Friday, June 14, 2024

Summer Staycations in Store as Consumers Trade Down on Travel

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As we recently reported, despite steady signs of inflation, about half of U.S. consumers are planning to take summer vacations in the weeks to come — and many even anticipate spending even more this summer than last. 

But, as PYMNTS Intelligence recently revealed in its latest edition of our “New Reality Check” report, “Paycheck-to-Paycheck Foodies Skimp on Beds, Splurge on Spreads,” not everyone is packing their bags.

Opting to stay home may make sense for some in light of the fact that data shows 64% of U.S. consumers now live paycheck to paycheck, which is up from 61% in April 2023. Following this trend, one-quarter of the 2,238 consumers we surveyed for the report say their financial situation has worsened this year.

As a result, many Americans have been forced to cut back on their spending, and the belt tightening includes staying put this summer — at least for some.

While 61% of consumers living paycheck to paycheck who have no issues keeping up with their bills, and 44% of those who admit they struggle to pay their monthly bills, say they intend to travel this summer, economic uncertainty has stymied summer travel plans for many others.

As the figure below illustrates, financial limitations are the leading reason survey respondents cite for not traveling this year. Seventy-nine percent of paycheck-to-paycheck consumers who have issues paying their bills say they plan to stay home this summer because they can’t afford travel expenses. Meanwhile, 51% of those living paycheck to paycheck who still manage to keep pace with their bills say the same thing. Even 19% of those who are not living from one paycheck to the next say they cannot afford summer travel.

This last group — consumers who aren’t living paycheck to paycheck — may also simply prefer to avoid summer crowds. After all, 22% of them identify their preference to stay home as the top reason they won’t be traveling this summer. And 11% of them say they prefer to travel during the off-peak season.

For paycheck-to-paycheck consumers who are still planning to travel despite financial strains, the answer seems to be making concessions and cutting corners. For instance, our data shows this segment of consumers is the most likely to travel to more budget-friendly locations and travel in groups to save money. They are also less likely to get hung up on the quality of their accommodations. Instead, they are making extended stays and the quality of their meals a bigger priority than lodging. The takeaway is that — at least for some financially struggling consumers — summer travel remains necessary.

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