Low-Income Americans Are Spending More on Travel Than in Years, Despite Record Costs
Gas prices are running roughly 30% above year-ago levels and on pace for a Labor Day record, according to AAA. Airline fares climbed more than 25% year over year as of July, per the Bureau of Labor Statistics.
Yet as CNBC reported September 5, Americans earning under $36,675 annually are spending more each month on travel than at any point since at least 2019, citing PNC card data.
Spending by that lower-income cohort rose 7% in July compared with the same month a year earlier, according to PNC.
The travel industry has largely pivoted toward premium customers, with carriers from Delta to Southwest adding expanded first-class cabins and upscale lounges. Budget travelers are responding by hunting for deals rather than staying home.
Mystery Packages and Last-Minute Deals
One tactic gaining traction is Groupon's "mystery vacation" program, which sells bundled airfare and hotel packages without revealing the destination upfront.
The flagship product is priced at $199 to $299 per person depending on departing airport, advertised as a 50% discount.
Most buyers are routed to domestic cities such as Atlanta, Las Vegas, or Orlando, though a small share land in international destinations like Singapore or Paris.
Groupon expanded the offering from a single flagship product into a broader portfolio. Orders reached roughly 5,500 in the second quarter of 2026. That's a more than fivefold increase from the first quarter of 2025, when only the flagship existed.
Jami Hagerman, a 29-year-old hairstylist from Oklahoma City, spent about $400 on mystery vouchers for herself and her husband and was sent to New Orleans. She told CNBC the value was strong and that she was not particular about the destination.
Tammy Wales, a Georgia-based travel agent who drew Orlando through the same program, said the surprise element mattered more to her than any specific city.
The deals are clearly resonating. Expedia reported in June that searches using budget filters had climbed more than 1,200% compared with 12 months earlier.
Vrbo separately noted a 16% year-over-year rise in bookings made within two weeks of a stay, pointing to a surge in last-minute deal-seeking.
Hostels and Cruises Draw Cost-Conscious Travelers
Hostelworld, an Ireland-based hostel booking platform, recorded a 10% rise in transactions from U.S. and Canadian users in the first half of 2026 versus the prior-year period.
Cruise lines are also seeing demand hold. Carnival Corp. reported that bookings for the remainder of 2026 and beyond are running ahead of equivalent prior-year comparison periods.
Revenue in the segment covering on-board spending jumped more than 7% year over year in its fiscal second quarter.
Carnival's chief financial officer David Bernstein described the company as somewhat recession-resilient, performing well across varying economic conditions.
Budget cruising has its own tricks. Kenny Wilson, a 27-year-old stay-at-home parent from Texas, told CNBC she caps her family's annual cruise at $1,000 by combining deals that let children sail free with paying adults.
She drives with her husband and two children to a cruise port in Galveston to avoid airfare entirely.
Spending Up, Confidence Down
PNC senior economist Brian LeBlanc cautioned that continued spending does not mean consumers feel comfortable. He told CNBC that travelers are seeing high airfare prices on booking sites and reacting with frustration, even when they ultimately complete the purchase.
Frustration doesn't stop the purchase. The University of Michigan's consumer sentiment index came in 11% lower in August than a year earlier, adding context to the gap between what people are spending and how they feel about it.