Travel is too expensive now — travel demand falls under cost concerns

Travelers may have finally had enough.

With revenge travel over and pandemic savings depleted, travelers say they’re planning fewer trips this summer, or skipping their vacations altogether.

“After two straight years of strong gains, the number of Americans planning to take leisure trips is taking a dip,” states a summer travel report from Deloitte Insights.

The close of the second-quarter earnings season showed that major companies such as Marriott, Hyatt, Wyndham, Airbnb and Expedia are expecting travel demand to weaken this year as well.  

Americans are planning 2.3 trips this summer, down from 3.1 trips from the summer of 2023, according to Deloitte’s survey of more than 4,000 people.  

The number of people who said they’re avoiding summer travel altogether increased from 37% to 42%, the report showed. When asked why they’re staying home, nearly a third of respondents said “travel is too expensive right now” — a jump of eight percentage points from 2023, according to Deloitte.

Some 14% of respondents who intend to travel said they plan to spend less, with shorter trips cited as the most popular way to do so.

But another 19% said they plan to spend more (down from 25% in 2023). However, this isn’t necessarily because they want to, but more so because they feel they must.

“The most cited reason for increased spend is rising prices, not more ambitious trips,” the report stated.

Average spending on discretionary goods and services — like travel, clothes and home furnishings — decreased across the board this summer, said Sofia Baig, economist at the data intelligence company Morning Consult.

The biggest cutbacks are in recreational spending among Gen Zs and millennials, a category that includes concerts and sports events, according to a July report by Morning Consult.

Those generations are spending less on airfare and hotel accommodations too, said Baig, suggesting a cutback in travel spending may be a normalization of the market following the end of revenge travel.

“Younger adults have shrunk their share of budget for ‘fun,'” according to the report states, which showed they’re continuing to pay up for items like personal care products, restaurant food, and alcohol.

Gen Zs exploded into the travel scene, with the oldest members entering adulthood at roughly the same time that Covid-related travel restrictions started to end.

To the alarm of older travelers, a lack of funds didn’t thwart their travel ambitions, as social media and a growing cohort of travel influencers spurred trips that past generations normally put off for years.

The role of travel in younger people’s lives is different too. Younger travelers are more apt to view traveling as an essential part of their mental health rather than a discretionary splurge.

While their parents saved for wedding rings, homes and a nest egg to cover six months of expenses in their 20s, the Gen Z mindset is still more about seizing the day, rather than saving for a rainy one.

But there is a limit to this mentality, said Baig.

“Although travel may be ‘fundamental to their wellness’, it is not truly essential like paying rent or buying groceries,” she said.

Still, they are “putting their money where their mouth is,” she said, by “allocating a larger share of their budget to travel than older generations.”

An April report published by the travel company Hopper found that Gen Zs who earn less than $50,000 annually spend up to 49% more on travel than older people who earn the same amount.