Off the Grid Economic Indicators: Vacation EditionBy admin_45 in Blog
With Memorial Day kicking off summer fun this upcoming weekend, are you planning on taking a vacation over the next few months? With an unemployment rate of just 3.6% and decent wage growth of 3.2% as of April, the US consumer should be in a good shape to take a break from work.
Here’s what a few recent surveys show Americans expect on the vacation front this summer:
Bankrate Survey (conducted from March 20th-22nd 2019, sample size of 2,577 US adults)
- About half (52%) of Americans plan to take a summer vacation, slightly up from 51% last year. They expect to spend an average of $1,979 or a median of $1,000 on all related expenses.
Older millennials aged 30 to 38 plan to spend the most on average ($2,366) versus other age cohorts, while unsurprisingly younger millennials plan to spend the least ($1,297).
- A little over a quarter (26%) of respondents don’t plan to take a trip over the next few months, and the rest (22%) are still undecided.
- The most common answer for why some Americans don’t plan on vacationing was financial: 60% said they cannot afford it, up from 50% last year. Of those particular respondents, the two most common reasons for why they didn’t have enough discretionary cash-on-hand was due to day-to-day bills (44%) and the need/desire to pay down debt (22%).
Gen X (74%) was most likely to blame affordability for not going on a vacation, while baby boomers (20%) and the silent generation (48%) were most likely to not go due to health or age. Younger millennials aged 23 to 29 (29%) were most likely to express a lack of interest in a summer vacation.
- Only a little over a third (38%) of survey respondents who get paid vacation time plan to use all of those days. Six percent don’t plan to use any of their paid time off, while 5% said they’ll use less than a quarter. Just 59% of those who have paid vacation time plan to use more than half of it.
Recent AAA Travel Survey
- Almost 100 million Americans - or about 4 in 10 US adults – plan to take a family vacation in 2019, “slightly more than last year”.
- Two-thirds of all family travelers (68%) plan to take a summer vacation and a little under half (45%) plan to travel as a family this spring. Around half of families (53%) plan to go on a road trip this year.
- People from the South are most likely planning to go on a family trip this year (62%) than those in the Northeast (35%).
Online group travel booking website HotelPlanner’s ‘Summer Vacation Habits’ Survey
- Most Americans (71%) plan on traveling this summer and 43% of those that do said they would take more than one summer trip.
- The top destinations from first to last: Orlando, New York City, Las Vegas and Los Angeles.
- Over a third (38%) of Americans budgeted +$3,000 for their summer vacations, 32% put aside $1,000 or less for a summer trip, and 28% budgeted between $1,000-$2,000.
Most of them (57%) will dip into their savings to pay for it, 21% will use a credit card, and 7% will use their tax refund.
- Over half of respondents (56%) with household incomes of less than $50k are planning on vacationing this summer. Eighty percent with a household income of +$100k expect to vacation. Only 12% said they won’t take a vacation this summer because of financial constraints.
Overall, that most Americans plan to go on a vacation this summer shows the economy remains robust this late into the economic cycle. Of course, there’s always going to be a portion of Americans who can’t afford the outlay. That said, a trip to Google Trends shows US online searches of “vacation” have been trending down with lower peaks over the past 5 years. Searches for “Disney” and “Universal Studios” are also pretty flat over the last 5 years and peaked in 2016/2017. Interest in a “cruise” hit its 5-year high back in July 2015, although it did almost match that level last summer. Good news for Airbnb as it currently has peak interest, perhaps from those searching for a place to stay for Memorial Day.
Bottom line, we think all this data points to a healthy US economy and consumer, rather than signaling that we are at an unsustainable supercharged top for the current cycle.