They probably won't go to Paris to see it. Taylor Swift. But even if Swiftnomics isn't part of the trend, spending by older, higher-income consumers drove the surge in travel in the first quarter, cutting across income and age lines.
dig deep PYMNTS Intelligence’s Latest “Last Transaction”“When we analyzed consumer spending patterns in the first quarter, we saw increases across all age groups in the travel category, with credit card usage up 24% compared to the fourth quarter. Lower-income consumers are outnumbered by older (44+) and higher-income ($100,000+) consumers.
According to the numbers, older, higher-income consumers are on pace to spend $1,202.10 on credit card travel, which was the same level as in the first quarter. This number plummeted to $654 in the second quarter of 2023, but has now recovered to $1061.30.
YYoung, high-income consumers spent $413.30 on travel in consumer credit in the first quarter of 2022, up from $222.50 in the fourth quarter of 2022. Seniors with low incomes (less than $100,000) increased their spending dramatically from a low of $39.70 in the third quarter of 2023 to $341.30 in the first quarter of 2023. Young, low-income consumers rose from an average minimum of $106.20 in the third quarter of 2023 to $184.11 in the first quarter.
What's Driving These Trends? PYMNTS Intelligence's view is that older adults' increased use of credit cards to purchase travel offers protection against trip cancellations and fraudulent charges. It is said to highlight the trust they have in their credit providers.
The PYMNTS Intelligence report states, “As many older consumers retire and have more flexibility to travel, differences in spending can be attributed to differences in priorities, financial strategies, and available leisure time. There is also a gender.''
Within these dynamics, and as we consider new dynamics, there are other clues to the surge in travel spending.
Business trip: Travel spending has increased significantly in recent months, especially among global multinational companies.
as seen in Pymunto, For the first time since the recovery from the pandemic, growth in travel value for large companies exceeded growth in travel value for small and medium-sized businesses (SMBs), according to American Express Global Business Travel (AmEx GBT).
In the first quarter, Amex GBT reported that global multinational business transaction growth increased by 11% year over year, while small business transaction growth increased by 5% year over year. This growth was particularly strong in sectors such as technology, professional services, pharmaceuticals, mining, energy, and utilities.
Airlines like delta, united and alaska airlines A recovery in corporate travel has also been reported, with bookings reaching or exceeding pre-pandemic levels. Increased spending by technology companies, as well as a more optimistic economic outlook and a return to office work, contributed to this growth. As a result, airline executives expect demand for business travel to continue to increase in the coming months.
Offers linked to cards: Recent PYMNTS Intelligence A research study conducted in conjunction with Banyan showed that travel credit cards are becoming increasingly popular among consumers, especially those with children.
The study found that nearly 64% of consumers are likely to use a card-linked offer (CLO) for local travel purchases in the next three months, and 60% are likely to do the same for long-haul travel purchases. It turns out that they are planning to use it. These numbers highlight the growing importance of travel credit cards, which offer a variety of benefits, including free travel vouchers, reduced baggage fees, car rental discounts, and free travel insurance.
Intention to use CLOs for travel purchases is even higher among consumers with children in their care, 38% more for long-haul travel and 30% more for local travel awards compared to consumers without children doing. The study also found that travel is consumers' top choice when using CLOs, ahead of other categories such as groceries, streaming subscription services, and personal health.
As a result, travel industry merchants that leverage product-level receipt data to deliver targeted CLOs have the potential to gain a competitive edge in the market and drive increased customer engagement and loyalty. there is.
Buy now, pay later: Another status report from PYMNTS Intelligencecollaboration with Splitit, adding color to the surge in travel. Three in five consumers across all categories say they have used some type of installment payment option at least once in the past year, and 37% of consumers have used BNPL. I answered that there were some things. More than 1 in 3 said she used her BNPL to purchase clothing and accessories, 18% used it to purchase groceries, and more than 14% chose her BNPL when paying for travel-related services .
Loyalty program: Recent reports indicate that rewards programs in the travel sector are becoming more aggressive, potentially increasing consumer travel.2023 Study on Travel Loyalty from Travel Technology Companies Alivia marks a significant shift in program goals from member acquisition and retention to profitability, with a focus on incentivizing members to move up the tier, increase spending, and introduce new benefits and redemption options. .
