Are travel prices going up or down this year? That depends largely on whether you’re a budget or luxury traveler.
Economists are citing a K-shaped economy to explain how two seemingly opposing things — tourism is down, yet some prices are going bananas — can be true.
Those with means are spending it on premium airfares, specialty cruises and luxury resorts, driving prices up.
Those hurt by inflation and uncertainty are cutting back on discretionary travel, pushing some prices down — or at least keeping them in check. Walt Disney World, which raised most of its prices in October, kept its lowest-priced ticket unchanged, according to the personal finance website NerdWallet.
“We’re seeing top-tier brands discounting lower-demand days,” said Sally French, a travel expert at NerdWallet. “These brands don’t want to offer lower prices outright because they don’t want to cheapen their aura, but they’re doing things to offer opportunities to save.”
On the flight front, domestic airfares were down more than 3 percent in 2025, according to the U.S. Travel Association’s December travel price index. It said the average domestic ticket in December was nearly $266 compared to nearly $275 the year before. But the figures do not take into account the unbundling of services like checked bags — a practice even Southwest Airlines adopted last year — and seat reservations.
Next June and July, World Cup matches in the United States are expected to add a sizable number of international visitors on domestic routes, and fliers could face a spike in airfares. Another concern is the fate of Spirit Airlines, the ultra-low-cost carrier that has been operating in bankruptcy since August.
“The best-case scenario for the average traveler would be a merger,” said Katy Nastro, a spokeswoman for Going, which alerts members to low airfares. “We don’t want a world where we don’t have Spirit because they help pull prices down where they fly.”
Hotel rates, on average, have been largely flat, which is forecast to continue in 2026, according to CoStar Group, which tracks commercial real estate.
Artificial intelligence pricing may make it harder for consumers to find good or lasting lodging deals as the algorithms become smarter at adjusting rates based on past results, events and demand, said Tim Hentschel, the chief executive of HotelPlanner: “If you see a price in line with a historic average, it’s best to snatch it up because it will probably only go up.”
Elaine Glusac is The Times’s Frugal Traveler columnist, focusing on budget-friendly tips and journeys.
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