Fuel Prices Force Americans to Cut Back Memorial Day Travel

Millions of Americans are hitting the road and taking to the skies this Memorial Day weekend, but soaring fuel prices — driven by the ongoing Iran war — are forcing many to rethink their plans. With the national average for a gallon of regular gas at $4.51, up $1.32 from a year ago, travelers are swapping international vacations for local getaways, shortening their stays, and finding creative ways to cut costs, according to AP News.

Record Travel, Reshuffled Plans

AAA projects that 45 million Americans will travel at least 50 miles from home over the holiday weekend — a record number. The Transportation Security Administration expects to screen 18.3 million passengers. Yet beneath the surface of strong aggregate demand lies a significant shift in how Americans are traveling.

“Generally, it’s certainly more of a demand reshuffling than a demand softening,” David Tinsley, a senior economist at the Bank of America Institute, told AP News.

Stephanie Bernaba, a 47-year-old mother of three from Rhode Island, exemplifies this trend. Her family has traded long summer stays in Florida and annual Disney World visits for local beaches, bike rides, and hiking trails. “I’ve been trying to do more of that because one, it’s quality time. Two, it’s fresh air. And three, we’re not spending an arm and a leg,” she said.

The Iran War Connection

The root cause of the price surge is the 2026 Iran war, which began on February 28 when the United States and Israel launched airstrikes on Iran. In retaliation, Iran effectively closed the Strait of Hormuz — a narrow waterway through which approximately 20% of the world’s oil supply passes, according to Wikipedia. The resulting supply disruption has kept oil prices above $90 per barrel and sent retail gasoline prices to their highest level since 2022.

The Institute on Taxation and Economic Policy (ITEP) estimates that Americans will collectively spend an extra $3.5 billion on gasoline over the Memorial Day holiday weekend alone. The average U.S. household has already paid an additional $291 for gas since the war began, with projections of $1,450 by year’s end if current conditions persist.

Broader Cost Pressures

The pain at the pump is just one piece of a larger affordability puzzle. The latest consumer price index showed airfares were 20.7% higher in April 2026 compared to a year earlier. Lodging costs rose 4.3%, and dining out became 3.6% more expensive. AAA reported that California drivers face the highest prices at $6.14 per gallon, while Mississippi residents pay the least at $4.01.

Jim Wang, a personal finance blogger from Maryland, originally planned to take his family of six to Spain for a solar eclipse. After calculating the costs — thousands in airfare, multiple connecting flights, and a car rental — he opted for Lake Tahoe instead, where they can stay at a relative’s cabin for free. “We’re still going to travel. It’ll just be different,” Wang said. “The vacations are no longer as grand for the adults. But for our kids, it’s still exciting.”

K-Shaped Travel Economy

Analysts describe the current travel landscape as “K-shaped,” with higher-income households continuing to spend while lower-income families pull back or opt out entirely. Bank of America reported that lower-income households were significantly more likely to have no summer travel plans this year. New polling from Quinnipiac University found that 48% of registered voters have cut back on vacation spending, 54% have reduced dining out, and 36% have curbed their driving.

Nancy McGehee, a hospitality professor at Virginia Tech, described the shift as a move toward “quality over quantity.” “What we’re seeing is people are saying, ‘Alright, we can’t do that big splashy trip we wanted to do, but what else can we do?’” she said.

Political Fallout

The economic strain is taking a political toll. President Donald Trump’s approval rating on the economy fell to 33% in the May 20 Quinnipiac poll — the lowest of either of his terms. A majority of voters (55%) blame Trump “a lot” for rising gas prices. Trump has signaled that a deal with Iran to reopen the Strait of Hormuz is “largely negotiated,” but analysts caution that markets have seen failed negotiations before, as Business Insider reported.

What to Watch

While oil futures dropped sharply after Trump’s announcement of a potential deal, retail gasoline prices typically lag behind crude oil moves. Even if the Strait of Hormuz reopens, it could take weeks for lower wholesale costs to reach the pump. For now, Americans are adapting to a new reality of more expensive travel — one that experts say could persist through the summer and beyond.

“Americans were already struggling with the high cost of living before this war started,” said Carl Davis, research director at ITEP. “The fact that their summer travel plans just got a whole lot more expensive isn’t going to help with that.”