Americans Embrace Road Trips as Economic Fears Discourage Flying

The American road trip has become more than just nostalgia—it’s an economic statement. In 2025, 9 out of 10 holiday travelers are choosing the open highway over the sky, a shift fueled by rising inflation, stagnant wages, and a growing preference for budget-friendly, flexible travel. While airlines have rebounded strongly, the dominance of road trips underscores a deeper truth: the U.S. travel economy is bifurcating, with implications for investors in everything from automotive stocks to airline shares.

The Road Less Expensive
The road trip boom is a direct response to economic anxiety. In 2024, 44% of travelers opted for destinations within driving distance to cut costs, while gas prices—though 14% higher than 2019 levels—remain manageable compared to pre-pandemic peak anxiety. The average American spent $4,600 on three domestic trips last year, prioritizing microcations (3–4 day trips) and “slow travel” that maximizes paid time off. Florida’s tourism industry, for instance, generated $131 billion in 2024, largely driven by road-trip-friendly destinations like Orlando.

Meanwhile, airlines face a paradox: passenger numbers are surging, but profitability remains fragile. Domestic flights in 2024 nearly matched 2019 levels, and TSA screenings hit 39 million during Thanksgiving—a record. Yet show prices remain 3–10% below pre-pandemic levels when adjusted for inflation. Airlines are pinched between rising fuel costs and price-sensitive consumers.

Investment Crossroads: Roads vs. Runways
For investors, the divide between road and air travel creates clear opportunities—and risks.

• Automotive Sector: Car manufacturers and rental companies are beneficiaries of the road-trip boom. reveals a stark divergence: Ford (F) has outperformed Delta (DAL) by 25% since 2023, capitalizing on demand for fuel-efficient vehicles and family-friendly SUVs. Rental car giants like Hertz (HTZ) also see tailwinds, with microcations driving short-term rentals.
• Hotels and Lodging: Budget-friendly options thrive. Extended-stay hotels and vacation rentals—already up 22% in prices since 2019—are ideal for road-trippers seeking affordability. Brands like Marriott’s AC Hotels or Airbnb’s flexible stays could outperform luxury chains.
• Airlines: While passenger counts are up, profitability hinges on cost discipline. Airlines like Southwest (LUV), which focuses on domestic routes, may fare better than international-focused carriers. However, show margins squeezed to 7%, down from 12% in 2019.

The Economic Domino Effect
The road-trip surge isn’t just about leisure—it’s an engine of economic activity. In 2024, domestic travel spending hit $1.3 trillion, with road trips contributing disproportionately to local economies through fuel purchases, restaurants, and attractions. Meanwhile, the $2.8 trillion total travel industry supports 15 million U.S. jobs and generates $180 billion in tax revenue.

But the sector isn’t without vulnerabilities. The U.S. travel trade deficit widened to $2.3 billion in 2024 as outbound spending outpaced inbound tourism recovery. This reflects a global preference for U.S. travelers to explore Mexico, Canada, and Europe—destinations that may strain airline balance sheets further.

Conclusion: The Road Ahead for Investors
The road trip renaissance and airline struggles highlight a clear investment thesis: bet on sectors that cater to cost-conscious travelers, not those relying on discretionary spending. Automotive stocks, budget lodging, and fuel suppliers (like Exxon Mobil (XOM)) are poised to gain. Airlines, however, face a longer climb, needing both pricing power and operational efficiency to sustain growth.

Consider this: the average American road trip spends $4,600 annually, but 70% plan to maintain or increase travel in 2025. With domestic travel projected to hit $3.1 trillion by 2034, the highway isn’t just a path—it’s a financial artery. For investors, the message is clear: follow the road, not the sky.