Key takeaways:

• A staycation summer: A vast majority (88%) of Americans* say inflation has taken a bite out of their summer plans, with 20% saying they can’t afford to go on vacation (women 24%, men 15%). Nearly half (41%) say they won’t travel at all this summer. 
• A “soul-searching” splurge: Unlike their older counterparts, 1 in 5 Gen Zers say they plan to find themselves by splurging on a “soul-searching” trip (21%), traveling abroad (20%), or packing their bags for a romantic getaway (24%). 
• Pedal to metal: One in five Americans (19%) say they’re planning trips within driving distance. In May, monthly spend on gas ($193) has declined nearly 23% as compared to last year ($252), according to Empower Personal Dashboard™ data.   
• A season of side gigs: Nearly a third (31%) of Gen Zers and 26% of Millennials are turning to a side gig to save more for their soulstice.   
• Unpacking the price: More than half of Americans are capping their travel spend at $500 for flights and transportation (52%), food (55%) and activities (51%). Nearly a third (31%) plan to splurge on lodging, spending more than $1,000 for their hotel or Airbnb stay. 

Sky-high airline ticket prices. Steep hotel stays. The FOMO travel mentality that rose to fame post-pandemic may be taking a hike for something much more economical. As prices continue to soar across the map, Empower’s new research* explores how Americans are spending in the summer of ’23.

Inflation is in the air

Inflation has cooled the vacation plans of 88% of American consumers, causing travelers to save up for longer, plan fewer getaways, or opt for shorter trips.

In fact, 41% say they won’t be hitting the road or skies this summer, with 20% saying they can’t afford to go on vacation (women 24%, men 15%). Gen Z is least deterred by the current economic climate: 1 in 5 say they plan to find themselves by splurging on a “soul-searching” trip (21%), traveling abroad (20%), or packing their bags for a romantic getaway (24%).

Some 30% of Americans have tapped into a savings account or rainy-day fund to fuel their summer plans. Gen Z is saving a bit differently: they’re trimming back on hair/nail appointments (24%) and cancelling streaming subscriptions (18%).

Rules of the road

One big ticket item working in consumers’ favor this season: gas prices. In May, monthly spend on gas ($193) has declined nearly 23% as compared to last year ($252), according to data from Empower Personal Dashboard™.

This may be why 1 in 5 Americans (19%) say they’re planning trips within driving distance. The iconic summer road trip may be bouncing back after record-high prices at the pump last June.   

 Other activities on the summer itinerary for Empower’s survey respondents: 

• 42% want to visit family and friends this summer 
• 35% will spend for family-friendly activities 
• 28% plan on outdoor adventures (reminder: most national parks in the U.S. are free) 
• 24% are interested in sightseeing  
• 22% will hit up concerts or festivals

The tradeoff for a trip 

Nearly a third (31%) of Gen Zers and 26% of Millennials are turning to a side gig to save more for their OOO time.

Overall, Americans are taking a few different paths to save: 

• 37% have reduced the amount they eat out 
• 21% are cutting back on premium purchases such as furniture and clothes 
• 19% are passing on local concerts or the theater 
• 18% have slashed beauty services (22% for Millennials)

Paying for a vacation often requires planning ahead, and nearly a third of Americans (30%) planning to travel say they create a monthly budget to save up for the season’s adventures.

Lacey Cobb, CFA, CFP®  and director of advice solutions for Empower, suggests automating savings into a designated travel fund: “Consider automating your savings by having a portion of your paycheck automatically go toward a high-yield cash account. Try naming it, too – sometimes having the designation can help build excitement (and discipline) for what’s to come.”

Unpacking the price 

More than half of Americans who are planning on traveling this summer are capping their spend at $500 for flights and transportation (52%), food (55%) and activities (51%). Nearly a third (31%) plan to splurge on lodging, spending more than $1,000 for their hotel or Airbnb stay. 

A quarter of respondents planning to vacation are willing to dish out between $500 -$1,000 for food (26%) and experiences (25%). And souvenirs don’t seem to be having a moment: just 33% expect to spend more than $500 on shopping during their trip.  

For those looking for tips on how to save this summer, here are 6 travel hacks from Cobb for vacationing on a budget. 

1. Prioritize your plans 

“First, think through what’s most important for your summer getaway,” says Cobb. “Are you looking to unwind? Explore a new place? Visit loved ones? Being crystal clear about what you want will help shape a satisfying time off.”

Before booking, be sure to get on the same page as your travel companions. Empower’s Money Talks survey found half of Americans (52%, and 70% Gen Z, 67% Millennials) say they’ve avoided taking vacations with friends out of concern they don't have the same budget. As you’re planning, communication is key. Agree ahead of time on how much you want to spend and how to split up costs.

As you map out your travel plans, consider these affordable vacation locales for 2023. 

2. Be flexible 

“Rather than having your hearts set on going to, say, Budapest, you can determine a region you want to visit, like Eastern Europe,” says Cobb. “Then search for flights to that geographic area. This way, you take advantage of the least expensive flights, but perhaps more importantly, you may end up exploring cities you may have otherwise overlooked. Who knows – you could fall in love with Krakow, Poland.”

Popular tourist destinations tend to be more expensive, so look for off-the-beaten-path destinations or where the U.S. dollar is strong relative to the local currency.

Ultimately, the more flexible you are with your plans, the easier it is to vacation on a budget, according to Cobb. “Traveling during the off-season and booking flights mid-week will help bring down costs. You can find wildly different prices just by tweaking your arrival or departure days ever so slightly.” 

Read more: How to budget for a European vacation

3. Decide on your big purchases

“You want to fully savor whatever destination you’re visiting, so it may be helpful to plan out your ‘big spends’ in advance,” shares Cobb. “By the same token, it’s important to know what you’re OK with skipping.” 

One approach that may be helpful is value-based spending, according to Cobb, meaning you prioritize what is most important to you and allocate more of the budget toward those things. Is it the location? The accommodation? Dining at fancy restaurants? Entertainment?

While you're on the road, consider our list of different activities that keep spending in check. 

4. Be mindful of transaction fees & exchange rates    

“Before your plane departs, grab some cash in your destination’s local currency,” advises Cobb. “You can use your trip budget as a starting point for how much to withdraw. It’s best to limit your transactions, so get enough so you don’t have to convert multiple times, but not so much you have to convert the excess back to USD at the end of the trip.” 

Many places will accept credit, so it’s worth getting a credit card with no foreign transaction fees for any international trip, according to Cobb.

5. Track your spending

You’ve planned, cashed up, and departed. Now that you’re at your final destination, one way to make sure you don’t overspend is by keeping tabs on your expenditures.

You can use Empower's free financial tools to see all of your account balances in one secure location. The budgeting tool allows you to categorize expenses, so you can make sure your spending aligns with your plan. 

6. Eat like a local

“Browsing the aisles of a local neighborhood market could save money on non-destination worthy meals, especially for breakfast and lunch,” says Cobb. “As a bonus, you can enjoy the entertaining experience of perusing the city’s unique signature flavors.” 

When you do opt for restaurant meals, avoid tourist traps. Skip the main part of town and instead scope out side-streets where restaurants are packed with locals. A full dining room is usually a sure sign of tasty food.

The bottom line 

Not everyone in America will be taking a big trip this summer. The key to turning your time off into a memorable adventure is embracing the unexpected.