Summer Travel: How the Economy is Shaping Budget Trips in 2025

Consumer confidence has declined since the start of 2025. A perception that depicts the financial health of an average American. This is a result of the impact of the tariff threats and other actions introduced by the current U.S. administration, which has caused global uncertainties and economic challenges.

Given the circumstances, rather than seeing more people forfeit their summer vacation plans, we continue to see high travel demand as summer approaches, albeit with a slight adjustment to shorter but more regular getaways and economical lodging. We examine reputable reports to understand how shifting economic conditions affect travel this summer.

Value Over Experience

Travelers anticipate sticking to their summer plans—a steady review compared to 2024, per Deloitte’s 2025 Right-Sized American Summer Survey. Many still prioritize at least one trip, but do so differently by cutting expenses through frequent, smaller trips. This transition reflects a more deliberate approach to travel, striking a balance between value and a worthwhile experience, as people seek opportunities to explore new locations, enjoy the outdoors, and spend time with family.

Out of 53%, about half of Americans plan to take a vacation and stay in paid accommodations this summer, compared to 48% in 2024. 43% anticipate taking shorter trips. 33% are scheduled to lodge in low-cost hotels, and 30% stay with friends and family. All of this is according to a poll conducted in April of this year.

Destination Choice

This summer, price would significantly influence destination preferences due to rising expenses. One that will favor only the middle-class and upper-class individuals and force the lower-income earners to stay local (New York and Los Angeles as preferred per Skyscanner’s Smarter Summer, and Kayak’s Summer Travel Check-in Report. Aside from price, escalating geopolitical tensions are also forcing some to opt for local travel due to the uncertainty associated with traveling abroad, with many opting to drive instead of fly to save costs.

71% of survey respondents said they would take road trips, a rise from 66% in 2024 and 64% in March 2025. More Americans (80%) wish to stay at least once in hotels during the summer vs. 73% in 2024, and 25% stay in rentals this year vs. 22% the previous year. Europe and Asia remain the top destinations for foreign travelers, among whom those intending to take their longest flight abroad are most prevalent.

The likelihood of laptop users taking longer excursions is 39% compared to 31% in 2024, traveling to more distant overseas locations is 20% compared to 14% last year, and staying in private rentals is 20% compared to 15% the previous year. Europe and Asia are popular choices for those seeking to visit a foreign destination. Only 42% of them intend to take their longest flight abroad. This year, Asia’s trend remains at par (14%) with the previous year, while Europe travel is down by 44%. Cost remains the most significant barrier for those who stated they wouldn’t travel this year.

Budget Allocation on Spending for Your Next Vacation

Americans’ summer vacation destination budgets are barely increasing on average of $3,471 as of April 2025 for their most extended trip, compared to what was earlier projected to hit about $4,000 in March. This pulls back the initial 21% increase in travelers’ intended spending over last summer. Travelers are increasingly choosing shorter, but regular visits over one long trip, a preference that increased from 18% in March to 28% in April this year.

Those who spend more on their most extended trip are shown at 19% as of April, compared to 23% in March do so because the trip feels more special. In the April study, 49% of respondents classified the increased spending as wish-list vacations, compared to 41% in March. In fact, approximately 23%, travelers from that list has risen slightly from 21% in 2024.

Conclusion

Although the commitment to summer vacation remains strong, priorities are shifting with an emphasis on cost-consciousness, increased road traveling, and variable lodging preferences. The travel business is becoming increasingly influenced by variables such as inflation, growing expenses, and international tensions that affect how and where people choose to visit and how they get there. Many now believe they would travel more cautiously if the world situation worsened. This is an opportunity for providers to be nimble in meeting travelers’ needs by staying flexible, offering options, and, most importantly, reminding tourists of the purpose of their summer vacations.