There's been a generational shift in the nature of travel and how people are choosing to spend their money this summer.

Summer is here and that means a whole new set of consumer habits are driving the vacation economy for the next few months.

While discretionary spending allocated to travel across American households is not notably high, a 2024 Bank of America Summer Travel Survey found, more than 70 percent of respondents indicated they are planning summer travel. Gen Z and Millennials in particular indicated they are planning to spend more and vacation longer compared to previous years. The survey examined results from 2,010 adult respondents in the U.S. Part of these spending habits indicate a continued commitment to travel experiences, a post-pandemic change in spending priorities, Deloitte reported.

That means there are opportunities for businesses to tap into the ways people are traveling this year. Here are the key insights founders should pay attention to this season.

Generational trends

The number of young adults planning to travel this summer is increasing. Bank of America found that compared to other generations, Gen Z is planning international trips, taking more vacations than prior years, taking longer trips, and more expensive trips. Millennials are the second most likely to have those priorities.

In terms of product purchases, a Tripadvisor study-surveying 4,000 travelers across the world--found that Gen Z and Millennials are the most willing generations to spend most on non-travel products in nearly every category. For example, they are 166 percent more likely to consider portable gaming consoles this season and 144 percent more likely to consider purchasing energy drinks while on the road. The study also found that these young travelers are more likely to embrace financial services like digital wallets and are 92 percent more likely to embrace peer-to-peer payment apps like Venmo.

For 82 percent of Boomers and 76 percent of Gen X, finding a hotel is one of the biggest factors affecting vacation plans compared to Millennials and Gen Z who prioritize this less, Tripadvisor also found.

In terms of travel activities, the Bank of America study indicated that Gen X and Baby Boomers are most likely to go over their budget to try new restaurants while Gen Z and Millennials are most likely to go over budget for concerts and music festivals.

A rise in spending on non-travel products

The Tripadvisor study found that consumer spending on non-travel rises throughout the process of planning and experiencing a vacation. A vast majority of respondents--84 percent--indicated they consider purchasing non-travel products and brands.

For non-travel spending in particular, respondents are six times more likely to consider making personal care purchases and twice as likely to consider electronics when preparing for a trip more than any other part of the travel phase. For founders, this could mean marketing to consumers in the planning and preparation phases of travel.

The travel budget

This summer marks a continuation in increased spending of experience since the pandemic. A Deloitte study surveying 4,022 Americans concluded that this year's spending habits indicate a lasting shift in spending priorities on travel since 2020. The report advises companies to "optimize the flexibility of their offerings to make the most of 2024's prevailing financial mood--whether exuberant or subdued."

Respondents indicated that travel has become more important since the pandemic--but the most popular aspects of travel to cut back on when budgets are tight are hotel ratings, airlines, and seat upgrades. The most popular categories to splurge on include lodging location, destination distance, flight itinerary, and experiences at the destination. Consumers of all income levels are interested in finding good deals.

Of the respondents who indicated they would not be traveling this summer, 34 percent said it's because prices are too high--that's a jump from 26 percent in 2023. But there seems to be a spending disparity: High earners represent a bigger share of the traveling public this year than in 2023.

This post originally appeared at inc.com.

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2024-06-08T20:27:07Z dg43tfdfdgfd