Airfares are down, so it’s a good time to travel.
But the dollar is down, too, so it’s not a good time to go abroad.
Can both be right?
Much depends on your budget for discretionary spending, but the volatile American economy is having a whiplash effect on travel planning.
In a recent survey, the financial website Bankrate found that fewer than half of respondents planned to travel this summer. Of those not traveling, 65 percent said they couldn’t afford it.
According to an analysis of its credit card data, Bank of America found airline and lodging spending was weaker so far in 2025 compared with the past few years.
Politics, too, may influence travel patterns. Rob Stern, a travel adviser in Raleigh, N.C., who runs the company Rob Plans Your Trip, noted a rise in interest in Alaska and Hawaii, domestic destinations he considers “emotional comfort” places.
“The fact that I don’t have any Europe travelers this summer right now and no inquiries for Europe tells me it’s going to be a different kind of year,” Mr. Stern said.
Here’s a look at the shifting economics of travel and how to find a deal this summer.
How will the dollar’s decline affect travel?
The dollar isn’t what it was just six months ago. The U.S. Dollar Index, which tracks the dollar against a basket of foreign currencies, is down about 8 percent since the beginning of the year. The dollar, close to even with the euro in January, has now fallen to 0.88 euros, meaning a €100 hotel room costs $113 now, compared with $102 in January. The exchange rate with the Japanese yen has also depreciated from about 158 yen to the dollar in early 2025 to about 145 today.
“The dollar is weakening because of an increase in policy uncertainty, lower prospects for growth, and increasing deficits and debt,” said Robert McNab, the chair of the department of economics at Old Dominion University in Norfolk, Va.
Add in the movement by investors to sell American stocks and bonds, “and you have a mix that will pressure the dollar and make international travel markedly more expensive for Americans,” he added.
Travelers seeking to avoid further losses may consider prepaying for expenses like hotels and tours. But be aware that many prepayment rates are nonrefundable and travelers would lose out if the dollar strengthens or prices drop.
Though it has dipped a little, the dollar is still holding up well against the Canadian dollar (1.38 Canadian dollars to $1) and the Mexican peso (19 pesos). In addition to the exchange rate bonus, both countries are nearby, making flying there cheaper than to many other foreign destinations.
How much will I save on airfare?
Airlines have acknowledged a slackening in travel that they hadn’t anticipated at the beginning of the year. Since prices follow demand, some fares have fallen. The travel search engine Kayak said its results showed an average flight price drop of 7 percent across domestic and international routes.
In early May, the flight-booking app Hopper found round-trip airfare to Europe was averaging $847 per ticket compared to about $915, an 8 percent drop.
Even if there are fewer fliers, don’t count on bargain fares in the busy months of June and July. Kayak suggests booking a late-August trip for the best summer fares.
The flight app Going recently found international flights in August averaging $1,224, or $180 cheaper than flights in June. It identified the best deals as Latin America (averaging $752) and the Caribbean (averaging $703).
How can I find travel deals?
Looking for savings in August isn’t just an airline strategy. The last two weeks in August tend to be a good time for summer travel savings in general as school resumes in many districts.
Being flexible — meaning not wedded to a particular date or destination — is the best savings strategy.
“If you want a beach, and you don’t care which beach, let the deal dictate when and where you go,” said Ted Rossman, a senior industry analyst at Bankrate.
Other flexible strategies include booking off-season travel and looking for destinations that are similar, such as choosing French-speaking Montreal instead of Paris.
“If a big flight is not in the cards, take a regional road trip or a shorter flight,” Mr. Rossman said.
Fueling a road trip should be cheaper this summer. AAA has the current average price per gallon at $3.17 compared with $3.59 a year ago.
Will there be last-minute domestic deals?
As the planning window closes on summer travel — and if foreign travelers do avoid U.S. destinations — domestic travelers may benefit. Mr. Stern, the travel adviser, recommends keeping an eye out for sales on hotel packages, tours and cruises that might have been canceled 45 to 60 days in advance of travel, when final payment is usually due.
“People who can take advantage of these deals are people who can be decisive, who can travel on flexible dates and are flexible on destinations,” he said.
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