US Travel Costs Are Declining, Here’s Why

While inflation is ticking upward in the United States and currently sits at 2.7 percent, US travel costs are declining.

The August 2025 Travel Inflation Report from NerdWallet shows that for the fifth straight month in a row, travel costs in the United States have trended downward. All in all, according to the report, average U.S. travel costs are 1 percent lower than they were this time in 2024. 

“Another month of reduced demand has once again been reflected in travel prices, which are down for yet another month in a row,” NerdWallet travel expert Sally French said.

“Major tourism destinations, including Las Vegas, Orlando and Hawaii have seen softer than expected demand,” French added.

However, the overall decline in travel prices is somewhat deceiving. Hotel room rates are indeed cheaper this year compared to last – down a significant 4.8 percent. That notable drop is what’s driving the broader travel index decline.

But some categories of travel expenses are actually more expensive this year, tracking with the inflation impacting many other costs for Americans. For instance, according to the NerdWallet report, the cost of both airfare and car rentals are up 0.7 percent each. 

Even more significantly, the cost to eat out is up 3.9 percent, while ticket prices for movies, theaters and concert have also spiked, rising 3.8 percent.

Relative to pre-pandemic prices, July 2025 travel costs are up 9 percent versus July 2019 (which was the last full equivalent month before the 2020 COVID-19 pandemic). The good news? That figure is far lower than the 26 percent price increase across all items.

10-year look back at travel costs

To provide some context surrounding U.S. travel costs at the moment, the NerdWallet report also offers a comparison to what we were paying 10 years ago.

For instance, when you look at July 2025 airline ticket prices, compared to those from June 2025, the costs of tickets is up 0.7 percent, as already mentioned. (Notably, that’s the first time since January that airline ticket costs have increased compared to one year earlier.)

But when you look at what we were paying for airline tickets a decade ago, the data reveals costs are actually down 16.6 percent.

The same however, cannot be said for hotel room rates. While prices are currently down 4.8 percent from last year, they’re up 12.3 percent from a decade ago.

This article originally appeared in TravelPulse.

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