journeys, travelers are likely seeking value while creating Memorial moments."
To achieve cost-effective holidays, more travelers are favoring shorter, more frequent vacations over one extended trip. In addition, 33% plan to stay at budget hotels, 30% will stay with family and friends, 20% will opt for cheaper flights, and 22% will drive instead of fly, according to Deloitte.
Many are also combining work trips with leisure for a less expensive "bleisure" or "flexcation" trip, as Expedia Group suggests. Almost a quarter of travelers plan on working remotely while on vacation this year. This compromise allows increasingly more travelers the opportunity to take longer trips to international destinations, according to Deloitte.
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Insights:- Tariffs could lead to economic uncertainty, potentially causing consumers to be more cautious with their spending, including travel.- Tariffs might result in higher prices for imported goods and travel-related services, making travel more expensive.- Tariffs can disrupt supply chains, potentially affecting travel by altering the availability or cost of travel-related products and services.- To combat economic pressures and increased costs, consumers might opt for budget-friendly travel options, flexible travel planning, and domestic travel.
- Despite the potential increase in travel costs due to tariffs, many consumers are planning cost-efficient vacations, favoring budget hotels, shorter trips, and driving instead of flying.
- As economic uncertainty looms with tariffs, personal-finance advice may become increasingly important for travelers seeking to maximize their retirement income and make informed decisions about their travel expenses.
- In an effort to manage costs effectively, some travelers are choosing to combine work trips with leisure, taking advantage of "bleisure" or "flexcation" trips, which could provide opportunities for longer, less expensive international travels.
