Americans are looking to spend more this summer on their vacations, with their total spend on summer vacations estimated to breach the $200 billion mark, recent research has suggested.
According to Allianz Partners USA’s annual Vacation Confidence Index, Americans’ summer travel expenses are expected to amount to $214,000,000,000, representing a 10% rise from 2022, a 39% increase from 2021 and a whopping 261% from 2020.
The projected annual summer travel spend is a 111% increase from 2019 figures, the study revealed.
SPENDING TRENDS
Americans have doubled their summer vacation spending in four years, according to the 15th Annual Vacation Confidence Index.
This summer, the average American household is expected to spend an average of $2,830 on their vacation. This exceeds $2,000 for the fourth time since Allianz Partners began tracking vacation trends in 2009.
The average expected vacation spending per household this year has skyrocketed by roughly $1,000, rising 7% from 2022, 33% from 2021, 50% from 2020 and 39% from 2019.
A record-breaking number of American travelers is expected this year, the study said.
“Whether heading near or far, increased traveler numbers can mean an increased chance of travel delays,” said Daniel Durazo, director of external communications at Allianz Partners USA.
Despite a “devilish mix of inflation and strong demand” resulting in continued increased travel prices, Durazo said the survey found that Americans are still willing to pay top dollar for “a well-earned summer vacation.”
DEMAND FOR AIR TRAVEL
Air travel demand is projected to be the strongest since 2019 and potentially the strongest ever, according to the U.S. Travel Association (USTA). USTA’s Q2 consumer survey found that 26% of Americans plan to increase the amount they spend on leisure travel in the next three months, up from 19% in Q1.
A study by Expedia revealed similar air travel preference trends. According to Expedia’s Summer Travel Forecast, flight searches surged by 25% overall for June to August compared to the same time in 2022. Interest was also up triple digits for international destinations in Europe and Asia. Additionally, average ticket prices fell by $125 from their peak in early July to August.
New York City, Los Angeles, Seattle, Orlando and Las Vegas emerged as the leading domestic destinations.
According to USTA, about 52% of Americans said they would travel more for leisure over the next six months if it weren’t too much of a hassle, up from 29% in Q1.
About 42% of Americans said they had already traveled by air for leisure in the past 12 months, and 35% among those said they faced a delayed or canceled flight. About 32% reported being very satisfied with the air travel experience.
“Protecting pre-paid expenses with a travel insurance policy that also offers travel delay coverage can end up being one of the smartest investments Americans can make,” Durazo said.
CONCERNS
While the travel patterns seem to suggest a strong summer travel season for Americans and over the next six months, inflation and elevated interest rates are dampening overall spending patterns.
As per a recent analysis from PwC, the recent bank failures, a slowing economy and a liquidity crisis are estimated to have a downstream impact on hotel performance for the rest of this year and into 2024.
However, for the rest of the year and into 2024, continued growth in demand for individual business travel and groups will offset the slowdown of leisure demand, with outbound travel outperforming inbound, the PwC report said.