When the economy gets rough, the first things people cut from their spending are non-essentials. Spending money on vacations clearly falls into that category, but if you believe the press releases that the tourism industry is pumping out, people are ready to skimp on other expenses so they can keep travelling.
JustFly, an online travel agency that is one of the brands of Montreal-based FlightHub, surveyed American consumers and found that 61 per cent tightened their budgets in order to afford a vacation while 37 per cent even went into debt to pay for their travels.
“As the holiday season approaches and consumer cost of living increases continue to outpace wage growth, putting a continued financial strain on U.S. families, a new survey reveals that Americans are prioritizing their travels at the expense of curbing spending on other important purchases,” stated the release announcing those results.
Another release from international remittance company Wise stated that Canadians are also continuing to prioritize travel this holiday season even though their numbers showed that 55 per cent of the people they surveyed are concerned about their finances this holiday season. According to their survey, it was actually a minority (25 per cent) of them who were prioritizing international vacations with another 13 per cent planning to visit friends and family abroad. It was even lower for Gen Z and younger millennials with only 17 per cent planning to travel internationally this holiday season.
A Harris poll of American travellers conducted for Intrepid Travel yielded similar results. Most people expect they will have less money to spend on non-essential activities in 2024 according to their survey. Only about 1 in 4 (26%) plan to travel more than they did this year although the survey did say that 57% plan to travel the same amount next year as they did this year. What’s not really specified is how much they travelled in 2023. Intrepid chose to be more positive about the results.
“Our survey found that only 17% of U.S. adults plan to travel less in 2024,” said Matt Berna, Intrepid Travel President, The Americas in the release. “What we are seeing is that consumers are not canceling their trips, but they are travelling smarter. They are investing in travel experiences where they get the most for their money while putting safety first.”
In a November interview with CNBC, TripAdvisor CEO Matt Goldberg says the trend to cut expenses in order to prioritize travel is real.
“Americans are prioritizing experience spend above all others,” he said, stating that 95 per cent of people are doing just that, although not explaining where that surprisingly high number comes from.
He said that two thirds of Americans are planning on travelling this winter, although only about 30 per cent of them are taking vacations abroad. Even with economic uncertainty, they’re ready to spend, he said.
“They will put travel at the top and will save in order to do so.”
Of course, for a certain segment of the population, cutting costs in order to travel isn’t even on their radar. Witness the superyacht market which reached $10.2 billion dollars last year and is expected to more than double in a decade to $25.6 billion.