Allianz Partners USA’s latest Vacation Confidence Index finds that Americans plan to keep traveling in 2025 despite tighter household budgets, reshaping who goes and how trips are planned.
The survey reports that 3 in 4 Americans (75%) say an annual vacation is important, while financial constraints remain the top reason many skip time away.
A growing segment of “justi-vacationers” – people who travel even if they say they cannot afford it – is shaping demand: 51% say they can’t afford a vacation, yet 39% say they’re likely to travel anyway. Another 72% say they are in desperate need of a vacation.
Spending intentions point to continued activity. Americans are projected to spend $226.6 billion on summer vacations, with the average household expected to spend $2,867, up from $2,843 in 2024. Respondents indicate they are adjusting by shortening trips, shifting destinations, or tightening budgets to keep travel on the calendar.
Separate market data from Squaremouth show the average cost of spring travel reached $7,719 in 2024, up 11% from 2023, pointing to higher trip values and larger insurable amounts as travelers budget for flights, lodging, and prepaid activities. That dynamic can affect how buyers weigh cancellation coverage against lower-premium options when selecting policies.
Emily Hartman (pictured above), general manager at Allianz Partners USA, noted that while Americans remain passionate for travel, market conditions have led to many tough trade-offs, further highlighting how important travel insurance is.
“So much time goes into planning and budgeting for vacations, especially when there is increased uncertainty in the economic landscape. Travel insurance can be your stability through uncertain times by protecting your hard-earned travel investment from covered losses and situations before your trip begins and while you're traveling,” she said.
Claims experience has shifted alongside higher travel costs. In 2024, paid claims increased 18% year over year, and the average payout rose 37% to $2,609, with emergency medical benefits accounting for 27% of paid claims. The mix suggests more travelers are relying on policies for medical events and higher-cost disruptions, informing benefit limits and product design across the market.
Coverage use also remains concentrated in trip-related disruptions. More than 40% of paid claims in 2024 were tied to trips that were canceled or cut short, while travel delay claims rose 15% and the average delay payout increased 8%.
The pattern underscores ongoing demand for trip protection and delay benefits even as airlines and regulators pledge improvements, and it highlights the importance of understanding documentation and timing requirements.
Allianz Partners’ Index also shows a generational split. Among adults aged 55+, 33% cited cost as the reason for skipping vacation, while many pointed to other factors such as health concerns or lack of interest. The data suggests older travelers may be less exposed to immediate budget pressures than younger cohorts.
Cancel For Any Reason coverage carries distinct rules: travelers typically must purchase within 10-21 days of the initial trip payment, insure 100% of nonrefundable costs, and cancel at least 2–3 days before departure; reimbursements usually fall between 50% and 75% of covered trip costs. For travelers balancing uncertainty with budget, those parameters can determine whether CFAR is a fit or if standard cancellation benefits suffice.
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