New Report Shows US Travel Inflation Stabilizing in 2025

After five straight months of decline, U.S. travel prices have leveled off, now standing effectively flat year-over-year.

According to NerdWallet’s September 2025 Travel Price Index report, overall travel costs in August 2025 were 0% higher than in August 2024, as higher airfares were fully offset by lower lodging and rental car prices.

In other words, a 3.3% rise in flight prices was balanced out by a 3.7% drop in hotel rates and a 4.8% fall in car rental rates over the past year. This stabilization in travel inflation is a welcome change for consumers, especially given that overall consumer prices rose about 2.9% in the same period.

Airfares Climb, but Not Out of Control

Airline ticket prices have ticked up recently. Airfares in August 2025 were 3.3% higher than a year earlier, marking the largest annual jump since January 2025.

This ends a stretch in the first half of the year when flight prices were flat or falling. Even with the recent uptick, today’s airfare costs are not unprecedented – in fact, they remain about 9.6% lower than they were a decade ago (after adjusting for inflation).

Such a long-term drop is unusual when overall prices for all goods rose 35% in that same 10-year span. Industry analysts note that while base airfares appear relatively low over the long run, travelers often feel the pinch from added fees – like baggage charges or seat selection – which aren’t captured in the base price data. Ongoing airline industry changes (e.g. mergers and reduced competition on some routes) could also influence fares going forward.

Hotels and Rental Cars Get Cheaper

Unlike airfare, lodging and car rental rates have become more affordable. Hotel room prices are down 3.7% on average compared to last year, meaning travelers can generally expect to pay less for the same room than they did a year ago.

Similarly, rental car rates have dropped about 4.8% year-over-year, offering relief after the sky-high rental costs seen during the pandemic travel boom.

In fact, rental car prices spiked dramatically in 2021–2022 amid vehicle shortages, but have since “largely come down from the peak,” according to NerdWallet’s analysis. Travelers renting a car now may find notably better deals than they would have a year ago, and far better than during the pandemic’s peak.

It’s worth noting that August 2025 did see a slight rebound in hotel prices month-to-month, after several months of declines (likely due to late-summer travel demand).

Hotel rates rose 2.6% in August versus July, breaking the downward trend, though they still remain lower than last year’s levels. Overall, the larger trend for lodging and rentals in 2025 has been one of easing prices, which has helped counteract pricier air travel.

Other Travel Expenses

Not all travel-related expenses are falling. Dining out during travel has gotten pricier – the cost of food away from home is up 3.9% compared to a year ago.

Entertainment and activities are also more expensive: tickets for movies, theaters, concerts and similar outings rose about 3.4% year-over-year, outpacing general inflation.

These trends suggest Americans are still willing to spend on experiences like dining and entertainment, even as those prices climb. The rise in meals and fun activities means that travelers might feel a bit of a squeeze in their vacation budgets for food and entertainment.

However, the declines in lodging and car costs are significant enough to keep overall travel inflation near zero , which helps soften the blow of those higher restaurant and event bills.

Why It Matters for Travelers

For travelers, the current price landscape offers both challenges and opportunities in planning a trip. Lower costs for lodging and rentals can translate into real savings, helping offset the higher airfares and other expenses.

Here are some key takeaways to consider:

• Savings on stays and cars: Cheaper hotel rates and car rentals mean you can score better deals on accommodations and transportation than you did last year. These savings can help balance out the extra money spent on flights.

• Budget for pricier flights and meals: Expect to allocate a bit more for airfare and dining in your travel budget, as plane tickets and restaurant bills are running 3–4% higher than a year ago. Knowing this, you might plan shorter flights, seek airfare sales, or trim your dining-out frequency to stay on budget.

• Use travel perks and points: You can further blunt rising costs by leveraging travel rewards. Credit cards with travel perks offer money-saving benefits like free checked bags, airport lounge access (for complimentary snacks and drinks), trip insurance, waived foreign transaction fees, or hotel upgrades. Likewise, using frequent-flyer miles or hotel points to book flights and stays can substantially cut your out-of-pocket expenses.

Overall, the stabilization of travel prices is a promising sign for anyone planning a vacation.

Travel inflation in 2025 has essentially hit pause, even as the broader economy sees prices creeping up. In fact, since the pandemic, travel costs haven’t risen as sharply as many other expenses – August 2025 travel prices were only 12% higher than in August 2019, whereas overall consumer prices jumped about 26% in that time.

This means that in relative terms, travel is a bit more of a bargain today than it was pre-pandemic. Travelers who take advantage of the current low lodging costs and rental car discounts can stretch their dollars further.

And by planning ahead – using rewards, hunting for deals, and budgeting for the categories that are up – they can enjoy trips in 2025 without breaking the bank.

Sources:

NerdWallet Travel Price Index (September 2025) nerdwallet.com

U.S. Travel Association (Travel Price Index) ustravel.org