Planning a trip in 2025? Be prepared to spend more — but not for the reasons you might expect.
According to a new report from The Points Guy, travel costs are projected to rise, yet airfare prices are set to remain relatively flat. Instead, lodging drives up expenses, alongside other factors tied to inflation and post-pandemic demand.
“Airfares are going to be about flat to start the year,” The Points Guy founder Brian Kelly explained on Good Morning America. “It’s not airfare that people need to look at when planning that full trip cost. Lodging has gone up dramatically.”
The report reveals that since 2019, lodging costs have increased by 10%, while airfare has dropped by 6%. Despite this, inflation has pushed nearly every other aspect of travel higher, leaving overall costs above pre-pandemic levels.
Even as prices climb, travel demand is booming. The Transportation Security Administration recorded over 3 million passengers in a single day in 2024—a new record. According to a Deloitte survey, 31% of travellers said the cost of travel was too high in 2024, up from 24% the previous year. Yet many people are still taking longer trips and spending more.
The average trip length has increased from 4.5 days in 2020 to 5.5 days in 2024, with travellers heading to Europe or Africa often staying two to three days longer. Younger generations, especially Gen Z and millennials, are leading the charge, strongly preferring international travel.
Adults aged 18 to 41 were just as likely to book international flights as domestic ones, a trend not mirrored by older generations.
Interestingly, young travellers are prioritising value in creative ways. A McKinsey report found that nearly half of Gen Z travellers opt for savings on flights — including booking layovers — to splurge on experiences at their destination. Authentic activities, cultural immersion, and luxury are top priorities for these jet-setters.
However, those choosing cheaper flight options should proceed with caution. In recent years, there has been a surge in delays and cancellations, and travellers must choose airlines carefully.
The 2024 AirHelp Score ranked global airlines based on customer complaints, on-time performance, and service quality. Tunisair ranked the worst airline globally, while Brussels Airlines secured the top spot. United Airlines and American Airlines emerged as the most reliable options for domestic travel.
Despite higher costs, travellers are more enthusiastic than ever to explore new destinations, focusing on maximising the value of their trips. While lodging and other expenses may strain budgets, the desire to discover the world remains unshaken, with people finding ways to make their adventures worthwhile.
