I’ve only been to two cheap destinations: Romania and Taiwan.
I’ve been to three expensive destinations: French Riviera, Iceland, and New York (I, II, III).
There’s one rule and one heuristic I use when choosing where to travel:
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Rule 1: Does it pass the Do-I-Actually-Want-To-Go-Here test? If it fails, find another place (duh!).
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Heuristic 1: When in doubt about where to go, choose the place that’s cheap.
That’s it. Rule 1 removes all irrelevant questions that come after and Heuristic 1 helps to pare down the choices when the decision is difficult.
I’d argue a lot of people travel to get away from their everyday life and experience something new, and since most people don’t live like kings, living like a king would be something new and a reason why people travel. QED.
Traveling to a cheap destination (CD) unlocks purchasing power that you can’t get anywhere else. Sure, you can splurge on a nice dinner in your home city, but it sure doesn’t feel the same as eating the same quality of food for a fraction of the price while traveling.
Everything is more accessible when traveling to a CD. A few examples:
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Food: A delicious, full meal in Taiwan cost about $3 if you know the right spots, whereas the equivalent in New York costs upwards of $20.
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Lodging: Five-star hotels are now accessible. While paid amenities within the hotel may be more expensive than expected, the free ones remain nice.
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Experiences: Intra-country travel (taxi, subway, trains) are cheap. You can do fun things—massages, tours, etc—for cheap.
The other side of your coin is depressing: you (probably) live a quality of life worse than that of your home when going to expensive destinations, because, well, everything is more expensive! Combine that with constantly questioning if you should buy this or that because of how expensive it is and that makes for a not-great vacation. This worry is eliminated when traveling to cheap destinations!
Markets give us a lot of information, but they’re flawed in the sense that they rely on taste and not everyone has the same taste (or good taste).
Taiwan was cheap, but freaking awesome. Romania was cheap, but freaking awesome. Iceland was expensive and pretty awesome. The French Riviera was expensive and pretty awesome.
So why are cheap destinations cheap? Wouldn’t market forces cause them to become more expensive? Not necessarily, for a few reasons:
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Status: Expensive places—Iceland, French Riviera, etc—are often high status; cheap places are often low status. People who don’t care about status games are few in number and more willing to go to cheap destinations.
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Mindset: If you’re sufficiently open-minded and curious, then where you go mostly won’t matter because anything can be interesting. People who are that open-minded and curious are few in number and more willing to go to “boring” destinations.
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Cost: It can cost more to get to these destinations, turning off potential visitors who may assume the cost on the ground is similar to the flight price, thus forcing prices on the ground to stay low to counteract the expensive flights and attract more visitors who are able to look past the large upfront cost.