How tightening budgets, recession fears are impacting travel decisions

When economic rough patches arise, what's the first thing to get cut in your household budget? Are there certain items that are sacred and remain in place no matter what?

With the cost of living in this country skyrocketing over the past year amid the Trump Administration's new tariff policies and related worries about a recession, travel budgets may be on the chopping block in some households.

A new study conducted by MDRT, an association of financial professionals, found that 55 percent of Americans will "eliminate their travel and leisure budgets in the case of a recession."

A closer look at that development reveals that 15 percent of Gen Z, 29 percent of Millennials, and 25 percent of Baby Boomers expressed the need to ax their travel budgets should a recession take place.

The same study found that a whopping 80 percent of consumers are at least slightly concerned about a recession.

That's not good news for the travel industry.

But travel experts interviewed by TravelPulse indicate that the situation developing across America is very nuanced and reflects the increasing wealth divide in this country. High-net-worth individuals are traveling as usual, while middle-income families, who are among the hardest hit by new tariff policies and price hikes, are busy adjusting travel plans so they can still afford a vacation.

Here's a closer look at what travel industry experts are witnessing from clients amid recession fears, including the many types of changes travelers are making in order to maintain their vacation plans.

Optimizing for affordability

As a travel expert specializing in outdoor travel, Jen Young has a front-row seat to how Americans are responding to growing money worries.

Young is the co-founder and CMO of the RV rental marketplace Outdoorsy, and she says Americans are not necessarily canceling travel plans or staying home. Rather, they're fine-tuning travel details with a heightened focus on cutting costs wherever possible.

"They are pivoting away from the 'travel tax' of expensive flights, surging hotel costs (inflated by events like the World Cup) and eating out expenses," says Young. Instead, Americans are shifting toward high-value experiences that give them more financial control, adds Young. In Outdoorsy's case, that shift has already translated into a 15 percent year-over-year increase in summer RV rentals.

A growing number of families are turning to RV vacations as a travel hack that Young dubs the "kitchen-on-wheels" strategy. "Dining out has officially become the number one 'hidden' travel expense for travelers," Young continues. "As a result, Outdoorsy is seeing a surge in RV interest specifically because it allows families to 'bring the grocery store with them.' By avoiding $15 airport sandwiches and $200 family dinners, travelers are cutting total trip costs by up to 60 percent compared to traditional air and hotel travel."

Reframing vacations

Paul Whitten, founder of Nashville Adventures, a company that provides history and outdoor tours across middle Tennessee, says the growing chatter about Americans' money concerns is hardly overblown. In conversations he's had with people throughout the Nashville area, the worries are ever-present.

"Inflation is real. Groceries are real," says Whitten. But here's the caveat Whitten quickly adds: Burnout among Americans is also real. So, instead of canceling travel altogether, many are "reframing it," suggests Whitten.

"They're asking, 'What's the smartest way to do this?'" Whitten explains.

"People don't stop traveling per se, they just travel different," Whitten continues. "For a family of four, Disney World might be a no-go, but that state park that's just two hours away looks pretty good."

Americans seeking to preserve the mental wellness that travel provides are doing so by booking closer to home, shortening trips, and choosing experiences that cost less and provide a better experience, explains Whitten.

LaDell Carter, founder and lead luxury lifestyle travel designer at Royal Expression Travels, offers a similar assessment of the unfolding reality. She says middle-class and first-time travelers are likely to make some adjustments during times of recession, including increasingly:

• Exploring local options for travel within their own states (Translation: staycation)

• Shortening the length of vacations (typically from 10 days to 4 or 5)

• Choosing larger, more affordable resort properties (instead of boutique hotels)

• Looking for all-inclusive packages so that their costs are controlled

"I believe that budget sensitive travelers are expressing concern about value, timing, and flexibility," says Carter. "I'm finding that these travelers are thinking through their decisions and evaluating destinations more critically…I believe they're looking for the best deals during off peak periods."

A tale of two Americas

In the luxury travel segment, there's generally no reduction in travel during economic downturns, Carter explains. Ultra-high-net-worth individuals don't cancel their travel plans when economic conditions decline. Rather, travel for this particular demographic is viewed as "a base lifestyle expense."

"It's an integral component of their routine, just like real estate or education," adds Carter.

Additionally, if ultra-high-net-worth travelers are making adjustments to their travel plans, it's not about cost-cutting. Instead, it's typically related to convenience and efficiency.

"For instance, they may choose an all-inclusive package not because they need to get a better price, but because they dislike reconciling multiple invoices after their trip," says Carter. "An all-inclusive package reduces the number of invoices that they must reconcile and provides greater simplicity in terms of managing their expenses."

Tips for cutting travel costs

If you're among the Americans feeling the economic pinch right now, you're not alone.

As ABC News reported this week, President Donald Trump's tariffs cost the average American household $1,000 last year, according to new research from the nonpartisan Tax Foundation. And that cost is expected to soar to $1,300 per household this year.

So, what should you do if you want to maintain your travel plans? Shortening the duration of a vacation may seem like a logical choice. But Carter says taking this step does not necessarily deliver much cost savings.

"In fact, shorter trips often carry a higher nightly rate per night, and airfare costs are still fixed," Carter explains. "Additionally, shortening a vacation means losing the ability to utilize the long-term reset benefits of extended time away."

Instead, Carter suggests the smartest way to cut vacation costs is often to switch to a destination with lower demand-driven pricing. For example, rather than planning to visit Italy during peak season, consider visiting Portugal during shoulder season (the time period between peak travel seasons).

Alternatively, rather than visiting a hot spot like Rome or Venice, opt for lesser-known regions that are likely to be less crowded, while still offering similar opportunities. When it comes to Italy, there are numerous locales that fit this bill, particularly throughout the regions of Puglia, Calabria, and Liguria.

Christine Phillips, founder of the bespoke travel planning agency BonVoyage Christine, is giving her clients similar guidance.

"In many cases, I'm advising clients to rethink timing and destination rather than eliminate the trip altogether," she says. "That might mean skipping the most popular, high-demand cities and looking at destinations that offer a similar aesthetic or cultural experience without peak pricing."

On this front, Phillips says instead of automatically booking Greece in high season, consider Bodrum, Turkey or another coastal destination that delivers similar Riviera energy with better overall value. "I'm also encouraging shoulder-season travel whenever possible," adds Phillips. "Not only does it reduce cost, but it often improves the experience - fewer crowds, better service, and more availability. Clients are increasingly open to that shift."

Travel desire and demand is here to stay

One last note on the topic. Yes,the economic pressures and fears that have emerged for Americans during the past 14 months are very real. Day after day, new layoffs are announced across all industries, and making ends meet amid the rising cost of living is being felt coast to coast. Those are realities for scores of Americans.

But in more than a few cases, Americans are also digging in and not giving up on travel, say experts. With everything going on in the world these days, travel is widely viewed as essential to wellbeing.

"Travelers will tend to trim other discretionary expenses such as dining out, entertainment, and retail to preserve trips they've prioritized for wellbeing and connection," says Dulani Porter, executive vice president and partner with SPARK, a marketing and advertising agency that works with travel and hospitality brands.

The widely cited "55 percent" statistic reflects anxiety and intent under economic pressure, but wider industry data and on-the-ground observations across the travel and hospitality industries suggest resilience, continues Porter. "Americans are planning smarter, shopping harder for value, and redefining what travel looks like in tighter economic times, rather than abandoning it altogether," she says.

As for Carter, of Royal Expressions Travel, she says the reality is that recessions do not eliminate travel, they change it.

"Some travelers will shift their focus toward domestic travel, others will travel during less busy times. Still, others will continue to travel without interruption," says Carter. "Ultimately, the resilience of the industry exists because the reasons for travel have evolved to include aspects of wellbeing, connection, and professional sustainability."

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This story was originally published March 9, 2026 at 3:04 AM.