Skift Take

After splurging on travel this summer, Americans are starting to cut back and take more vacations closer to home.

Dawit Habtemariam

Americans aren’t going to be setting a new travel record for Labor Day weekend like they did for July 4th and Memorial Day, according to an analysis of booking data released Monday by AAA.

“I don’t think it’s going to be a record,” said Paula Twidale, senior vice president of AAA Travel.

Twidale said Americans are cutting back on trips abroad this year. International travel bookings are down 4% from last year for Thursday, August 29 through Monday, September 2.

Inflation is a big reason for the decline: The cost of international travel, including airfares and hotel stays, is up 11%, according to AAA. Higher costs more generally, including for groceries, are also straining budgets, even as the pace of inflation slows.

“Inflation is up so discretionary income is a little constrained,” said Twidale.

To save money, Americans have opted to travel within the U.S. Domestic travel for Labor Day weekend is up 9% over last year. Costs for trips within the U.S. have increased only 2%.

In recent weeks, gas prices have remained steady at around $3.50 on average, down from $3.81 for last year’s holiday, according to AAA.

According to the State of Travel 2024 report from Skift Research, as of May, tourism experts ranked high costs and the economic environment as the top factors weighing down an international tourism recovery.

Americans Book More Labor Day Cruises

There’s been a surge in domestic cruises for Labor Day weekend. Domestic cruise bookings for Labor Day weekend are up 18% from last year, with Alaska the top destination, according to AAA.

Twidale attributed the boom in cruises to American families trying to save money on hotels and transportation while also enjoying many destinations in one short trip. “It is another way to economically spend their amount of money and see a lot of cities and have everything done for you,” she said

Cruise executives have noted the been strong demand from North America this year. “Their willingness to pay more for these incredible vacation experiences continues to increase, so our pricing continues to increase into 2025 and into 2026,” said Royal Caribbean CEO and President Jason Liberty on a conference call discussing second-quarter results.