American travelers are spending more than ever before on travel, with average trip costs surpassing $7,250 in Q1 of 2026. According to a recent Travel Trends Report published by Squaremouth, a leading travel insurance marketplace, this finding marks a 3.6 percent increase from the same period last year and the highest level of traveler spending recorded in the company’s 23-year history. Based on current market conditions, experts at Squaremouth say there is little reason to expect costs to ease anytime soon.
The increase could be linked to long-term industry trends and ongoing economic challenges, including inflation, global uncertainty, and higher demand for premium or luxury travel experiences.
Travel Costs Continue a Long-Term Climb
- Travel costs have increased 23 percent over the last 10 years, with no signs of slowing down.
- What was once considered luxury travel, including safaris, expedition cruises, and bucket-list destinations, has become mainstream.
- Today’s travelers are prioritizing bigger, more experience-driven trips, and that shift is a significant driver of the rise in average trip costs.
The Global Fuel Crisis Continues to Add to the Situation
- Ongoing global and economic factors are contributing to rising travel costs, particularly through jet fuel prices linked to recent oil supply disruptions due to the Iran War.
- In response, major airlines have been consistently raising fares, reducing flight capacity, and in some cases, increasing checked baggage fees.
- Analysts expect continued upward pressure on airfares through at least the end of summer.
More Travelers Want Flexibility, Few Actually Secure It
- Squaremouth’s data shows travelers are responding to the environment, just not always in the ways that protect them most.
- Demand for Cancel For Any Reason (CFAR), the only travel insurance benefit that covers cancellations excluded by standard policies, including those triggered by geopolitical events, rose 29 percent in Q1 2026.
- However, 53 percent of travelers who searched for CFAR didn’t actually end up purchasing it, with the vast majority having already missed the eligibility window by the time they started looking. CFAR must be purchased within 10 to 21 days of the initial trip deposit.
- More broadly, 34 percentof travelers who secured travel insurance in Q1 skipped standard Trip Cancellation coverage entirely, leaving more than $7,000 in average trip costs completely unprotected.
“We’re seeing a gap between how travelers feel about the growing risks and how they actually protect their trips,” said Jackie Mondelli, chief marketing officer at Squaremouth. “Despite record trip costs and rising uncertainty, many travelers aren’t choosing the right or enough coverage to protect themselves.”
“This suggests that while travelers want more flexibility, things like timing, price concerns, or a general lack of understanding about their existing coverage continue to influence how they protect their trips.”
The full Q1 2026 Travel Insurance Trends Report is available here.
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