Despite ongoing economic uncertainty and inflationary pressures, travel saw a significant rise this summer.
According to findings detailed in “The Credit Economy: How Consumers Financed Their Summer Travel,” a collaboration between PYMNTS Intelligence and i2c, close to two-thirds of consumers had summer travel on their agenda, and nearly one-third anticipated more travel this summer compared to the last.
Younger generations, in particular, displayed a strong interest in traveling, with 7 in 10 Generation Z and millennial consumers reporting they had already made or intended to make summer travel plans.
When it comes to paying for travel expenses, the study, which draws on a survey of nearly 3,400 consumers to examine consumer behaviors and attitudes related to summer travel spending, found that credit cards remain the preferred choice for most travelers, with older generations tending to opt for credit cards, while the younger generations lean more toward buy now, pay later (BNPL) options.
But as much as enthusiasm about traveling this summer was high, not all consumers were keen on traveling.
In fact, several issues contributed to some consumers’ traveling less than they did last summer, with nearly half of consumers surveyed citing high travel costs as the top reason. Other reasons that negatively impacted consumers’ travel plans were a decline in personal finances or job stability, increasing impact of inflation and lower trust in the economy.
This comes as the travel industry, which experienced a significant boom following the pandemic, is facing challenges as the post-pandemic travel surge begins to slow down, PYMNTS reported on Wednesday (Oct. 12), per a WSJ report.
While major airlines continue to witness steady demand, budget carriers, which rely on cost-effective operations and high passenger volumes to remain profitable, are bearing the brunt of the slowdown in travel demand, indicating that even their budget-friendly prices might remain unattractive to consumers grappling with economic uncertainties and inflation.
On the upside, digital tools such as all-in-one digital travel management and payment apps have proven invaluable to budget-conscious consumers, streamlining the process of travel planning and payment, as noted in the latest edition of the Ingo Money/PYMNTS Money Mobility Tracker® Series titled “Tap and Tip: Travel and Hospitality Embrace Digital and Instant Payments.”
In conclusion, despite the significant resurgence in travel this summer, consumers faced a myriad of challenges that impacted their travel plans. The desire to travel clashed with the constraints of high travel costs, personal finance instability, inflation’s looming shadow, and eroding confidence in the economy. These factors, coupled with the slowing post-pandemic travel surge, have left consumers more selective in their travel choices, with the budget-conscious segment showing particular caution.
Fortunately, digital travel tools have become essential for budget-conscious travelers, offering seamless planning and payment solutions that are helping travelers navigate these challenges while still enjoying their travel experiences.