Consumers’ desire to travel despite economic uncertainty and rising costs has carried over from the summer months and into the 2026 holiday season.
Americans still plan to hit the road (or sky) during the period spanning Thanksgiving and New Year’s, though cost-conscious travelers will look for trade-offs to make trips feasible, experts shared. Meanwhile, artificial intelligence is shifting how travelers shop for transportation and lodging. In many cases, traveler decision-making will vary across income brackets and generations.
Ahead of Thanksgiving — often marked as the kickoff to the holiday season in the U.S. — Hotel Dive analyzed several seasonal travel outlooks and spoke with industry experts to determine what trends will impact the hospitality industry this holiday season.
Travel sentiment is strong, but cost concerns linger
This year, the holiday season will remain a peak travel time, AAA Global Travel Agent Jodi Abata told Hotel Dive. Last year, a record 81.8 million Americans were predicted to travel for Thanksgiving alone, per AAA. With sentiment strong this year, that number could rise.
While AAA’s official travel projections are not yet published for the 2026 holiday season, Abata said Americans are determined to make trips happen in spite of rising costs, and they will withstand price increases to do so.
“I wouldn't say [travelers] are looking to spend more, but they are going to be spending more,” she said.
Flight and hotel costs will likely be elevated this season. In September, online travel agency Hopper reported that round-trip domestic airfare for Thanksgiving was averaging $402, up 31% year over year. Meanwhile, for Christmas, round-trip domestic flights were averaging $452, up 23% compared to last year.
Hotel rates for Thanksgiving (averaging $170 per night) were in line with 2025, per Hopper. However, rates were up 18% year over year for Christmas, averaging $197 per night.
Late last month, online travel agency Priceline shared with Hotel Dive that average domestic round-trip airfare on its site was up 20% year over year for Thanksgiving, 6% for Christmas and 20% for New Year’s.
Despite those higher prices, searches for domestic flights for all three holidays on Priceline are up compared to last year.
“Travelers across the board are paying close attention to value and how they can make their holiday budgets go further.”
Christina Bennett
Consumer travel trends expert at Priceline
PwC found that consumers’ plans to travel over the holidays remained relatively steady, with 40% planning to do so, compared to 44% in 2025, and 17% remaining undecided, as of September, per the company’s 2026 holiday outlook.
While the appetite to travel is there, the budget to do it the way people used to isn’t, driven in part by elevated fuel prices, according to the outlook.
Jonathan Kletzel, sales, service and marketing practice leader at PwC, said there is “still a deep desire to travel and protect the time [people] spend visiting friends or family,” but as costs rise, many travelers will make trade-offs this holiday season to make trips feasible.
Some travelers make trade-offs, others trade up
To save on costs, PwC found that one-third of consumers with travel plans this holiday season are skipping the plane ticket, 38% are trading down to budget or mid-range hotels and 35% plan to stay with friends or family rather than pay for lodging.
Christina Bennett, consumer travel trends expert at Priceline, said the travel trade-off trend is expected to carry into 2027, with 62% of respondents to Priceline’s 2027 Travel Trends Report saying they will cut back on or downgrade one part of a trip next year to upgrade another part.
“Travelers might take a less expensive flight to stay at a nicer hotel or save elsewhere so they can splurge on a great meal,” Bennett told Hotel Dive. “Travelers across the board are paying close attention to value and how they can make their holiday budgets go further.”
When it comes to overall travel sentiment this holiday season, Priceline has not seen a clear divide by generation or income bracket, Bennett said.
However, according to PwC’s outlook, millennials will be particularly impacted by higher prices this season, with the cohort expected to pull back the most compared to other generations and cut travel budgets by 37% year over year.
Now in their “parenting and mortgage-paying prime,” millennials are choosing to spend their money more carefully, per PwC.
While this has historically been the case for the generation in their shoes, “everything is more expensive” today, meaning millennials “have less discretionary income at those life stages than [generations past] would have had because they’re spending more on non-discretionary things like food, shelter and clothing,” Kletzel said.
Beyond generation, travel trade-offs are more widely being made on the middle- to lower-end of the market, Kletzel said. On the higher end, travelers “seem to be insulated from the economic shocks, and we’re not seeing a big dip in demand or in price sensitivity there,” he added.
Similarly, Braden Mark, U.S. principal for travel, leisure and hospitality at KPMG, said higher-income travelers are not trading down this holiday season, noting the K-shaped economy “is a very real part of the story” in 2026.
An October consumer pulse survey from KPMG found that while consumers are worried about inflation, they plan to spend more on travel this holiday season compared to last year, as they prioritize experiences over goods.
In fact, many consumers are “choosing longer vacations and premium accommodations that feel special and memorable,” Mark said.
Citing KPMG research, he shared that 31% of travelers plan to be away for more than five days this holiday period, up from 25% last year. And 34% of travelers plan to book luxury hotels or resorts, compared to 28% last year, “so there’s definitely an increase in willingness to trade up,” Mark said.
For longer-duration trips spanning a week or more, travelers will opt for a hotel this holiday season, AAA’s Abata noted.
AI plays a role in travel shopping
Artificial intelligence will play a greater role in trip planning and shopping this holiday season, particularly for cost-conscious travelers, experts shared.
According to PwC, 60% of consumers who plan to travel say they’ll use AI somewhere in the booking journey, including to research or compare hotel and flight prices (41%), get recommendations (32%) or build an itinerary (22%).
Priceline’s Bennett said that “AI is becoming another tool travelers can use to make holiday planning easier, especially when they’re balancing dates, budgets and different preferences.”
As they embrace technology, an interesting trend is emerging, according to PwC’s Kletzel: Travelers are booking fully refundable vacations early, then shopping around to find a better deal, with AI making this “increasingly easier.”
KPMG, however, has not observed a drastic change in cancellation rates this holiday season, Mark said, signaling that travelers are holding onto their original bookings.
Meanwhile, Abata said that travelers are using supplier apps to ease their journeys, but since comfortability with AI isn’t fully there yet, the tech “hasn't been integral to planning trips.”
Beyond the travel planning process, personal, human-led service will remain essential to providing a top-notch guest experience at hotels, Bennett said. Priceline research found that two-thirds of Americans say exceptional attention makes a hotel stay memorable, and more than a third have returned to a hotel because of a memorable interaction with a staff member.
“Especially during the holidays, those personal touches can go a long way in shaping how travelers feel about their stay — and whether they want to come back,” Bennett said.
