Consumers’ travel intent is holding strong this year, buoyed by a robust labor market, a recent study has revealed. The momentum is expected to continue this year, with the strong labor market empowering travelers to embrace more experiences.
The travel sector is breaking boundaries this year as passenger traffic surges and consumer spending on travel remains strong, according to the Mastercard Economics Institute’s fifth annual travel report. The report offers insights into the changing landscape of the travel sector across 74 markets.
Despite challenges like fluctuating exchange rates, climate concerns and differing levels of affordability, the desire to travel remains strong. Consumers have clear ideas on when, how and where they want to travel, with travel trends set to see some significant changes this year, the study said.
There is an increasing desire for more meaningful and immersive experiences, highlighted by data which revealed that travelers are extending their trips by one more day over the 12 months ending March 2024, compared to the same period in 2019.
Other than air travel, vacationing by cruise has surpassed 2019 levels to witness impressive growth. The widening price difference between cruises and hotels has added to the appeal of cruises and made it a budget-friendly option for a vacation, the study said. Global cruise passenger transactions were roughly 16% higher than 2019 levels in Q1. Key ports are also witnessing significant demand for cruises. In the last 12 months, The Bahamas has welcomed additional 2.9 million passengers, who arrived by sea compared to 2019.
Some of the notable global travel trends are:
- Record traveling: A record 15.9 million Americans traveled internationally in Q1 2024. Japan welcomed more than 3 million passengers in March alone.
- Consumer spending: Nine out of the last 10 record-setting spending days in the global cruise and airline industry were reported this year, as of March 2024.
- Events: Major events, such as concerts and sporting events, are influencing travel trends and providing robust incremental spending lift to businesses near and adjacent to the event area.
- Top gainers: Japan, Ireland and Romania saw the highest growth in share of spending from travelers compared to 2023.
- Prioritizing meaningful experiences: Consumers value experiences more than material goods. Spending on experiences account for 12% of tourism sales, according to SpendingPulse Destinations, which measures in-store and online retail sales across all forms of payments. This was the highest level in the last five years. Australians tend to spend one of every five dollars on experiences and nightlife compared to the global average, which is close to one in every 10.
TRENDING DESTINATIONS
The top 10 global trending destinations for this summer are:
- Munich: The city will see the highest increase in tourism demand heading into the summer. Munich will be hosting the opening game of the European Championship in soccer in June.
- Tokyo: A historically weak yen and an entire year of no restrictions has helped attract a high volume of tourists, much higher than historically normal levels.
- Tirana, Albania: A short drive from several coastal hotels, the city is much more budget-friendly compared to the big tourist hubs in other coastal European countries.
These three destinations are followed by Nice, France; Cancun, Mexico; Bali, Indonesia; Bangkok; Kerkyra, Island of Corfu, Greece; and Aruba.
“The resilience and adaptability of the travel sector paired with persistent consumer demand has translated to a strong tourism rebound,” said Michelle Meyer, chief economist and head of the Mastercard Economics Institute. “Just like at home, travelers are prioritizing experiences over goods while abroad. Yet, today’s travelers are discerning, choosing destinations that offer both value and authenticity. They are savvy enough to stretch their funds and extend their stays, immersing themselves fully in the experiences and wonders of each locale.”