The hotel industry has spent decades perfecting the loyalty program, the turndown service, and the complimentary breakfast buffet for you. None of that seems to be working for younger travelers, who are increasingly walking away from traditional hotels in growing numbers every year.
A new NerdWallet survey just revealed a clear generational split in how Americans choose their lodging, and the findings should worry every hotel executive. The shift goes deeper than sticker shock, touching on how younger generations travel, who they travel with, and what they value in a stay.
If you are planning a trip this summer, these numbers could change the way you think about booking your next accommodation entirely.
More than half of Americans now prefer vacation rentals over hotels
About 51% of Americans said they would rather stay in a vacation rental than a hotel if given the choice while traveling, according to the February NerdWallet survey conducted by The Harris Poll. That slim majority tells only part of the story, because the generational breakdown reveals a much sharper divide between older and younger travelers.
The preference for vacation rentals declines steadily across generations, with younger Americans far more likely to skip hotels entirely. Gen Z and millennials are driving the shift, while baby boomers remain the most loyal hotel customers, according to the survey results.
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Gen Z and millennials are driving the shift, while baby boomers remain the most loyal hotel customers, according to the survey results.
This is not just a passing trend driven by one viral TikTok video about a charming Airbnb cabin in the mountains somewhere. The global vacation rental market was valued at roughly $174.84 billion in 2025 and is projected to reach $195.45 billion in 2026, Fortune Business Insights reported.
Gen Z and millennials are traveling more without their parents
Younger travelers are not just choosing different places to sleep; they are taking fundamentally different kinds of trips than older generations do. Gen Z and millennials are more likely to travel with friends, go solo, or attend events such as concerts and weddings this summer.
Gen Z respondents were the most likely age group to say they would travel for a bachelor or bachelorette party this summer season. These group-oriented trips naturally favor vacation rentals that offer shared kitchens, living rooms, and multiple bedrooms under one roof, the survey found.
Group travel favors rentals over hotel rooms
When six friends split the cost of a four-bedroom beach house, the per-person cost often drops below what a single hotel room would charge. Hotels simply cannot compete on that math for group trips, because you are paying per room rather than per property with rentals.
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The shared-space factor matters just as much as the cost savings for many younger travelers who want to cook together and hang out. Traditional hotel rooms were designed for couples or solo business travelers, not for groups of friends splitting a bachelor party weekend somewhere.
Parents with young children much prefer rentals over hotel stays
The generational shift gets an extra boost from families with kids, as parents of children under 18 prefer vacation rentals at a rate of 65%. That number drops sharply to 45% among adults without children under 18 living at home, the NerdWallet survey found.
The appeal to parents is straightforward when you consider what traveling with young children requires of your lodging setup. You want a kitchen to prepare snacks, a living room where kids can play, and walls between rooms so everyone can sleep.
Hotels struggle to match the family-friendly flexibility of a rental home
Hotel suites can offer some of these features, but they typically cost two or three times as much as a standard room per night. A vacation rental with two bedrooms and a full kitchen often costs less than a single hotel suite in the same destination neighborhood.
The noise factor also matters considerably, because parents with young children worry about disturbing other hotel guests during late-night crying sessions. A standalone rental property removes that anxiety entirely and gives families more freedom to relax on their own schedule.
Price alone does not explain the hotel-versus-rental decision for most travelers
You might assume vacation rentals win purely on cost, but the pricing comparison between hotels and rentals is more complicated than that. Hotels are actually cheaper than comparable one-bedroom Airbnb rentals in 38 out of 50 popular travel destinations worldwide.
“For many travelers, vacation math can hit differently… In the moment, it might just be $200 more for an ocean view or $40 extra for that seat upgrade, but multiplied across all the meals, tours, and transit over a week or two, your vacation budget can easily balloon,” Smart Travel Podcast host Sally French told NerdWallet. “The trick is planning a trip that feels meaningful without the debt.”
Hotels also offer loyalty programs with free nights, room upgrades, and the ability to pay with points earned through co-branded credit cards. Vacation rentals lack those systematic reward structures, though splitting costs among a group can close that gap very quickly in practice.
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Summer 2026 travel spending is surging
About 45% of Americans plan to take a summer vacation in 2026, and the average expected cost for flights and lodging comes to $3,940 per person.
That translates to more than 120 million travelers spending over $475 billion on summer travel alone, NerdWallet’s 2026 Summer Travel Report estimated.
Younger travelers would rather skip a vacation than book budget lodging
About 42% of Americans say they would rather skip a vacation entirely than book budget airfare and lodging for their summer trip plans. That all-or-nothing mentality is even stronger among younger travelers who grew up with Instagram-worthy travel expectations and curated travel content.
Half of Gen Z respondents and 47% of millennials would rather stay home than settle for budget accommodations, compared to just 36% of boomers. This partly explains why younger travelers gravitate toward rentals that feel unique and personal rather than generic hotel rooms.
How to save money on lodging this summer, regardless of which option you pick
Whether you choose a hotel or a vacation rental this summer, there are practical strategies to lower your total lodging costs. About 32% of 2026 summer travelers plan to use credit card points or miles to cover expenses, the NerdWallet survey found.
Smart strategies for hotel bookings
- Sign up for hotel loyalty programs before your trip, because even entry-level members often get discounted rates and free perks.
- Use a co-branded hotel credit card to earn points that can cover free nights, room upgrades, or late checkout during your stay.
- Book directly through the hotel’s website rather than third-party sites, since hotels typically offer best-price guarantees only on direct bookings.
- Travel midweek instead of weekends when hotel occupancy is lower, which often means significantly reduced nightly rates for you.
Smart strategies for vacation rental bookings
- Split the cost among your travel group to bring the per-person price below what individual hotel rooms would cost.
- Book well in advance for peak summer dates, since rental prices tend to surge as availability drops closer to your travel dates.
- Look for properties with full kitchens so you can cook meals instead of eating out for every breakfast, lunch, and dinner on vacation.
- Check the total price, including cleaning fees, service fees, and taxes, before committing, because those extras can add 20% or more to the bill.
Half of Americans say travel rewards programs are complicated
Hotels still hold one massive advantage over vacation rentals through their loyalty programs, but most Americans are not taking full advantage of them. About 48% of Americans say travel points and miles programs are too complicated to navigate effectively, according to the NerdWallet travel report.
That complexity gap represents a real opportunity for you if you are willing to invest a few hours learning how your preferred hotel program works. Understanding how to maximize points can turn a $200-per-night hotel stay into a free one, potentially saving you thousands over a lifetime of travel.
The loyalty gap gives hotels a path to win younger travelers back
Hotel chains that simplify their rewards programs and market them effectively to Gen Z and millennial travelers could recapture some of this demographic shift. The challenge is that younger travelers often prioritize unique experiences over brand consistency, which plays to vacation rental strengths.
Travel does not have to be luxury to be impactful, and no vacation should follow you home as credit card debt on your monthly statement. Before committing to any reservations, decide what actually matters most to you about the trip, French Sally French, a NerdWallet travel expert, advised.
What this generational shift means for your next booking decision this summer
The data point to a travel market that is splitting along clear demographic lines, with younger travelers and families increasingly choosing vacation rentals. Hotels are not disappearing, but their grip on the accommodation market is loosening as alternatives become more accessible and affordable.
Your best move is to evaluate each trip on its own merits rather than defaulting to one lodging type out of habit or loyalty alone. A solo business trip might still call for a hotel, while a friend group beach weekend might be perfectly suited to a rental house.
The key is matching your accommodation to the specific type of trip you are taking, the people you are traveling with, and your budget. With summer 2026 travel spending projected at nearly $4,000 per person, making the right lodging choice could save you hundreds of dollars.
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