A significant number of Americans have given up on going on vacation this summer due to the high cost of living, according to an exclusive poll for Newsweek.
Forty-four percent of respondents to a survey conducted by Redfield & Wilton Strategies on behalf of Newsweek between June 27 and 28 said they won't be traveling anywhere in the next three months, with a majority of 53 percent saying they would have gone on vacation had the cost of living been cheaper. The survey was run among 2,500 eligible U.S. voters.
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Among those who said they intend to travel abroad (17 percent), domestically (29 percent) or both (10 percent), a majority of 64 percent said their plans had been affected by the high cost of living. Fifty-five percent said that they're now traveling to a cheaper destination than they would have otherwise visited; 45 percent said they're using a cheaper way of transportation; 30 percent said they're staying in cheaper accommodation.
Gen Xers were the most likely to say they would have gone on vacation if it was cheaper (57 percent), followed by millennials (54 percent), and boomers and Gen Zers (50 percent each).
Despite negative perceptions on the state of the economy, inflation is now much lower than its June 2022 peak of 9.1 percent. As of May, the latest data available, core inflation in the U.S. had increased by 2.6 percent year-on-year, the smallest hike since March 2021. In April, it had risen by 2.8 percent year-on-year. The consumer price index increased by 3.3 percent from a year earlier and held still from April. While it has cooled down significantly, inflation remains higher than the Federal Reserve's goal of 2 percent.
"Life has gotten a lot more expensive in recent years, which is why so many people are struggling to afford vacations," Ted Rossman, senior industry analyst at Bankrate, told Newsweek.
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"For example, a collection of common household expenses costs about 20 percent more now than it did in early 2022," he said. "With so many people spending so much more for housing, food, gas and other essentials, there's less money to go around for other things such as travel.
"Higher interest rates have pinched buying power as well, especially for the roughly half of credit card holders who carry debt from month-to-month at an average rate of 20.71 percent (close to a record high set a few months ago). Credit card debt is easy to get into and hard to get out of."
The survey's findings are backed by previous studies which concluded that many Americans can't afford to go on vacation this year. A March survey by Skift, a company that analyzes global travel data, found that 19 percent of 1,001 polled Americans thought their dream trip was not affordable in the last quarter of 2024, and were reconsidering their plans. Forty-three percent said it was as financially challenging as it had been before the pandemic in 2019.
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A majority of Americans made changes to their travel plans throughout the year, according to Skift, for a total of 72 percent in the first quarter, 76 percent in the second, 66 percent in the third and 68 percent in the fourth and last.
Not everyone is willing to give up on their vacation dream just because they cannot afford it, though. An April survey by Bankrate found that only 53 percent of Americans were planning a summer vacation this year, 36 percent of which were willing to go into debt to pay for it. This includes carrying a balance on a credit card, using buy now, pay later (BNPL) services and borrowing from family and friends.
Forty-seven percent of all respondents were planning on staying put this summer, avoiding taking a vacation, with 65 percent saying they couldn't afford it. Among these, Gen Xers were more likely to cite affordability as an issue (67 percent) followed by millennials (62 percent), boomers (61 percent) and Gen Zers (53 percent).
In 2023, when inflation was higher than it is now, 58 percent of Americans who were not planning on going on a summer vacation said they couldn't afford it.
"Even though travel costs have fallen over the past year (for example, rental car prices are down 9 percent year-over-year according to the latest CPI, airline fares are down 6 percent and hotel prices are down 2 percent), this hasn't been enough to offset the higher cost of living in other areas," Rossman said.
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