Budget travelers are preserving holiday plans by trading full-price packages for surprise deals, hostels and low-cost sailings, keeping demand alive even as headline airfare and fuel costs rise.
Oklahoma City hairstylist Jami Hagerman spent about $400 on a Groupon mystery-vacation voucher that covered airfare and lodging while leaving the destination unknown. The couple wound up in New Orleans, where they visited museums, took walking tours and sampled beignets. "I feel like the value was great for the trip," Hagerman, 29, said.
The behavior shows up in payment data. PNC card records analysis found consumers with annual incomes under $36,675 spent more monthly on travel earlier this year than at any point since at least 2019, with July spending up 7% from a year earlier. Companies that target bargain seekers are responding by broadening budget inventories and marketing low-price experiences.
Groupon expanded its mystery-vacation offerings beyond an initial flagship product and recorded about 5,500 orders in the second quarter of 2026, a more than five-fold increase compared with when it sold only the flagship in the first quarter of 2025. The flagship package ranges from $199 to $299 per person, and the company markets it as a 50% discount. Most buyers land in U.S. cities such as Las Vegas, Atlanta or Orlando, though a small share have been routed to international hubs including Singapore and Paris.
Travel agents and customers say the surprise element helps justify compromises on destination choice. "Orlando probably wouldn't have been in my top 10 pick of places," Tammy Wales, a Georgia-based travel agent, said. "But, as long as I'm gone, I don't really care. The biggest thing was being able to take a trip and have the element of surprise."
Price pressures remain significant. AAA data show gas prices are pacing for a record high on Labor Day and have risen roughly 30% year over year. The Bureau of Labor Statistics reports airline fares jumped more than 25% year over year as of July. Still, parts of the market are absorbing the shock: industry tracker OAG found low-cost carriers gained market share in 2025 relative to the prepandemic period, although the collapse of Spirit Airlines in May could change that dynamic.
Accommodation and cruise operators report resilience in budget segments. Hostelworld said transactions from U.S. and Canadian customers rose 10% in the first half of 2026 versus the year-earlier period, and its net average transaction value also increased. Booking Holdings' finance chief, Ewout Steenbergen, told analysts in April that average daily rates for the company's lower-end segment were flat. Carnival Corp. said demand for the remainder of 2026 and beyond is stronger than the comparable prior-year periods, and revenue from a business segment that includes onboard spending rose more than 7% year over year in its fiscal second quarter.
"We're somewhat recession-resilient," Carnival finance chief David Bernstein said. "We do very well in good times and bad." Bernstein noted roughly half of the U.S. population lives within a five-hour drive of a Carnival cruise port, a geographic advantage many families use to avoid airfare.
Some consumers string together those advantages to cap costs. Kenny Wilson and her husband regularly drive from Texas to Galveston and use fare deals that let children sail free with paying adults to limit total cruise spending to $1,000. "In this economy for the middle class, it's very, very hard to get vacations in there," Wilson, 27, said. "I'm just so grateful that I figured out a way out that I could still give my kids a beautiful childhood and memories for cheap."
Even among nearly 1,400 "credit-challenged" consumers surveyed by Snap Finance in March, more than one in 10 reported spending at least $300 on travel or vacation costs in the prior six months, despite just over 40% of that group saying they felt financially unstable. The result is a bifurcating travel market: some companies are upgrading cabins and amenities for affluent customers, while others expand value offerings to capture price-sensitive demand.
The near-term outlook for budget travel depends on fuel and airfare trajectories and whether low-cost carriers can sustain the market-share gains seen in 2025. For now, consumers and companies seeking lower-price options are finding ways to keep vacations on the calendar.
