The news: With the unofficial kickoff to summer just days away, demand for trips is holding up despite rising costs.

• AAA projects about 45 million Americans will travel at least 50 miles from home between May 21 and May 25, setting a Memorial Day weekend record.
• 39.1 million Americans will travel by car over Memorial Day weekend, per AAA, accounting for 87% of holiday travelers.
• United Airlines said it expects 53 million travelers from June to August, about 3 million more than last year.
• Allianz found that 70% of Americans plan to travel this summer, with 85% saying they desperately need a vacation.
• Airlines Reporting Corporation said April air ticket sales topped $10 billion, up 15% YoY.

Why it matters: This summer, expenses will be higher across the major categories of travel. Travel prices were up 7.8% YoY in April as energy cost increases tied to the Iran war weighed on the economy, per the US Travel Association’s Travel Price Index.

• Motor fuel surged 29.1% YoY.
• Airline fares increased 20.7% YoY.
• Hotel and motel prices increased 4.3% YoY.
• Food and beverage costs away from home rose 3.6% YoY.

Rather than giving up vacations, many consumers are trading down. KPMG found travelers are adjusting their plans to make summer trips fit their budgets: 38% are opting for cheaper alternatives where possible, and 69% plan to stay in the US. The share of consumers with international travel plans fell from 28% last year to 21%.

Implications for the travel industry: Airlines are poised to benefit from steady demand, but higher fuel costs could pressure margins, and fare increases could alienate consumers. Hotels' gains may be limited as travelers choose shorter stays and cheaper accommodations.

Retailers in leisure destinations may benefit from strong foot traffic, but spending may be more cautious as consumers devote more of their budgets to transportation and lodging. Flexible pricing and value-oriented promotions may help draw cost-conscious travelers, especially those more inclined to take domestic trips.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.