Surveys show that Gen Z is worried about money, but it's not stopping them from traveling.
Klaus Wedfeldt | Digitalvision | Getty Images
Family tourists please move out of the way.
Gen Z is poised to be one of the biggest travel buzz this summer, as research shows they're planning more vacations and tend to spend more than older travelers.
According to a report released by Bank of America on May 20, Gen Z is no longer content with road trips to their parents' hometowns and is more likely to plan international vacations than other generations.
The survey of more than 2,000 Americans found that Gen Z is planning longer trips and taking more expensive vacations at higher prices.
According to a report released in April by market services firm PMG, Gen Z is leading this year's surge in travel spending, along with millennials.
The report, which surveyed 1,800 adults in the US, UK, India, Germany and China, found that 65% of Gen Z and 72% of millennials say they plan to spend more on leisure travel this year, compared with 54% of Gen Xers and 40% of baby boomers who said the same.
But how Gen Z — often defined as those born between 1997 and 2012 — plans their travel finances is also different from other age groups.
The number of Gen Zers who said they are traveling because they have savings has declined since August 2023, according to a new report from research firm Morning Consult.
But that won't stop them, said Lindsay Roeschke, travel and hospitality analyst at Morning Consult and author of the report.
“Generation Z is coming of age during an incredibly turbulent time,” says Roeschke, “and this is profoundly influencing their travel behavior.”
“Why would they put off going to places they want to go to save money when a pandemic or a financial crisis or a war or some other major event might happen and prevent them from going to places they really want to go?” she told CNBC.
Roschke also noted that Gen Z will likely spend their time looking for ways to cut travel costs rather than canceling or postponing trips.
“They're looking for ways to make trade-offs to save money, which could include traveling during the off-season, using apps and other technology to compare prices, cashing in credit card points, making trade-offs in other areas of spending or even starting a side hustle to help fund their travel,” she told CNBC.
Still, 42% of Gen Zers and 47% of millennials say they plan to fund their summer trips with debt, according to a survey by financial services firm Bankrate.
According to the report, the most popular ways to fund your summer vacation trip are:
- Credit card paid over multiple months – 26%
- Buy now, pay later – 8%
- Borrowing from family and friends – 6%
- Personal loan – 5%
This debt-free mindset is worrying older generations who didn't travel as ambitiously, or at all, in their 20s and is also raising eyebrows among financial experts like Bankrate senior analyst Ted Rothman.
“While we don't want to tell people they can't have any fun, we are concerned about going into debt for discretionary purchases like vacations, especially with credit card balances and interest rates at record highs,” Rothman said in the report.
Roschke noted that travel-loving Gen Zers aren't always as optimistic about their financial situation: Nearly a quarter (24%) said they felt pressured by friends to take trips they couldn't afford, according to a survey published in May by financial-services firm Empower.
According to Morning Consult, compared to other adults, Gen Z is more likely to say their personal finances, the overall economy, and climate change are negatively impacting their desire to travel.
“But they're still doing it!” Roeschke said.
