Labor Day travelers are facing higher costs for flights and hotels as they head out for the final holiday weekend of summer, according to AAA and travel expert Pauline Frommer.
AAA booking data shows domestic airfare is up 2% compared with last year, averaging $750 for a round-trip ticket. Fares to the holiday weekend’s most popular domestic destinations are nearly 20% higher, averaging $790.
Hotel prices are also rising, with domestic bookings up 9% and international hotel bookings up 12% compared with last Labor Day weekend, according to AAA.
"We are seeing prices ticking up for airfares most definitely, but also for hotels, for rental cars, for cruise ships," Pauline Frommer, publisher of Frommer's Travel Guides, told FOX Business.
Frommer said higher fuel prices tied to the war in Iran are one factor.
Current market trends suggest drivers could pay more for gas this Labor Day weekend than they did a year ago, according to AAA.
Frommer also said airlines, hotels and other travel companies are increasingly using artificial intelligence (AI) to better predict how much customers are willing to pay.
"Everyone is using this new technology to better understand or to better test what they think the customer will pay," she said.
Seattle, Orlando, Boston, Denver and New York are AAA’s top domestic destinations for Labor Day weekend, while Rome, Vancouver, London, Dublin and Paris lead its international list of destinations.
However, not every travel category is more expensive.
AAA said international airfare is down 4% year over year. Cruises departing from U.S. ports are 4% cheaper, averaging $2,700 per booking, according to AAA.
For travelers with flexibility beyond the holiday weekend, Frommer said the most reliable way to cut costs is to travel during off-peak periods.
"The best way to save money is always to travel when nobody else is," she said. "The first two weeks in December is one of the cheapest times of the year to travel almost anywhere."
She also said some travelers may be able to find lower fares by clearing their cookies and using a virtual private network (VPN) to conceal their browsing history while booking online.
Frommer added that travelers can also save by choosing destinations with a lower overall cost of living.
"Usually, if the cost of living is lower in the destination you're thinking of visiting, the cost of travel will be lower, too," she said.
