On a recent weekend, Jami Hagerman, a hairstylist from Oklahoma City, embraced an experience akin to a budget-conscious blind date. She and her husband invested approximately $400 in Groupon "mystery vacation" vouchers. These vouchers promised to cover accommodations and airfare for two, but crucially, left the destination entirely to chance. Their adventure landed them in the vibrant city of New Orleans, where they immersed themselves in its rich cultural tapestry, exploring museums, embarking on guided walking tours, and indulging in the city’s famed beignets. "I feel like the value was great for the trip," Hagerman, 29, remarked. "It was fun."
Hagerman’s experience is emblematic of a growing trend: individuals seeking to explore the world despite the palpable pressure of rising travel expenses. The current economic landscape, marked by geopolitical tensions such as the U.S. war with Iran and a general upward trajectory in prices across the travel industry, might suggest a retreat from vacationing, particularly for budget-conscious consumers. However, an analysis of recent spending patterns reveals a surprising resilience, indicating that Americans are not allowing elevated costs to derail their travel aspirations.
Data from PNC card transactions, exclusively analyzed for CNBC, indicates that lower-income consumers, defined as those earning less than $36,675 annually, have increased their monthly spending on travel in the early part of this year compared to any point since at least 2019. Specifically, spending within this demographic rose by 7% in July compared to the same month in the previous year, a significant indicator of their commitment to travel.
Price Pressures and the Rise of Value Travel
Groupon has significantly expanded its "mystery vacation" offering, initially a limited promotion for North America, into a comprehensive portfolio. This expansion has yielded impressive results. In the second quarter of 2026, the platform recorded approximately 5,500 orders for these mystery trips, a more than five-fold increase from the first quarter of 2025 when only the flagship product was available, according to data shared by Groupon with CNBC.
The flagship mystery vacation package, priced between $199 and $299 per person depending on the departure airport, is advertised with a substantial 50% discount. While a small fraction of travelers may find themselves whisked away to exotic locales like Singapore or Paris, the vast majority are routed to domestic destinations such as Las Vegas, Atlanta, or Orlando. Participants typically receive notification of their assigned destination within a few days of completing the necessary booking paperwork.
Tammy Wales, a travel agent based in Georgia, shared her own experience with a mystery vacation that led her to Orlando, Florida. "Orlando probably wouldn’t have been in my top 10 pick of places," she admitted. However, her sentiment underscores a broader theme: "As long as I’m gone, I don’t really care. The biggest thing was being able to take a trip and have the element of surprise." This willingness to embrace the unexpected highlights a shift in priorities, where the experience of travel itself outweighs specific destination preferences for some.
The context for this burgeoning demand for value travel is a significantly more expensive environment. Gas prices are on track for a record high on Labor Day, having surged approximately 30% annually, according to AAA. Airline fares have also seen a substantial increase, with the Bureau of Labor Statistics reporting a year-over-year jump of over 25% as of July. This inflationary pressure on transportation costs would logically deter discretionary spending.
Simultaneously, certain segments of the travel industry have intensified their focus on the luxury market. Major airlines, including Delta and Southwest, have actively enhanced their premium offerings, such as expanding first-class cabins and improving lounge amenities, to cater to high-paying clientele. This bifurcation in the market – a push towards premium experiences for some, and a search for affordable options for others – creates an interesting dynamic.
However, the outlook for value-oriented travel remains robust. Industry data provider OAG notes that low-cost airlines have steadily gained market share in 2025 compared to pre-pandemic levels. While the recent shutdown of Spirit Airlines in May could potentially impact this trend, the underlying demand for affordable air travel appears to persist. Furthermore, in the hospitality sector, Jay Morrow, head of hospitality advisory at Walker & Dunlop, observes that despite an increase in luxury hotel development, the majority of new hotel rooms are still being constructed in relatively affordable tiers. This suggests a sustained focus on catering to a broader range of budgets within the accommodation sector.
Travel in ‘Good Times and Bad’: Resilience of Value Segments
Groupon’s mystery vacation packages are not the sole indicator of the growing appeal of value-centric travel options amidst rising prices. Hostelworld, a prominent booking platform for hostels and other budget-friendly accommodations, reported a 10% increase in transactions from U.S. and Canadian consumers in the first half of 2026 compared to the same period the previous year. This growth, documented in the company’s interim results presentation, indicates a strong preference for cost-effective lodging. Across all regions, Hostelworld noted a rise in its net average transaction value compared to the prior year, suggesting that even budget travelers are willing to spend slightly more for their chosen accommodations.
Ewout Steenbergen, finance chief at Booking Holdings, parent company of Booking.com, informed analysts in April that average daily rates for the company’s lower-end segment remained flat. He characterized this as an improvement, particularly following a period of declining rates. This stability in pricing for budget options likely contributes to their continued appeal.
Budget-friendly cruise operator Carnival Corp. is also experiencing robust demand. The company reports that bookings for the remainder of 2026 and beyond are stronger than in the comparable prior-year periods. In its fiscal second quarter, revenue from a segment encompassing on-board spending saw an increase of over 7% year-over-year. David Bernstein, Carnival’s finance chief, expressed confidence in the company’s resilience, stating, "We’re somewhat recession-resilient. We do very well in good times and bad."
Bernstein further highlighted a strategic advantage for Carnival: approximately half of the U.S. population lives within a five-hour drive of a Carnival cruise departure port. This proximity allows many travelers to forgo airfare, a significant cost component, thereby making cruises a more accessible vacation option.
Kenny Wilson, a stay-at-home mother from Texas, exemplifies this trend. Each year, she and her husband pack their two children into their car and drive to a cruise port in Galveston. By leveraging deals that offer free passage for children with paying adults, she manages to cap their total cruise cost at $1,000. "In this economy for the middle class, it’s very, very hard to get vacations in there," the 27-year-old shared. "I’m just so grateful that I figured out a way out that I could still give my kids a beautiful childhood and memories for cheap." Her sentiment underscores the emotional and practical importance of affordable travel for creating family memories.
From Luxury to Necessity: The Evolving Perception of Travel
The resilience of value travel extends beyond traditional budget options. A March survey conducted by Snap Finance among nearly 1,400 "credit-challenged" consumers revealed that more than one in ten reported spending at least $300 on vacation or travel expenses in the preceding six months, even as over 40% of this group indicated experiencing some level of financial instability.
The impact of larger tax refunds, potentially influenced by policies such as President Donald Trump’s "big beautiful bill" (referring to the Tax Cuts and Jobs Act of 2017), may be contributing to consumers’ ability to maintain discretionary spending on travel. A report by the U.S. Travel Association estimates that lower-income consumers collectively might allocate half a billion dollars from their enhanced tax returns to travel this year.
However, evidence also suggests consumers are actively seeking ways to mitigate costs. Expedia reported in June a more than 1,200% surge in searches using budget filters compared to the previous year. Similarly, Vrbo indicated in June a 16% year-over-year increase in users booking stays within two weeks, signaling a growing trend of consumers hunting for last-minute deals to secure lower prices.
Even as consumers continue to spend on travel, the escalating costs of what is often considered a discretionary expense could be impacting their psychological well-being. Brian LeBlanc, PNC’s senior economist, notes that while spending continues, the sentiment surrounding it may be less positive. The University of Michigan’s consumer sentiment survey, a closely watched economic indicator, registered an 11% decrease in August compared to the previous year, with respondents citing expectations of higher fuel prices as a significant factor dampening confidence. "They’re going on Expedia, they’re putting in the airline, they’re seeing the eye-popping number, and they’re feeling bad about it, but they’re still paying for it," LeBlanc observed. "People are still swiping the cards, but that doesn’t mean they’re feeling good about it."
PNC’s analysis also revealed that higher earners are spending more on travel compared to 2019 than other income groups, a phenomenon LeBlanc attributes to the uneven post-pandemic economic recovery, often referred to as the "K-shaped economy." This divergence highlights the differing financial capacities and priorities across income brackets.
The consistent propensity to spend on travel across various income levels might also reflect its elevated status as a priority in the post-Covid era. Tarik Dogru, an associate professor at Florida State University’s hospitality school, suggests that the "revenge travel" phenomenon, characterized by a strong desire to travel after periods of lockdown, should now be viewed not as a fleeting trend, but as a new normal. "Travel is not a luxury anymore," Dogru asserts. "It became a necessity." This perspective shifts travel from an occasional indulgence to an integral part of life and well-being.
Hagerman, the hairstylist from Oklahoma City, finds this assessment resonates with her personal experience. After adhering to pandemic-related restrictions and remaining in her home state for an extended period, she has consciously chosen to forgo larger housing expenses to allocate funds towards travel. This has enabled her to visit destinations like Hawaii and Washington. She is even considering another Groupon mystery vacation, finding it an effective way to explore new places without straining her budget. Her only wish is to avoid returning to New Orleans, a city she has now visited twice. "I’m really not that picky," Hagerman stated. "I just feel fortunate that we got to go anywhere." Her sentiment encapsulates the broader desire to experience the world, prioritizing the act of travel itself as a vital component of a fulfilling life.
