Flights, hotels, and rental cars are less expensive this Labor Day compared with last year, but many Americans are still scaling back their holiday plans.

A survey of 1,000 U.S. adults for Retrospec’s Labor Day Report found that rising living costs and inflation are pushing 20% of Americans to cut back, cancel or shorten their trips. Nearly one in five said they’ll drive instead of fly to save money, while 18% plan to trim their itineraries. Fourteen percent are skipping dining out or ticketed events, 11% are passing on hotel or Airbnb stays, and 10% won’t host a party or barbecue.

The report also found 7% aren’t celebrating the holiday at all, and 17% plan to work instead to earn extra income. About two-thirds of respondents said they’re capping holiday expenses at $500, including travel, food, and activities.

Travelers are leaning heavily on road trips this year, with 64% planning to drive, compared to 13% who plan to fly and 7% who plan to take trains. AAA said many are choosing closer destinations, such as beaches and national parks, which is helped by the lowest Labor Day gas prices since 2021. The national average price for regular gas is $3.17 a gallon, down from $3.33 last year.

AAA advises motorists to avoid peak traffic times, which include Thursday afternoon and evening, Friday from midday to evening, Saturday late morning, Sunday afternoon, and Monday from mid-afternoon. The lightest travel windows are early mornings or before noon.

For those flying, the Transportation Department reports that Thursday and Friday are the most challenging travel days, with the lowest on-time flight rates of 79% and 76%, respectively. Sunday is the best day to fly, with 86% of flights arriving on schedule.

AAA estimates domestic round-trip flights now average $720 — about 6% cheaper than last year. Hotel rates are down 11% and car rentals 3% lower. International travelers, however, face mixed costs: hotel stays are 2% cheaper, but airfare is up 8%.

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