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Personal Finance

The Average Cost of a Vacation

One of the most important aspects of personal finance is saving for things like a home, college education, and retirement. Many people also prioritize taking a vacation, either annually or as the opportunity arises. When it comes to paying for a vacation, though, how do you know what you should be spending and whether you’re getting the best deal for your money?

According to a recent survey, the average American expects to spend nearly $2,000 on vacation. For families, that can easily reach into the five figures. Unsurprisingly, the bulk of that money will go towards travel costs like airline tickets, with lodging being the second-largest expense.

There are several ways to cut back on your spending while still planning a trip you’ll enjoy. This article will break down the different components that make up the cost of your vacation and discuss ways you can save.

In this guide: 

Vacation Costs: Lodging, Food, and Entertainment

Hotels and Lodging

Lodging costs can vary widely depending on where you stay. If you’re staying at a relative’s house for a couple of days, that will obviously be a low-budget expense. Spending a week at the Waldorf Astoria in New York City or renting an Airbnb property with its own private pool in Mexico? That will definitely cost you.

Throughout the United States, the average price of a hotel room is about $129 a night —  but if you stay in a more expensive city like New York, you should plan to pay more. Hotel prices in the “city that never sleeps” averaged about $262 per night in 2018, according to The New York Business Journal.

If you’re hoping to stay somewhere decent but don’t want to shell out a lot of money, look into non-seasonal lodging. You can often find good deals during the off-season when prices are lower. You could also plan a trip with multiple people and split the housing costs.


Unsurprisingly, travel costs can vary greatly depending on the method you choose. The price is determined by where you’re going and how you plan to get there.

For instance, traveling by car is more affordable than a plane trip but also more time-consuming. Let’s look at the three main ways you can travel during domestic trips and how to plan for each.


Although airline travel has become more affordable to many Americans in recent decades, flying by plane is still pricey enough to make some families think twice. As of 2018, the average round-trip domestic flight was around $350, according to the Bureau of Transportation Statistics (BTS). For a family of four, that amounts to $1,400.

The costs increase significantly if you plan to travel internationally. According to the U.S. Passport Service Guide, the average international round-trip ticket price is a whopping $1,368.

However, there are ways to save on plane tickets. Signing up for price alerts could help you book cheaper flights. Any rewards you accumulate thanks to travel credit cards can also help offset the costs of air travel. If that strategy doesn’t work, try buying your tickets at the “right time.” According to the 2019 Annual Airfare Study, the magic number is 76 days before your departure date for domestic flights.

For international plane tickets, the best time to book varies based on region. If you’re heading to the Caribbean, you’ll want to purchase airfare 207 days in advance; for a trip to Asia, trying booking 120 days prior to takeoff.


Traveling by train may be a good option to consider, especially if you’re taking a relatively short trip. City-to-city train tickets on Amtrak cost between $20 and $400 one way, depending on the distance traveled and when your tickets are booked.

However, you may be able to find discounts on Amtrak tickets. Children ages 2 through 12 qualify for half-priced tickets every day, while seniors can receive a 10% discount on most trains. Group discounts are also available, and if you belong to any professional organizations, some of your fringe benefits may include discounted train tickets.


If you’re planning to take a road trip, the first thing you’ll want to do is learn your vehicle’s mileage (i.e. how far your car can go on a tank of gas). Then you’ll calculate the total distance you’ll be driving. The third step is to find the average national gas price, which is currently $2.87.

From there, you should be able to figure out how much you can anticipate spending on gas for your trip. You’ll take the total distance of the trip and divide it by the miles per gallon. Then you multiply that figure by the average national gas price.

If you choose to rent a car to avoid the wear and tear to your own vehicle, the price is going to be higher. According to AAA, the average daily rental car rate is $59.

Food and Entertainment

When it comes to airfare and a hotel, you have limited control over the costs, but the cost of food and entertainment is more flexible. If you mostly eat out at restaurants while vacationing, you can expect to spend more on food — especially when you factor in the cost of alcohol. A typical family of 4, for example, needs to budget at least $132 per day for food, according to one recent study.

To pare down food expenses, you can look for properties that provide free breakfast during your hotel stay. Make sure your room has a refrigerator you can use to store restaurant leftovers to reheat later or the next day. Depending on your accommodations, it might be a good idea to make some of your own meals.

If you’re looking to save, be wary of “all inclusive” resorts. Although unlimited food and drinks sound great in theory, such offers don’t always save you money.

Other Expenses

Your airfare, hotel, and food will take up the biggest bulk of your vacation budget — but don’t forget to plan for additional expenses. This includes things like:

  • Transportation to and from your hotel: If your hotel isn’t within walking distance of the airport, you’re going to need to pay someone to drive you. Do your research ahead of time and find out if your hotel offers a free shuttle, or plan for how much a taxi or Uber will cost.
  • Additional hotel charges: No matter what hotel you stay at, you can plan to pay extra charges beyond just your nightly fee, such as housekeeping tips and parking fees.
  • Car rental: If you plan to rent a car for the duration of your trip, you’ll want to make reservations ahead of time. You’ll almost certainly pay more when renting at the airport. And don’t forget about additional charges, like insurance, tolls, and fees for multiple drivers.
  • ATM fees: If you catch yourself withdrawing money from out-of-network ATMs, expect to pay your share in ATM fees. The average charge for withdrawing money from out-of-network ATMs hit $4.68 in 2018. Swiping a credit card abroad can result in foreign transaction fees, too. A little planning ahead can help you save money on these unnecessary charges.

Ways to Finance Your Vacation

If you haven’t been able to save for your vacation but still want to get out of town, there are ways to finance your trip. Here are two of the most common methods:

  • Credit Cards: There are a number of credit cards that offer travel rewards for the money you spend on groceries, at restaurants, and on everyday necessities. Be sure to pay your balances in full every month to avoid eating into these rewards, though.
  • Personal Loan: Personal loans can be used for a variety of reasons, including to pay for a vacation. Many people prefer these types of loans over credit cards because you can receive a lump sum of money, often at a lower interest rate and with fixed monthly payments. (Read More: Personal loans for vacation)
  • Home Equity Loan or HELOC: You can use a home equity loan to pay for a vacation, often at more favorable rates than you’ll find elsewhere. Just be cautious with this method; you don’t want to risk your home to pay for a trip to Disney. 

If you choose to finance your vacation, make smart decisions. Don’t overspend on your credit card or set up an unrealistic personal loan repayment plan you can’t afford. Otherwise, you risk falling into a dangerous debt cycle even the most exotic vacation destination can’t justify.

Bottom Line

The average American will spend a good part of their annual budget on a vacation — and many will go into debt to do so. But if you’re on a limited budget and need to spend less, there are many ways to save on your next trip. By planning in advance and cutting corners where possible, you will be in a better position to relax during your next vacation.