With vacations ‘crazy expensive,’ small businesses say Americans are staying closer to home

The reported boost to domestic tourism, though anecdotal, comes as higher airfares and gasoline prices have made vacations more expensive. The FIFA World Cup soccer tournament and celebrations of the nation’s 250th birthday have given some U.S. residents additional incentives to create summer memories without going far.

Motor club federation AAA estimated that 72.2 million Americans would travel at least 50 miles from home between June 27 and this Sunday. That’s 0.5% more than the number who got away during last year’s July Fourth travel period, but the forecasted increase is almost all due to people taking cruises, buses and trains; AAA expects no change in the number driving or flying to their destinations.

A meaningful reduction in summer globetrotting might have an upside for businesses that depend on tourists, said Tarik Dogru, an associate professor at Florida State University’s Dedman College of Hospitality. Fewer U.S. residents heading abroad or flying across the country means more of their vacation budgets are staying local too, Dogru said.

“The current economic and tourism dynamics are likely to redirect spending toward small businesses, such as regional restaurants, local attractions, Airbnb hosts, and roadside businesses along drive routes that serve budget-conscious and close-to-home travel,” he said.

If the trend holds through the summer and the rest of the year, it could reduce a travel and tourism trade deficit the United States has run since the COVID-19 pandemic. Each year since 2020, Americans spent more on foreign travel than international visitors spent on travel-related goods and services in the U.S., according to the National Travel and Tourism Office.

Morgan Kain, a teacher in Baltimore, said her family is among the ones keeping their travel bugs in check for financial reasons. Kain, her husband and three children usually take multiple trips each summer, including a weeklong stay at a Virginia lake house. Last year, they spent six weeks traveling around Italy.

“This summer, we’re still doing a couple overnights and the lake house, but nothing else,” Kain said. “Things are crazy expensive, from travel costs to food costs to gas.”

Vacationers are taking trips within driving distance

Despite gasoline costing more than it did a year ago, 85% of Independence Day week travelers were expected to drive to their destinations, AAA said, noting that car trips still are cheaper than flights for the most part.

Around Lake Tahoe, which straddles California and Nevada, several businesses reported spotting more visitors driving in from cities along the West Coast.

Ron Williams, who owns Tahoe Sports, said he worried at the beginning of the season that customers might not show up to rent boats and Jet Skis due to economic concerns. Like the gasoline that powers cars, the price of boat fuel went up during the Iran war.

But Williams so far is “pleasantly surprised with how well the business is doing across the board.” His future bookings are 10% higher compared to the same time last year, he said.

“I think people are probably sticking close to home, and being in Lake Tahoe, we have such a huge drive-up market,” Williams said.

Increased demand for the three Lake Tahoe area rental properties that Jerry Bindel manages for Pyramid Global Hospitality also came as a relief. Ski season bookings petered out along with the snow during an unusually warm winter, but “we just saw that flip” with the arrival of hiking and boating weather, he said.

Bindel, an area general director for the property management company, said he spotted a possible sign of Tahoe visitors watching their spending: more of them skipping restaurants and using the kitchens in their rental units or outdoor barbecue grills to prepare their own food.

“We’re seeing a lot of additional use on those items this summer,” he said.

Locals still want to have memorable summer experiences

In Asheville, North Carolina, small business owners have hoped tourism would rebound since Hurricane Helene and flooding from days of torrential rain caused widespread destruction to the city’s landscape, buildings and infrastructure in September 2024.

Aubrey Anderson, who owns a river tubing outfitter in Asheville, reduced her summer staff from 100 people to 25 after Helene. After reservations picked up earlier this year and she noticed “a lot new people coming into town,” Anderson felt encouraged enough to hire 50 workers for Zen Tubing’s current season.

The unfamiliar faces include day-trippers driving in from South Carolina, Tennessee and other parts of North Carolina to spend several hours floating down the French Broad River for around $30 per person, Anderson said. After tubing, customers from around the region often grab a meal, stop at a brewery, shop or visit other local attractions before heading home, which is “a win for Asheville as a whole,” she said.

“We’re definitely seeing a lot of locals, so to speak,” Anderson said. “People are maybe skipping the long drive to the beach this year, and they’re kind of doing just something close by so that they can save a little money and still enjoy a family outing.”

Factory tours offered by French Broad Chocolate have surged this summer, according to Jael Skeffington, the Asheville chocolate maker’s CEO and co-founder. Tour-takers often stop in the on-site cafe for ice cream or coffee and buy a box of chocolate bars or bonbons before they leave, she said.

“So it’s good for business, but it also seems to be what people are looking for is something to do, not just something to eat — something to experience.” Skeffington said.

Cities are getting a World Cup boost

Soccer enthusiasts have poured into Kansas City, Missouri, just like other North American cities hosting World Cup matches.

Made in KC, a chain of four cafes and 11 shops that sells locally made sauces, Kansas City-themed gifts and T-shirts for fans of the city’s professional sports teams, has gotten “really noticeable spikes of traffic” at all its locations during the tournament, co-owner Keith Bradley said. World Cup-related merchandise, including $40 hats featuring the team colors of this year’s competitors, have been a big hit, he said.

American tourists from other Midwestern cities — Des Moines and Omaha both are within a three-hour drive from Kansas City — seem to outnumber U.S. visitors from farther away, Bradley noted.

“We have a couple locations that are in tourist parts of Kansas City. … But then we also have little shops that are just in suburban neighborhoods in Kansas City, and those have also seen World Cup traffic of people going to watch parties, people coming in town to go to the games, and then tourists just exploring Kansas City on their own.”

Mollie Lothman, co-owner of McLain’s Bakery, a family-owned cafe with five locations, said she thinks the cost of food and lodging in Kansas City compared to bigger or better known host cities has helped.

“We’re one of the smaller markets who got the World Cup in Kansas City, but we’re also probably one of least expensive markets, in terms of family budgeting, to try to come and experience the World Cup,” Lothman said. “So I think that’s been a huge draw for people.”