The Vacation Spending Mindset and Ways to Offset It

The less often people travel, the more they tend to overspend when they finally get away. The vacation spending mindset is influenced by a lot of external factors, including marketing from some deep-pocketed international hotel chains. Step back and think like a contrarian traveler though and it doesn’t have to be that way.

“Yes, we’re very excited,” said the woman holding onto the cart with four large suitcases for two people. “This is our first real vacation in four years.”

Apparently they needed a lot more clothing than me for their trip to Los Cabos, a place that rarely dips below 75F degrees . But extra baggage fees weren’t the real tragedy. I did the math based on current flight prices and where they said they were staying and figured their rare vacation was probably costing them at least $5,000, probably far more.

“We get together with our old friends every four years at some beach resort area. We always say we’re going to do go somewhere else on our own in between, but there’s always something else we need to spend our money on. So it never seems to happen. Thankfully this one is scheduled so it makes us get out of the house and take off.”

Good lord. I was just eavesdropping on this conversation while in the customs line at the airport, so I didn’t bust in, but I had so many questions I would love to ask. Like what are you spending all your money on that you can only take a vacation every four years? Why can’t you just take a shorter one every year within driving distance? Or go to another destination that is a fraction of the price of Los Cabos?

What do you do with all that saved-up vacation time from your job? Sit around the house and watch TV?

Depending on which study you look at the average vacationing American couple spends between $3,800 and $5,200 and most of these vacations are a week or less. To me that seems like a staggering amount of money. Most of those average couples could take two or three vacations with that amount if they were just more savvy about finding great travel deals and optimizing their choices. Even just looking at standard vacation packages there are much better values than that out there.

More Travel on a Small Budget

No person who really loves to travel would wait four years to get away. As I’ve traveled around the world, I’ve met people who have very modest salaries who are spending weeks on the road. I’ve met bartenders, social workers, and teachers who have been to dozens of countries. The thing is, they’re not staying at this place:

I do stay at places like that as part of my travel writing job sometimes, on someone else’s tab, but there have only been a few times I’ve opened up the wallet to pay for them. Like most contrarian travelers, I know how to use a calculator and I know better than to follow the herds.

I don’t assume that the way “most people” travel is the smart way to go. If a million people are willing to pay $600 a night for a hotel somewhere (in Los Cabos that won’t even be a luxury place), then I’m going to cash in points or find the spot where I can get a similar experience for $150 a night or less instead.

Those hotels are not hard to find. They may not have six pools with a swim-up bar and a room that’s bigger than your apartment, but they’ll be quite nice if you are in the right destination. In the World’s Cheapest Destinations book I’ve outlined plenty of places where that’s actually at the high end of the scale. Even in next-door Mexico I’ve often paid under $50 for a comfortable hotel room with a private bath, daily maid service, and air conditioning. This was my $36 one in Playa del Carmen and it had a swimming pool:

Speaking of Mexico, choosing Mazatlan or Puerto Escondido is going to chop your beach vacation budget in half compared to the top resort areas. Head into the interior and your budget can drop by another third or half. Head down to Guatemala or Honduras and it’ll drop again. Ease up on the star level of your hotel and the next thing you know, that $5,000 will last two people a month or more of travel instead of six nights getting sunburned and paying for overpriced excursion tours.

Hey, I do get the appeal if you just want to lay around and de-stress for a while. I’ve spent my own money on an all-inclusive resort that will make the family happy. Plus when I twice won stays at those kinds of resorts in Puerto Vallarta and Ixtapa from travel writing contests, I was happy to accept. We had a blast and few things make me happier than a non-stop open bar.

But if I had to wait four years to take a vacation just to get that kind of walled-off experience? No thanks. I’d rather take off eight times and ratchet back the marble and infinity pools. Savvy travelers have a different mindset and a willingness to get away no matter what.

Even in the USA and Canada, there are plenty of seaside vacation spots that won’t break the bank. But if you factor in the whole cost of everything, it might be cheaper to leave your home country for a summer beach getaway, even when factoring in the airfare.

You don’t have to go where everyone else is going, stay at the chain hotels most people are staying in, or eat at the kind of restaurants they’re eating in. Or take a cruise with thousands of other vacationers. Even if that is what the travel industry would like you to do.

Pay the Vacation Machine When You Have to—Sparingly

I’m not here to judge on the traveler vs. vacationer division as I’ve been in both camps quite a lot. At times I’ve had all the time in the world and nobody but myself to worry about. But more often I’m traveling with another person or two.

Things do tend to change when you add a kid or two to the equation. I used to live in Tampa, right down the road from Orlando, so I got to regularly see what the occasional vacationers were overspending on, everything from parking to overpriced hotels to $12 ice creams. It’s not pretty.

For the $22 we spent on two jammed-full lockers at a water park there 10 years ago, we could have eaten two good meals, taken 10 taxi rides, or gotten two or three one-hour massages in other countries. For what those lockers cost, one person can enter some of the great wonders of the world.

For what a beer costs at your average luxury hotel in the USA, you could get legless with four or five pints in Siem Reap or Ho Chi Minh City. For what you spend on parking alone at the Gaylord Opryland Hotel in Nashville, you could get three restaurant meals in Ecuador. The dreaded “resort fee” in Las Vegas will often be more than a hotel room near the beach in Thailand.

If you’ve been around the world, you’re used to traveler prices. If you only go on vacation for a week or two once a year, you’re used to tourist prices. That’s why most of your relatives think travel has to be expensive. It can be—especially if you’re headed to one of the most popular foreign destinations for Americans—but not if you’re taking your time exploring The World’s Cheapest Destinations.

The Vacation Splurge Can Be Worth It If You’ve Got It

It’s not that one camp is smart and one is stupid though when it comes to vacation budgets. They’re two different worlds. Sometimes they intersect in the town square, like in Budapest or Cusco. Many in one camp could never dream of being in the other, but in that case both can be just as happy because they don’t even want to be on the other side.

The rare traveler often wouldn’t dream of staying in a hotel that doesn’t have a Hilton or Marriott logo on it. The frequent traveler thinks those places are a waste of money. In some places they’re all getting a bargain regardless, like in Southeast Asia.

In some ways this is a “life phase” transition though. When you’re making the big bucks and have more money than time, you tend to value to former less and the latter more. If you’re poor but have plenty of time, you’re willing to sacrifice comfort more to see more.

But still, if you can only take one vacation every four years? You might want to take some quiet time to evaluate your priorities. The contrarian travelers find a way to hit the road often because they find the time and the money by traveling smart.

I’ve written a lot on this Cheapest Destinations Blog about how to travel better for less, but here are a few quick tips that will make a huge difference in your vacation budget:

1) Let the deals guide your destination. First find the great flight deal, the great vacation package deal, or the place you can cash in hotel credit card points. Use that to guide you to where you’re going.

2) Invest a little time in research beyond Google and ChatGPT. Dig a little deeper on options and go a little wider on hotel/resort choices, especially beyond the chain hotels.

3) Take advantage of local freebies, Groupon deals, and other promotions. You don’t have to book the $250 excursion just because you’re seeing all the infrequent vacationers book it. You can probably do better.

4) Play the travel hacking points and miles game with your credit card spending. If you don’t you’re really losing out.

How about you? How have you kept your vacation spending in check so you could get away more often?