US consumers are spending less on products and more on experiences — a trend that could ease supply snags and inflationary pressures, and help the travel industry this summer.
The Mastercard Economics Institute released a report that showed leisure travel returned to its 2019 level for the first-time since COVID was implemented to stop international movement. Even though there has been an increase in travel cases, and the average global airfares have risen 18% since last year’s start, people are more confident about going on far-flung adventures.
“If flight bookings continue at their current pace, an estimated 1.5 billion more passengers globally will fly in 2022 compared to last year,” the report said, “with Europe seeing the biggest increase — about 550 million.”
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The April increase in short and medium-haul travel was 25% and 27%, respectively, compared to the same period of 2019. While long-haul flights, which were 75% less than they were pre-pandemic, have rebounded to just 7.7% in April. The recovery of passenger rail and buses is similar. The 2019 peak was 75% lower than the 2018 peak, and cruise spending is now only 10% away from a complete recovery.
According to the report, the tourist looking for adventure seems to be driven by a pent-up demand. The report shows that nightclub spending rose 72% over 2019 levels and restaurants increased 31%. Other recreational activities such as concerts, museums, and amusement parks are up 35%. Comparatively, tourism spending on retail goods such as clothes and cosmetics is declining.
According to the report, Mexico was the top international destination for March travelers departing North America. The UK was second, with Europe, the Middle East, and Africa being the least popular. For those who travel from Latin America and the Caribbean regions, the USA is the top choice.
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