Travel marketers take note: Americans are tired of worrying about the recession and are ready for a vacation, according to Mintel.
Mintel’s annual comparative audit report, American Lifestyles 2014, suggests that renewed consumer spending is in line with pre-recession trends and consumer optimism is higher than it has been in years.
Over the course of one year, the share who say they spend extra money on vacations nearly doubled. This is the greatest gain for any one area of consumer spending and is a sign of improved finances -- or at least optimism since, when money is tight vacations are often one of the first discretionary areas to be cut from the budget.
“One of the common themes noted across different sectors examined in the report is that optimism is a hallmark of youth,” says Fiona O’Donnell, category manager, multicultural, lifestyles and leisure at Mintel.
Adults ages 18-24, in particular, are looking at the world around them and see all the possibilities ahead. Owing in part to social media and the ability to share instantaneously with others, young adults are placing a higher value on experience as opposed to some of the more traditional purchases of their parents’ generation.
“A desire for experiences over stuff -- coupled with a record number of Baby Boomers reaching retirement (meaning that this relatively wealthy demographic has more free time on their hands) -- has seen expenditures on categories such as vacations,” O’Donnell says. “This is a trend that is expected to continue over the next five years.”
Vacations and tourism spending has outpaced total U.S. consumer expenditure growth and is estimated to have increased by 4.6% from 2012 to 2013, compared with a total growth of 3.4%. Over the next five years, steady growth is expected in the vacation and tourism segment, with total expenditures forecast to reach $282.4 billion by 2018 -- a 27.3% increase over 2013 spending in comparison to the total spending growth prediction of 20% over the same time frame (2013-18).
Interestingly, when respondents’ change in vacation spending in 2013 is compared to results from last year’s survey, it appears that Americans are more likely to indulge. While previously, 41% of respondents indicated they were spending less on vacations than they had in the year before, this share has now declined dramatically to just 30%.
“Consumer spending on vacations and tourism will outpace total expenditure growth over the next five years, due mainly to increased costs associated with international travel as well as a stable and growing domestic market,” O’Donnell says. “Baby Boomers are a driving force behind vacation spending, though families headed by young Millennials will also contribute to the market.”