Market News

BY Mia Gindis and Nathan Risser

Kristin Herman and her partner had been planning a European getaway with stops in Paris and Rome, but with the US economy suddenly wobbling, the couple instead drove to Oregon’s nearby redwood forests and Cannon Beach — even camping some nights to save on hotels.

“It didn’t feel like the right time to spend so much money,” said Herman, a 37-year-old who lives in Portland and works as an educator at Academized.com. “Especially when groceries and rent got more expensive as well.”

As President Donald Trump’s global trade war rattles consumer confidence and threatens to reignite inflation, US travelers are increasingly opting for road trips over flights. About 39.4 million Americans will drive this Memorial Day weekend, up 3.1% from last year and the most in 20 years, according to the American Automobile Association. Some 3.61 million people plan to fly, only a 1.7% gain.

Adding to the allure of road trips, oil prices have dropped to near a four-year low, pushing down gasoline costs. The national average pump price was about $3.14 a gallon Sunday, almost 50 cents a gallon cheaper than a year earlier, AAA data show. US gasoline prices will remain at roughly that level in the second and third quarter, the Energy Information Administration projects.

Meanwhile, domestic flights are 2% more expensive this Memorial Day weekend compared to the same period last year, with an average round-trip ticket costing $850, the AAA said. That’s being driven partly by bargain airlines moving upscale and raising fares. Concerns surrounding airplane safety in light of a few high-profile incidents are also giving travelers pause. The turmoil has led several US airlines to withdraw their full-year earnings forecasts.

Beyond the pricing factors, recent stock market volatility pushed nearly 68% of travelers to alter their vacation plans, from paying upfront to counteract a weakening dollar to canceling altogether, data from travel tech company Histoury shows.

For Julie Brinkman, Americans’ rapidly changing travel plans remind her of the shift during the sweeping flight restrictions and lockdowns to fight Covid-19 in March 2020. Travelers are increasingly opting for destinations like the Gulf Coast, Gold Coast and Smoky Mountains over overseas markets, said Brinkman, chief executive officer of Beyond, a revenue manager for vacation rentals.

“People still want to take trips, but those trips might be closer to home,” Brinkman said. “They’re also waiting longer to book. They need to know that they have job security, that they’re able to fund their trip.”

Energy research firm Wood Mackenzie now sees US jet fuel demand falling 0.7% in 2025, compared to the 1.1% advance it projected at the start of the year. The revision accounts for diminished travel spending as consumers sour on the Trump administration’s economic stewardship, said Austin Lin, an analyst for the firm.

In the meantime, jet fuel demand is still at the highest since 2019 for this time of year on a four-week-average basis, according to US government data.

“There’s an emotional component to the market,” Lin said. Even if the trade war is resolved quickly, the memory of markets’ sudden plunge will keep a lid on discretionary spending, he said.

The richest Americans, who saw their wealth shrink in the recent stock market slide, also are reshaping vacation plans. Travel Beyond — which specializes in trips that average $22,000 per person and feature exotic locales ranging from the Arctic to Africa — saw inquiries in March fall 20% from a year earlier, followed by a 14% drop in April.

So far, at least one client has explicitly cited economic uncertainty in canceling an upcoming trip, while others are adjusting departure dates to capture off-peak prices, according to Kayla Hoyles, a travel adviser at the Minnesota-based firm.

For Oregonian traveler Herman, financial constraints are limiting her Memorial Day weekend plans to either a day trip or nothing at all. Even though Trump’s tariffs aren’t yet showing up in prices, she says she’s already stressed about living costs.

“It feels like we’re all being squeezed from every angle,” Herman said. “And it makes it harder to plan anything long-term.”

(Updates gasoline prices in fourth paragraph, adds jet fuel demand figures in ninth paragraph)