Thanksgiving airfare is up 31% year over year as travel shifts

By Elena Vasquez

AAA projected a record 81.8 million Americans for Thanksgiving travel in 2025, and AAA Global travel agent Jodi Abata says the 2026 holiday figure could rise as travelers withstand price increases.

AAA has not published official projections for the 2026 holiday season. Abata nevertheless expects the period to remain a peak travel period.

Priceline’s domestic flight searches for Thanksgiving, Christmas and New Year’s are up from last year, giving hotels a positive demand signal even as cost-conscious shoppers make trade-offs.

The holiday price tag

Hopper’s September data put average round-trip domestic airfare at $402 for Thanksgiving, up 31% year over year, and $452 for Christmas, up 23%. Priceline’s site showed average domestic fares up 20% for Thanksgiving, 6% for Christmas and 20% for New Year’s.

Hotel rates followed: Hopper found $170 per night for Thanksgiving, unchanged from 2025, and $197 for Christmas, up 18%. Those increases lift revenue on sold rooms, but the outlook provides no occupancy, labor, utilities or food-cost data. An 18% rate rise therefore does not establish a margin increase.

PwC’s September snapshot found 40% of consumers planned to travel, down from 44% in 2025, while 17% remained undecided. Jonathan Kletzel, PwC’s sales, service and marketing practice leader, said travelers still want to protect time with friends and family but will make trade-offs as fuel and other costs rise.

Abata said: “I wouldn’t say [travelers] are looking to spend more, but they are going to be spending more.” She expects travelers taking trips of a week or more to choose hotels.

What does this change for hotels?

PwC found that among consumers with holiday travel plans, one-third will skip the plane ticket, 38% will trade down to budget or mid-range hotels and 35% will stay with friends or family rather than pay for lodging. These choices shift spending without necessarily reducing it.

Priceline consumer travel trends expert Christina Bennett said 62% of respondents in its 2027 Travel Trends Report expect to cut or downgrade one part of a trip to upgrade another. “Travelers might take a less expensive flight to stay at a nicer hotel or save elsewhere so they can splurge on a great meal,” she said.

For restaurant operators, that meal can become a destination for discretionary spending, but the research offers no check average, menu-price or food-cost data. Any restaurant revenue benefit remains unquantified.

Demand also divides by income and life stage. Bennett said Priceline has seen no clear divide by generation or income bracket. PwC expects millennials to pull back the most, cutting holiday travel budgets 37% year over year, a change Kletzel tied to parenting and mortgage-related expenses and less discretionary income for food, shelter and clothing.

Kletzel said trade-offs concentrate in the middle- to lower-income market, while higher-income travelers appear insulated from price shocks. Braden Mark, KPMG’s U.S. principal for travel, leisure and hospitality, agreed that affluent travelers are not trading down, calling the K-shaped economy a very real part of the 2026 story.

KPMG’s October consumer pulse found consumers worried about inflation while planning to spend more on travel than on goods. Mark said some will choose longer vacations and premium accommodations. The survey found 31% plan to be away more than five days, up from 25% last year, and 34% plan to book luxury hotels or resorts, up from 28%.

How AI changes the booking process

PwC estimates 60% of consumers planning to travel will use AI during booking: 41% to research or compare hotel and flight prices, 32% for recommendations and 22% to build itineraries. AI takes on manual research and comparison work; the research does not identify whether travelers or booking platforms pay for those tools.

Kletzel said travelers are booking fully refundable trips early and then shopping for better deals, a process AI makes easier. Mark said KPMG has seen no drastic change in cancellation rates and that travelers are holding their original bookings. Abata said supplier apps help travelers, but comfort with AI remains incomplete, so it has not become integral to trip planning.

AI will not replace frontline service, according to Bennett. Priceline research found two-thirds of Americans consider exceptional attention a reason a hotel stay feels memorable, and more than a third have returned because of a memorable staff interaction.

What operators should watch

Holiday room rates, searches and stated travel plans point to firm demand, not a guarantee of occupancy or profitability.

For hotels, the test is whether higher rates and longer stays offset value-driven lodging choices and a 40% travel-planning rate below last year.

For restaurants, the meal trade-up creates a possible spending opportunity, but operators still need check-average and menu-cost data.

Bennett expects the trade-off pattern to persist into 2027, leaving operators to determine whether higher room rates, longer stays and AI-assisted rebooking translate into sold rooms and restaurant spending.