On a recent weekend, Jami Hagerman, a hairstylist from Oklahoma City, found herself on a travel adventure akin to a blind date. For approximately $400, she and her husband purchased Groupon "mystery vacation" vouchers, a package promising accommodations and airfare for two without revealing the destination beforehand. Their surprise destination was New Orleans, where they immersed themselves in the city’s rich culture, exploring museums, embarking on walking tours, and indulging in the iconic beignet dessert. "I feel like the value was great for the trip," Hagerman, 29, shared, reflecting on the experience. "It was fun."
Hagerman’s inclination to explore the world, even as inflation continues to exert pressure on household budgets, is not an isolated phenomenon. Despite surging travel costs, exacerbated by geopolitical events and ongoing economic shifts, data indicates that American consumers are not forsaking their travel aspirations. Instead, many are actively seeking out more affordable options and re-evaluating their spending priorities to accommodate these experiences.
Data from PNC card transactions, analyzed exclusively for CNBC, reveals a significant trend: lower-income consumers, defined as those earning under $36,675 annually, have increased their monthly spending on travel in the current year compared to any point since at least 2019. In July alone, this cohort’s travel expenditures rose by 7% year-over-year. This suggests a strategic reallocation of funds, where travel, often perceived as a discretionary expense, is being prioritized even by those with tighter financial constraints.
The Rise of Value-Centric Travel Offerings
Groupon’s "mystery vacation" program, initially a limited offering for North America, has since expanded into a comprehensive portfolio. This expansion has seen a dramatic surge in demand, with the portfolio recording approximately 5,500 orders in the second quarter of 2026. This represents a more than five-fold increase from the first quarter of 2025, when the offering was primarily limited to a single flagship product, according to data shared with CNBC by Groupon.
The flagship package, advertised with a discount of up to 50%, ranges from $199 to $299 per person, depending on the departure airport. While a small fraction of travelers might find themselves on exotic trips to destinations like Singapore or Paris, the majority are directed to domestic locations such as Las Vegas, Atlanta, or Orlando. Participants are typically informed of their destination within a few days of completing the necessary booking details.
Tammy Wales, a travel agent based in Georgia, experienced this element of surprise firsthand when her mystery vacation landed her in Orlando. "Orlando probably wouldn’t have been in my top 10 pick of places," she admitted. However, she emphasized the overall positive sentiment: "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 sentiment underscores a broader shift where the experience of travel itself, coupled with a sense of unexpected discovery, outweighs specific destination preferences for some budget-conscious travelers.
The backdrop to this increased demand for value travel is a challenging economic environment. Gas prices, for instance, were on track for a record high on Labor Day, having risen approximately 30% annually according to AAA. Similarly, airline fares experienced a significant surge, climbing over 25% year-over-year as of July, as reported by the Bureau of Labor Statistics. These increases in direct travel costs would typically deter leisure travel, particularly for lower-income households.
Industry Adjustments: Premium Offerings and Budget Resilience
Amidst these price pressures, some segments of the travel industry have doubled down on premium offerings. Major airlines like Delta and Southwest have been actively expanding their first-class cabins and enhancing lounge amenities to attract high-spending travelers. This strategy aims to capture a larger share of the market by catering to those less sensitive to price increases.
However, the outlook for value travel appears more robust than might be initially assumed. Industry data provider OAG has observed that low-cost airlines have gained market share in 2025 when compared to pre-pandemic levels. While the recent shutdown of Spirit Airlines in May could introduce some volatility to this trend, the overall resilience of budget carriers is noteworthy. Furthermore, according to Jay Morrow, head of hospitality advisory at Walker & Dunlop, the majority of new hotel room constructions are still in relatively affordable tiers, despite a recent uptick in luxury hotel development. This indicates a continued focus on catering to a broader range of travelers.
Travel as a Resilient Necessity
The appeal of value-centric travel solutions extends beyond mystery packages. Hostelworld, a booking platform specializing in 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 in the previous year. Across all regions, the company also noted a rise in its net average transaction value.
Ewout Steenbergen, chief financial officer at Booking Holdings, indicated a positive shift in the performance of lower-end accommodations on Booking.com. He shared with analysts in April that average daily rates for this segment remained flat, which he characterized as an improvement following a period of negative readings. This suggests a stabilization and potential recovery in the budget accommodation market.
For budget-friendly cruise lines like Carnival Corp., demand for voyages in the latter half of 2026 and beyond remains strong, outperforming the corresponding periods in the prior year. 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 CFO, described the company’s resilience, stating, "We’re somewhat recession-resilient. We do very well in good times and bad."
A significant factor contributing to Carnival’s appeal is its accessibility. Bernstein highlighted that approximately half of the U.S. population lives within a five-hour drive of a Carnival cruise departure port, enabling travelers to forgo airfare costs. Kenny Wilson, a stay-at-home mother from Texas, exemplifies this strategy. She and her husband regularly drive their two children to a cruise port in Galveston, capping their total cruise expenditure at $1,000 by utilizing deals that offer free passage for children accompanying paying adults. "In this economy for the middle class, it’s very, very hard to get vacations in there," Wilson, 27, expressed. "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."
The Evolving Perception of Travel: From Luxury to Essential
The trend towards prioritizing travel is evident even among consumers facing financial challenges. A survey conducted by Snap Finance in March, which included 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, despite over 40% indicating some degree of financial instability.
This ability to allocate funds towards travel might be partially attributed to larger tax refunds resulting from the Trump administration’s tax policies. A report from the U.S. Travel Association estimates that lower-income consumers are collectively expected to spend half a billion dollars from their enhanced refunds on travel this year.
However, this doesn’t mean consumers are oblivious to rising costs. Data from Expedia shows a significant surge in searches using budget filters, increasing by over 1,200% compared to the previous year. Vrbo also reported a 16% year-over-year rise in bookings made within two weeks of the travel date in June, suggesting a growing trend of travelers seeking last-minute deals to manage expenses.
Brian LeBlanc, a senior economist at PNC, cautions that while consumers may continue to spend on travel, the psychological impact of these higher costs cannot be overlooked. The University of Michigan’s consumer sentiment survey, a closely watched economic indicator, showed an 11% decrease in August compared to the previous year, with respondents citing expectations of higher fuel prices as a contributing factor to diminished 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 indicated that higher earners are spending more on travel compared to 2019 than other income groups. LeBlanc interprets this as another facet of the uneven post-pandemic economic recovery, often referred to as the "K"-shaped economy, where different segments of the population experience vastly different economic outcomes.
Tarik Dogru, an associate professor at Florida State University’s hospitality school, posits that the sustained propensity to spend on travel across income classes reflects its elevated status as a priority following the COVID-19 lockdowns. He suggests that the post-pandemic phenomenon of "revenge travel" should now be considered a new normal rather than a fleeting trend. "Travel is ‘not a luxury anymore,’" Dogru asserted. "It became a necessity."
This perspective resonates with Jami Hagerman’s personal experience. After spending years confined to her home state during the pandemic, Hagerman has consciously opted to forgo larger housing expenses to save money for travel. This strategy has enabled her to visit destinations like Hawaii and Washington. She is even considering another Groupon mystery vacation, finding it an effective way to escape without overspending. Her only hope is to avoid returning to New Orleans, a city she has now visited twice. "I’m really not that picky," Hagerman concluded. "I just feel fortunate that we got to go anywhere." This sentiment encapsulates the evolving nature of travel, transforming from a discretionary indulgence to a fundamental component of life, even amidst economic headwinds.
