Holiday travel is usually one of the biggest line items in a household’s seasonal spending, so a drop in travel budgets touches families, airlines, hotels and the towns that depend on visitors. This year’s early signals point to a more frugal season, with many people still going somewhere but spending far less to get there.
In this article we will explore what a recent PwC survey found, why budgets are shrinking, which travelers are cutting what, and how to plan a trip that keeps the people and skips the premium.
The Numbers Behind the Smaller Travel Budget
PwC’s Holiday Outlook 2026 surveyed 4,093 US consumers in mid-June, and the travel results were reported by Travel Agent Central. The headline is that expected holiday travel spending averages $419 per consumer, down 24 percent from $553 a year earlier. That is a steep fall for a single year, and it is larger than the drop in most other categories the survey tracked.
The share of people planning to travel between 1 November and 31 December also slipped, to 40 percent from 44 percent last year. A further 17 percent said they had not decided, which matters because undecided travelers tend to wait for fares and hotel rates before committing. If prices ease, some of that group will go. If they do not, many will stay home or drive to a relative’s house instead.
Gift budgets tell a different story. The survey put the average at $708, down only 2 percent, so shoppers are protecting the presents while squeezing the journey. PwC summed up the pattern as “a value problem rather than a demand problem,” and that framing is useful. People still want to see family and mark the holidays, but they are no longer willing to pay whatever the market asks.
Context helps with interpretation. A year ago the same survey recorded a higher figure and a higher share of travelers, so this is a change in direction, not a long-run level. Travel spending is also lumpy, since a single airfare or hotel booking can be a large share of a household’s holiday budget, which is why modest shifts in behavior can produce a large drop in the average.
Reading the Survey with Care
Two cautions apply. The survey was fielded in June, months before anyone books a Thanksgiving or Christmas trip, and plans made in early summer can change by autumn. It also covers US consumers only, so readers in other countries should treat it as a signal about one large market rather than a global rule. In many countries the holiday calendar differs, and travel costs are shaped by different fuel taxes, rail networks and school schedules.
Averages also hide a lot. A figure of $419 blends people who plan to spend nothing with people planning a long-haul trip, so very few households will match it exactly. Use it as a barometer of mood, not a budget target.
What It Means for Airlines, Hotels and Destinations
Businesses that sell travel read numbers like these closely, though one survey is only one input. A shift from flying to driving matters most to airlines on short and medium routes, where a car is a realistic substitute. It matters less on long-haul routes, where there is no practical alternative to a plane.
Hotels face a different adjustment. If guests trade down from four-star to midrange, or skip the room entirely to stay with relatives, higher-end properties may see softer demand in leisure markets, while midrange chains may hold up better. Restaurants, attractions and small shops in destination towns feel it indirectly, because visitors who sleep at a relative’s house spend less on the road.
For travelers, the practical consequence is that competition for price-sensitive customers can make deals more common. That is a possibility rather than a forecast, so keep an eye on fares and rates instead of waiting for a discount that may not come.
Skipping Flights While Keeping the Trip
The most striking finding on cost-cutting is that a third of travelers who have plans say they will skip airfare. That does not mean a third of them are staying home. It means they are finding another way to reach the destination, which usually means the car, and in some regions a train or a coach.
Airfare is typically the least flexible cost in a holiday trip. Prices rise as the dates approach, peak days sell out, and baggage and seat fees stack on top of the base fare. A car, by contrast, turns the trip into a cost you partly already carry, since the vehicle is paid for, insured and registered whether or not it leaves the driveway.
When Driving Wins
Driving tends to beat flying when a family of three or more travels together, when the distance is under roughly a day’s drive, and when the trip involves a lot of luggage or gifts. Here is a simple illustration with invented round numbers. Suppose four people face a flight costing $300 each, which is $1,200 before bags, plus airport transport at both ends. If the same trip costs $250 in fuel and $100 in food and tolls by car, the gap is large enough to pay for a hotel night on the way and still come out ahead.
The comparison reverses for solo travelers and couples on long routes. One person driving a very long distance may spend nearly as much on fuel, food and a motel as a discounted ticket would cost, and they lose a day or two on each leg.
The Hidden Costs of a Long Drive
Fuel is only part of a road trip’s cost. Tolls, parking, meals, a possible overnight stop, and extra wear on tires and brakes all belong in the comparison. A common mistake is to compare the full airfare with fuel alone, which flatters the car. A fair calculation adds everything, then asks whether the difference is worth the extra hours behind the wheel.
Safety and timing matter too. Holiday travel days bring heavy traffic and, in many regions, winter weather. Leaving earlier in the day, avoiding the busiest departure hours and keeping a few days of flexibility can lower both stress and risk. Drivers should also have their vehicle checked before a long trip, which is a modest cost compared with a breakdown far from home.
Before choosing, write down the full cost of each option on one page, including time. Putting a modest value on hours spent driving often clarifies whether a flight is worth the premium. Many people discover the car wins only when they count the trip as part of the holiday rather than as lost time.
When Flying Still Makes Sense
Flying remains the better choice when time off work is short, when the route crosses a large part of a continent, or when winter weather makes a long drive risky. It also helps to remember that cheaper flying is possible. Traveling on the quietest days around a holiday, using nearby secondary airports, and booking one-way legs on different carriers can all lower the bill, though each has trade-offs in convenience.
Use of Rewards and Points
Travelers with loyalty points or credit card rewards may find that the cheapest airfare is the one they have already paid for. Points programs change their rules often, so check current terms with the program before planning around them. A small tip is to look at the fare in points and in cash side by side, since some redemptions are poor value.
Trains, Coaches and Shared Rides
Intercity trains and coaches are the middle path. They cost more than a full car but often less than a plane, and they remove the stress of holiday traffic. Their weak point is availability, since popular holiday departures can sell out early. Where they exist, booking as soon as dates are fixed is the main lever readers control.
Flexible Dates as a Budget Tool
Of all the ways to cut costs, shifting the dates is often the cheapest. Holiday demand clusters on a few peak days, and fares and room rates track that clustering. Leaving a day early or returning a day late may trim the cost of both transport and lodging, and employers sometimes allow remote work or time off around the holiday to make this possible. Readers with fixed dates, such as parents tied to school calendars, have less room to maneuver, which is one reason families are the hardest hit by high peak pricing.
Hotels Trade Down and Relatives Fill the Gap
The survey’s lodging results point the same direction. Among travelers with plans, 38 percent said they are booking budget or midrange hotels, and 35 percent plan to stay with friends or family. Even affluent travelers are showing restraint: PwC noted that travelers favor midrange over four-star hotels, and half of households earning $150,000 or more still plan to travel, which means the trade-down is not only a story about lower earners.
A table helps show how the main cost-cutting moves compare.
| Cost-cutting move | Share of travelers with plans | What it saves | Main drawback |
| Skipping airfare | One third | The largest single cost for many trips | More travel time, fuel and wear on the car |
| Budget or midrange hotels | 38 percent | Nightly rate, often meals and parking too | Fewer amenities and less flexibility |
| Staying with friends or family | 35 percent | Nearly all lodging cost | Less privacy, shared routines |
Booking details matter here. Rates that can be canceled for free let travelers lock in a room and keep looking, and some travelers rebook if the price falls. Read the fee terms, since taxes, parking and resort charges may not appear in the first number shown.
Why Midrange Is the Sweet Spot
A midrange hotel usually gives travelers a clean room, a predictable bed and a location near the family home, which is the actual purpose of most holiday trips. The step up to a four-star property buys things like a lobby bar, a larger lobby and a better gym, none of which matter to someone who spends the day at a relative’s table. Cutting that premium is one of the easiest savings to make because it costs little in real comfort.
The Family Couch Economy
Staying with relatives is the oldest budget hotel there is, and 35 percent of travelers with plans say they will use it. It saves the nightly rate and often the cost of at least some meals. It also changes the nature of the trip, because the hosts take on cooking, cleaning and scheduling. That is why etiquette, covered below, matters as much as the savings.
Generations Split on How Much to Cut
PwC broke the travel budget down by generation, and the contrast is sharp. Millennials plan to spend $510, down 37 percent. Gen Z plans $358, down 29 percent. Gen X plans $447, down 18 percent. Baby boomers plan $361, up 1 percent, the only group in the survey whose spending is rising.
Millennials Carry the Biggest Pullback
Millennials still plan the highest spending of any group, but they also show the steepest decline. That fits a stage of life when many are raising children, paying a mortgage or rent, and managing childcare costs. Family travel for a household with young children is expensive by default, because every seat costs money and there is little room to save by traveling light.
Gen Z and Gen X
Gen Z is at an earlier career stage, with lower incomes on average, and its $358 budget reflects that. Gen X sits in between, with a smaller cut. Many people in this group are balancing the needs of children and aging parents, which can make visits to family a fixed commitment rather than a discretionary trip.
Boomers Hold Steady
Baby boomers are the exception. Many have more flexible schedules, fewer dependents and accumulated savings or retirement income, and that likely explains the flat-to-slightly-higher number. The survey does not explain the reason, so this is an inference, but it matches the broader pattern that older households are less exposed to the pressure on everyday budgets.
Gas Prices and Thin Savings Explain the Squeeze
PwC pointed to two pressures behind the pullback. The first is fuel: gas prices spiked around the time the survey was fielded. That is awkward for the very households switching from flying to driving, because their cheaper option depends on a price that moved against them. It is worth remembering that fuel prices fluctuate quickly, so readers should check current pump prices rather than assume June’s levels still apply.
The second is the household savings cushion. The report cited Bureau of Economic Analysis data showing the personal saving rate falling from 4.5 percent in January to 2.7 percent in June. A saving rate is the share of after-tax income that households set aside rather than spend. When it drops like that, families have less slack for discretionary spending, and travel is one of the first things that can be trimmed without a direct hit to essentials such as rent or groceries.
What This Means in Practice
For a household, a lower saving rate generally means a smaller buffer against surprises. Many people respond by pushing the largest discretionary expenses closer to a defined limit and choosing options they can reverse if circumstances change. That helps explain the interest in refundable bookings and in lodging that does not require a deposit.
Choosing Options That Can Be Reversed
A budget that is tight to begin with leaves little room for error, so reversible choices are worth more than usual. Refundable fares, hotel rates with free cancellation, and tickets that allow a change for a small fee all protect a household from a sudden shift in plans or prices. They often cost slightly more upfront, so the question is whether that premium is smaller than the loss from a trip that falls through. For most people with uncertain plans, it is.
AI Tools Enter the Booking Process
The survey also asked about artificial intelligence. According to PwC, 60 percent of holiday travelers plan to use AI at some point in booking, up from 57 percent last year. The uses break down into comparing hotel and flight prices at 41 percent, getting recommendations at 32 percent and building itineraries at 22 percent.
Price comparison is the most common use because it fits the mood of the season. Travelers want proof that they are not overpaying, and an assistant can scan options faster than a person clicking through ten tabs. Recommendations and itineraries are the next step, helping with questions like where to eat near a relative’s town or how to fill a free afternoon.
Privacy is worth a thought as well. Booking assistants may ask for names, dates and preferences, and travelers should avoid sharing passport numbers or payment details in a chat unless they trust the service and know how its data is handled. When in doubt, enter sensitive details only on the official checkout page.
Using Assistants Sensibly
AI tools are helpful for narrowing options but they can be wrong about prices, schedules and opening hours, especially when data is stale. The safest habit is to treat an assistant’s output as a shortlist and to confirm the final fare, cancellation terms and total price on the airline or hotel’s own booking page. Check what is included, since baggage fees and resort charges can change the real cost.
The Pull of the All-in-One Price
Part of the appeal of comparison tools is that holiday pricing is confusing. A flight may look cheap until bags, seat selection and airport transfers are added, and a hotel may look reasonable until a resort or parking fee appears. People want a single comparable number, and tools that promise one are popular for that reason. The caution is that no tool sees every fee, so the final total on the provider’s page is the one that counts.
Staying with Family Without Straining the Relationship
Because more people are planning to stay with relatives, a few practical habits are worth stating plainly. The goal is to keep the savings without spending them on tension.
Agree on Dates and Expectations Early
Tell hosts exactly when you will arrive and leave, and ask what sleeping arrangement is realistic. A clear end date prevents the awkward guess about how long a visit is meant to last. If children or pets are coming, say so up front.
Contribute in Ways That Cost the Host Less Effort
Offer to buy groceries, cook a meal or two, and clean up afterward. A small gift or a contribution toward utilities can recognize that extra guests raise costs. The saving from skipping a hotel is large enough that sharing a little of it is fair and often appreciated.
Children and pets deserve special mention. Hosts may be happy to see young relatives but unprepared for noise, bedtimes or allergies, so settle those details ahead of time. A short list of house rules from the host, even an informal one, spares everyone an awkward correction on the second night.
Keep a Fallback
Not every house is suited to extra guests, and a three-night stay is easier than a seven-night one. Some travelers book a refundable hotel for one or two nights as a safety valve, which preserves privacy without paying for a full stay.
Money Talk in the Family
Another reason this topic matters is that tight budgets can be awkward to discuss. Some relatives will quietly pay for a trip they cannot afford rather than admit the strain, and others will decline a visit without saying why. A short, honest conversation about what each household can manage often leads to better arrangements than silence, such as splitting hosting between two homes or choosing a middle location that is easier for everyone to reach.
A Sensible Order of Choices
Planning around a smaller budget is easier if the decisions are made in a deliberate order, because the first choice shapes the rest.
First, settle the dates, and where possible choose off-peak days. Moving a departure by a day can change the price of both flights and rooms more than any other tactic. Second, decide how you will get there by pricing the car and the plane honestly, including fuel, bags, parking and airport transport, using realistic numbers instead of the cheapest advertised fare.
Third, decide where you will sleep. If staying with family is workable, agree it early. If not, a midrange hotel near the family home usually does the job. Fourth, use AI or comparison tools for the shortlist, then book through the provider with clear cancellation terms.
Finally, consider travel insurance in general terms. Policies differ by country and provider, and many exclude certain causes of cancellation, so read what is covered before paying. For a trip with nonrefundable parts, it may be worth comparing cover against simply booking refundable options. Because the survey was fielded in June, it also makes sense to check the latest prices before locking in a plan.
Final Thoughts: What the Survey Cannot Tell You
The survey measures intentions in one month, and a lot happens between June and December. Fuel prices, job news and fares can all move, and a plan that looked sensible in summer may need adjusting. The figures also describe the average consumer, not any specific household, and readers outside the United States will face different costs and rules.
The right use of the data is as context: a reminder that many households are trimming, and that careful trimming is common sense rather than a sacrifice.
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Frequently Asked Questions
How much are Americans expected to spend on holiday travel this year?
According to PwC’s survey, the average is $419 per consumer, down 24 percent from $553 a year earlier. The survey was fielded in mid-June, so actual spending may differ.
Are fewer people traveling for the holidays?
PwC found that 40 percent plan to travel between 1 November and 31 December, compared with 44 percent last year. Another 17 percent were undecided at the time of the survey.
Is it cheaper to drive than fly for the holidays?
It depends on group size and distance. For a family of three or more on a trip of a day’s drive or less, the car is often cheaper, while solo travelers on long routes may find a flight competitive.
Which generation is cutting travel spending the most?
Millennials show the steepest drop in the survey, down 37 percent to $510. Baby boomers are the only group planning to spend more, up 1 percent to $361.
How common is it to stay with family instead of a hotel?
In the survey, 35 percent of travelers with plans said they would stay with friends or family, and 38 percent said they would book budget or midrange hotels.
Do travelers use AI to book holiday trips?
PwC reported that 60 percent of holiday travelers plan to use AI at some point, mostly to compare prices. It is wise to confirm final prices and terms directly with the provider.