While many Americans start planning their summer vacation trips as early as Memorial Day, a recent Bankrate survey found that 47% of people will skip summer vacation altogether. And of those who do go, more than one in three will go into debt to pay for their summer vacation.
People who travel and people who don't
Gen X, the generation that worries most about finances, is the most likely to avoid traveling this summer, with 67% of those surveyed saying they can't afford to go anywhere. Majorities of millennials and baby boomers also agree that they can't afford to travel. About 53% of Gen Zers say they don't have the funds to go on a trip.
But low cost isn't the only reason people aren't traveling: About 24% of respondents said they simply weren't interested in traveling this summer, 13% said health issues prevented them from traveling, and 11% said travel is too disruptive right now. Some also said family or work commitments kept them from staying at home.
Crowding is also an issue, with 1% of respondents admitting they wouldn't travel to their desired destination because it was too crowded.
Despite the cost, many of those who do travel say they use a credit card to fund their trip: About 47% of millennials who travel say they would be willing to go into debt to pay for a trip, while 42% of Gen Zers say they are keen to use a credit card for vacations.
Where will it go this summer?
According to American Express, 67% of millennials and Gen Z plan to attend a major sporting event this summer. Some will head to Paris for the 2024 Summer Olympics, while MSN reports that Taylor Swift's ERAS European tour is drawing five times as many American travelers as the XXXIII Olympic Games.
According to TravelAge West, searches for trips to Paris increase around Memorial Day but then drop off afterwards, but searches for Rome are up 34% from 2023 and Tokyo is up 45%.
As expected, Gen Z is all about travel experiences. According to TravelAge West, young people are looking for road trips they can take with friends, with Jasper, Canada being a top destination.
Domestic flights still make up the majority of travel itineraries, with Orlando, Seattle and Boston seeing the most flight bookings, according to TravelPulse, and American Express reports that more Gen Z and millennials are considering traveling alone this summer.
Solo travelers can choose their own preferred destinations and aren't tied to a specific itinerary — they can travel and experience what they want. These groups are also the most likely to book larger trips, like cruises to the Galapagos Islands or gorilla-watching expeditions in Uganda.
“We're going to Spain!” says Tiffany McCauley of Slappy Toad. “Inflation won't stop us from traveling, but it will change how we travel. We're seriously looking for a dog-friendly hostel rather than a hotel or Airbnb so we can bring our dog.”
Payment of travel fare
Travelers who don't have the money or time to take an extended vacation still have options. Staycations are a popular option for many who need a vacation but need to stay close to home. This group can opt for a weekend staycation in their own town or a nearby city.
Staycationers can search their state's travel website to find tourist spots they haven't visited yet and may not know about. If you want to take a short road trip, set a distance limit for how far you want to travel (such as within 50 miles of home) and look for lodging, restaurants, and attractions within that radius. Because your stay is short, you may decide to stay in a more upscale hotel than usual.
Travelers who fund their trips with a credit card should consider a travel credit card. These cards offer a variety of perks, including cash back rewards, points for hotel stays and flights, and airport lounge access. Some cards even offer 0% interest for a period of time, which is fine if you can pay off your balance in full within that time. The downside is that these cards usually require good to excellent credit and can have high annual fees. Travelers will need to shop around to find the card that best suits their needs and travel style.
Some people aren't interested in using credit cards or don't have a high enough credit score to be approved for one. Buy now, pay later (BNPL) is a new take on an old concept that can help pay for big-ticket items like travel. It's a short-term, often interest-free loan available from companies like Affirm and Klarna. The benefit is that your credit score won't go down unless you miss a payment, and depending on the plan you choose, you may not have to pay interest. These companies can charge as much as 20% interest, but it's still lower than the interest rates on many credit cards.
The payment schedules for these plans can be strict, so anyone considering this method to pay for travel should understand all of the loan terms before applying. Also, BNPL loans do not appear on credit reports, so people with low credit scores cannot use this method to improve their credit rating.
Travelers can also find ways to save money on vacation. Stay in cheap hotels, eat at local places that aren't too expensive, and visit less crowded areas that don't have overpriced attractions for tourists. Consider the cost of souvenirs and plan to cut costs there, too. Postcards are cheap and photography is free.
McCauley agrees: “We will be using public transportation rather than renting a car, and we will be shopping at grocery stores rather than eating in restaurants.”
Summer travel is tempting, but much like vacation spending: It feels good in the moment, but the feeling fades when the bill comes due. Travelers need to consider whether going into debt for a travel experience is worth it.
This article was produced by Media Decision and distributed by Wealth of Geeks.
