How budget travelers spend their holidays as prices rise

On a recent weekend, Jami Hagerman embarked on the low-budget vacation equivalent of a blind date.

The hairstylist and her husband spent about $400 groupon A “mystery vacation” voucher promises accommodation and flights for two people, but the destination is not mentioned. Oklahoma City residents were sent to New Orleans to visit museums, take walking tours and eat the city’s famous beignet desert.

“I think this trip was worth a lot. It was fun,” said Hagerman, 29.

Mr. Hagerman is not alone in balancing his tendency to see the world with the dangers of rising prices.

Travel costs are rising amid the war between the United States and Iran, and many companies in the industry are turning to premium products to capture higher prices and profits. While conventional wisdom might suggest that affordability-minded American travelers would succumb to this environment, the data shows they aren’t allowing themselves to be left behind.

Low-income customers, those with annual incomes of less than $36,675, spent more months traveling earlier this year than at any point since at least 2019, according to PNC Card data analyzed exclusively for CNBC. Spending for this cohort in July was up 7% compared to the same month last year.

Groupon has expanded what originally started as a “mystery vacation” service for North America into a full portfolio. According to data Groupon shared with CNBC, its portfolio recorded about 5,500 orders in the second quarter of 2026, an increase of more than five times compared to the first quarter of 2025, when it only had the flagship product.

Groupon is promoting 50% off its flagship packages, which range in price from $199 to $299 per person, depending on your departure airport.

A small number of buyers end up in far-flung destinations like Singapore and Paris, but the majority go to domestic locations like Las Vegas, Atlanta, and Orlando. Participants are usually informed of their destination within a few days of filling out the necessary paperwork.

“Orlando probably wouldn’t have been in my top 10 places,” said Georgia-based travel agent Tammy Wales. She came to the central Florida city on a mysterious vacation. But, “as long as I’m gone, I don’t really care. The biggest thing was being able to travel and having the element of surprise.”

According to AAA, gas prices soared toward record highs on Labor Day and are up about 30% on an annual basis. Airfares rose more than 25% in July from a year earlier, according to the Bureau of Labor Statistics.

At the same time, some parts of the travel industry are focusing on the luxury segment. Airlines below delta to southwest Airlines have been competing to add services such as expanded first-class cabins and lounges to attract first-class passengers.

But the outlook for value travel may not be as dire as it seems. Industry data provider OAG has revealed that low-cost airlines have a larger market share in 2025 than they did before the pandemic, but could be hurt by the closure of Spirit Airlines in May.

Jay Morrow, director of hospitality advisory at Walker & Dunlop, said that despite a recent rebound in luxury hotel production, the majority of new rooms are still in the relatively affordable price range.

Groupon’s Mystery Package is not the only value-oriented travel product gaining attention as prices rise.

hostel worldThe company, which provides a booking platform for hostels and other low-cost stays, said transactions from consumers in the U.S. and Canada rose 10% in the first half of 2026 compared to the same period last year. The Ireland-based company said the net average transaction value across the region also increased year-on-year.

Finance Director Euout Steenburgen Reservation heldtold analysts in April that average daily room rates in Booking.com’s parent company’s low-cost segment were flat. He described this as an improvement after a period of negative numbers.

budget friendly Carnival Co., Ltd.cruise demand for the remainder of 2026 and beyond is stronger than the prior year comparison period, respectively. Operating segment revenue, which includes in-flight spending, increased more than 7% year-over-year in the fiscal second quarter.

“We’re somewhat recession-proof,” Carnival’s finance chief David Bernstein told CNBC. “We’ve done very well through good times and bad.”

Bernstein said about half of the U.S. population lives within a five-hour drive of a Carnival cruise departure port, meaning they can choose not to pay airfare during their vacation.

Every year, Kenny Wilson and her husband load their two children into their car and drive hours from their home in Texas to the cruise port in Galveston. The stay-at-home mom said she takes advantage of an agreement that allows kids to sail free if adults pay, limiting the total cost of the cruise to $1,000.

“In this economic climate for the middle class, it’s very difficult to take a vacation,” the 27-year-old said. “We are so grateful that we found a way to give our children a beautiful childhood and memories at an affordable price.”

More than 1 in 10 of the nearly 1,400 “credit-worried” consumers surveyed by Snap Finance in March said they had spent at least $300 on vacation or travel in the past six months. This is despite just over 40% of this group feeling some degree of financial insecurity.

Big tax refunds from President Donald Trump’s “Big and Beautiful Bill” may be helping keep their wallets free. A report from the U.S. Travel Association estimates that low-income consumers will spend a combined $500 million on travel this year due to their high profits.

Certainly, there are signs that consumers are looking for ways to cut costs. expedia announced in June that searches using budget filters increased by more than 1,200% compared to 12 months ago. Vrbo also reported a 16% year-over-year increase in the number of users booking stays for two weeks or less in June, indicating buyers are looking for last-minute deals.

Even if travelers continue to spend big, discretionary experiences like travel can become more expensive and take a toll on their mental health, said Brian LeBlanc, senior economist at PNC. Consumer sentiment in August, closely tracked by the University of Michigan, was 11% lower than a year ago, with respondents citing expectations that rising fuel prices were hurting confidence.

“They go on Expedia, they book a flight, they see these shocking numbers, they feel bad about it, but they still pay the price,” LeBlanc said. “People are still swiping cards, but that doesn’t mean they feel good about it.”

Indeed, PNC’s analysis found that high-income earners are spending more than other income groups compared to 2019. LeBlanc said this is another indicator of the uneven post-pandemic recovery known as the “K” shaped economy.

Tariq Dogur, an associate professor at Florida State University’s School of Hospitality, said the steady trend of spending on jet travel across income groups may reflect its emergence as a larger priority as coronavirus lockdowns begin to lift. Now, Dogle said the post-pandemic “revenge travel” phenomenon should be seen as the new normal rather than a passing fad.

Travel “is no longer a luxury,” Dogle said. “It has become a necessity.”

Hagerman, an Oklahoma City hairstylist, found that description applicable to her own life.

Hagerman, who has remained in her home state for years during the pandemic, has resisted the urge to upsize her home in order to save money on rent. A working mother, she used her savings to fund recent trips to places like Hawaii and Washington.

Hagerman said she is considering purchasing another Groupon mystery vacation because she feels Groupon allows her to get out of town without spending a fortune. The Oklahoma resident said she just hopes she won’t be sent back to New Orleans, which she has visited twice now.

“I’m actually not that picky,” Hagerman said. “I feel really lucky to be able to go anywhere.”