International Travel Leads in Discretionary Spending: Amadeus

Last week, travel technology company Amadeus revealed insights on consumers’ expected spending habits, as 42 percent of respondents confirmed that international travel is a high priority spend area for the coming year—far higher than fashion, eating out and big-ticket items like home improvements.

The “Consumer Travel Spend Priorities” polled 4,500 people from the U.S., U.K., France, Germany and Singapore to learn more about their expected spending habits over the next 12 months. While the plurality of votes went to international travel when it came to discretionary spending, coming in second was domestic travel, with 32 percent of the vote.

On average, according to the report, consumers estimate they will spend $2,670 on international travel over the next 12 months—in line with how much they spent in 2019 ($2,780). That said, when looking at the U.S. portion of the study, these numbers are a bit higher. On average, travelers in the U.S. estimate that they will spend $3,268 on international travel over the next 12 months (roughly equal to 2019’s $3,465).

When asked why they planned to prioritize travel spend, Americans said: The ability to see family and friends (37 percent); the fact the past few years have been challenging (36 percent); additional savings built-up during the pandemic (35 percent); the lifting of travel restrictions (27 percent); and that the cost of living is lower in other countries (24 percent).

Three quarters of all respondents (75 percent) said they are more likely to choose a pay-by-installment option like “Buy Now, Pay Later” to fund travel over the coming year. This compared to 44 percent who are more likely to use a credit card and 26 percent who are more likely to turn to “payday loans,” where short-term borrowing typically incurs high interest rates. Nearly half (47 percent) of travelers said they are planning to spend any loyalty points they’ve previously collected to pay for trips.

Travelers are also embracing new fintech options, with 48 percent more likely to try pre-paid debit cards that hold multiple currencies to avoid exchange fees when paying abroad, and 49 percent saying they are now interested in co-branded cards that yield loyalty points. On that same note, 73 percent of travelers say they are more likely to pay attention to exchange fees and costs associated with international travel and 56 percent are more likely to choose a travel provider that lets them pay in their own currency, with transparent FX fees.

Source: Amadeus

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