Travel spending among American households has shown a significant increase compared to pre-pandemic levels, with a particular enthusiasm for international trips. According to Bank of America research, travel spending is still down from 2023 but remains significantly higher than in 2019, showing a 10.6% increase per household. The data collected from January to mid-August using Bank of America credit and debit cards highlights a trend towards vacationing abroad as a key driver of travel momentum.
Continued Strength in International Travel
International travel has emerged as an area of continued strength, with a notable increase in the number of Americans intending to vacation abroad in the next six months. A recent Conference Board survey revealed that about 17% of Americans expressed their desire to travel internationally, up from around 14% in 2018 and 2019. This increase in demand for international travel can be attributed to the waning of Covid-19-related health concerns and the relaxation of pandemic-era travel restrictions in various countries.
Falling prices for international airfare have further fueled the demand for international travel. The availability of lower airfares has enticed travelers to explore international destinations more than ever before. For instance, average round-trip fares to popular European destinations have decreased to approximately $950 this summer from over $1,000 in previous years. The decrease in airfare prices, coupled with pent-up wanderlust and accumulated savings, has prompted Americans to travel internationally with zeal.
Shifts in Travel Destinations
European destinations have been the primary focus of American travelers, accounting for 43% of spending from May to July. Canada and Mexico followed closely behind, holding the second spot with 21% of total spending. Surprisingly, spending on travel to Asia saw the fastest growth, increasing by 11% compared to previous years. Advantages in exchange rates have contributed to the attractiveness of Asian destinations for American travelers.
Despite the surge in international travel spending, a majority of American trips still remain within the country’s borders. Around 68% of trips originating in the U.S. are domestic, indicating a preference for local travel experiences. However, there has been a noticeable softening in domestic travel demand as more American travelers venture abroad. Higher-income households, earning over $125,000 annually, appear to be leading the trend towards international travel, with luxury hotels witnessing higher demand compared to standard accommodations.
While some travelers have expressed concerns about the spike in inflation post-pandemic, most intend to continue their travel plans. Cost-conscious travelers are adapting by choosing off-peak travel periods or booking their trips further in advance. This shift in behavior demonstrates a willingness to overcome challenges and continue exploring new destinations, both domestically and internationally.
The resurgence of travel spending among American households post-pandemic showcases a renewed enthusiasm for exploring the world. The shift towards international travel, driven by factors such as reduced airfare prices and relaxation of travel restrictions, highlights a positive trajectory for the travel industry. As travelers adapt to new realities and navigate changing landscapes, the allure of travel remains strong, promising exciting adventures and experiences for years to come.