Small business owners in U.S. tourist destinations report an uptick in domestic travel this summer, as Americans increasingly choose road trips and local excursions over international vacations due to rising costs. This shift is leading to more spending at regional restaurants, attractions, and lodging, according to anecdotal evidence from business operators.
Factors contributing to the trend include higher airfares and gasoline prices, making extended or overseas travel more expensive. Some U.S. residents are also motivated to stay closer to home by events such as the FIFA World Cup and upcoming celebrations for the nation's 250th birthday. The American Automobile Association (AAA) estimated that 72.2 million Americans would travel at least 50 miles from home between late June and early July, a slight increase over the previous year, with most of the growth attributed to bus and train travel, while driving and flying numbers remain steady.
Tarik Dogru, an associate professor at Florida State University's Dedman College of Hospitality, suggests that a reduction in international travel could redirect vacation budgets towards local businesses. "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," Dogru stated. This trend, if sustained, could potentially narrow the U.S. travel and tourism trade deficit, which has been in place since 2020.
Families like Morgan Kain's in Baltimore are adjusting their summer plans due to financial considerations. "Things are crazy expensive, from travel costs to food costs to gas," Kain said, noting a reduction in trips compared to previous years.
Despite increased gasoline prices, AAA indicated that 85% of travelers during the Independence Day week were expected to drive, as car trips generally remain more economical than flights. In areas like Lake Tahoe, which spans California and Nevada, businesses have observed an increase in visitors driving from nearby West Coast cities. Ron Williams, owner of Tahoe Sports, reported a 10% increase in future bookings compared to the previous year, expressing pleasant surprise at business performance amidst economic concerns. He believes the local drive-up market is a significant factor.
Jerry Bindel, an area general director for Pyramid Global Hospitality managing rental properties in Lake Tahoe, also noted increased demand. He observed a rise in guests utilizing kitchens and barbecue grills for meal preparation, suggesting a trend of cost-conscious spending.
In Asheville, North Carolina, small businesses are experiencing a tourism rebound following damage from Hurricane Helene and subsequent flooding in September 2024. Aubrey Anderson, owner of an Asheville river tubing outfitter, rehired 50 workers for the current season after a significant staff reduction, citing an increase in visitors, including day-trippers from neighboring states. "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," Anderson commented.
Jael Skeffington, CEO of French Broad Chocolate, noted a surge in factory tours, with visitors frequently patronizing the on-site cafe and purchasing goods. "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.
Kansas City, Missouri, is also seeing a boost from tourism related to the FIFA World Cup. Keith Bradley, co-owner of Made in KC, a chain of cafes and shops, reported significant increases in foot traffic across all locations during the tournament, with World Cup merchandise proving popular. He observed that many visitors are from nearby Midwestern cities, such as Des Moines and Omaha, rather than farther-flung locations.
Mollie Lothman, co-owner of McLain’s Bakery, suggested that Kansas City's comparatively lower cost of food and lodging compared to larger host cities has made it an attractive destination for families attending the World Cup.