Travel Will be More Expensive in 2025
Travel Insurance
Travel may cost more than ever before.
In 2024, Americans took more trips and vacationed for longer. From flights and hotels to destination taxes, travelers are now paying more, and this trend is expected to continue, into 2025.
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Those headed to London or Dubai may see a rise of 7%.
Australians could get hit the hardest with prices Down Under forecast to increase by as much as 14%.1
Here’s what’s affecting travel costs in 2025:
Lodging. Hotel costs have soared 10% since 2019 as a result of both increased demand and inflation.2 Demand for hotels has soared as Maui, Atlanta, and New York City all put restrictions on Airbnb hosts that effectively reduce the number of rentals available. Higher operating costs caused by hotel staff shortages and rising energy prices have also resulted in higher prices for travelers. Experts predict that hotel rates will continue to rise in 2025, but the good news is that they are expected to level out due to a record number of new properties being built worldwide.
Airfare. In recent years, a lack of aircraft has impacted airlines, with customer demand outpacing supply. According to a report from online booking platform Kayak, the best deals for 2025 will be to the Caribbean, with airfare prices currently trending down by an average 17% compared to 2024. Flights to Asia are also at their cheapest levels in three years, down 7% on average from 2024. Fares to other destinations should also reduce as airlines add capacity to meet demand, with a record number of airline seats to Europe expected during 2025.3
Taxes and Fees: The United Kingdom now requires travelers to obtain a new electronic travel authorization to enter the country. The following cities recently added or increased tourist taxes and entry fees: Amsterdam, Barcelona, Venice, and Bali. Popular tourist hot spots have also increased entry fees in response to increased demand. For example, Galapagos National Park doubled its entry fee from $100 to $200 per person.4
With travel costs on the rise, it’s more important than ever to protect your trip investment with travel insurance. It covers a wide spectrum of issues that can go wrong—before and during your trip. Learn more about protecting your trip.
1 Zach Wichter, “Pack your swimsuit: Flights to the Caribbean are the cheapest in years,” USAToday.com, December 2024.
2 “2025 Travel Trends,” ThePointsGuy.com, accessed December 2024.
3 “Pack your swimsuit: Flights to the Caribbean are the cheapest in years.”
4 Shane Nelson, “The Top Travel Trends for 2025,” travelagewest.com, November 2024.
