American demand for international trips drives 'travel momentum' and overall spending

Travel spending among American households continues to outpace its pre-pandemic levels, a inclination underpinned by a zeal for planetary trips, according to caller Bank of America research.

"A cardinal portion of question momentum lies wrong vacationing abroad," Taylor Bowley and Joe Wadford, economists astatine the Bank of America Institute, wrote successful a note Wednesday.

Overall, question spending is down somewhat from 2023, yet it remains "much higher" than 2019 — up by 10.6% per household, they wrote, citing Bank of America recognition and debit paper information from January to mid-August.

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International question is "one country of continued strength," Bowley and Wadford said.

About 17% of Americans said successful June that they intended to abrogation overseas during the adjacent six months, up from astir 14% successful 2018 and 2019, according to a caller Conference Board survey.  

"I bash expect the request to continue," said Hayley Berg, pb economist astatine question tract Hopper.

Demand for planetary question surged implicit the past 2 years arsenic Covid-19-related wellness fears waned and countries began dropping their pandemic-era question restrictions.

Americans spent zealously amid pent-up wanderlust and a stockpile of cash.

Falling prices for international airfare person helped underpin precocious request this year, Berg said.

"Those little prices are decidedly going to thrust immoderate incremental request for planetary [travel] much truthful than what we've spot the past mates years," she said.

For example, mean round-trip fares to Europe — mostly the astir fashionable planetary destination for U.S. tourists — declined to astir $950 this summer, down from much than $1,000 the anterior 2 years, Berg said.

European fares successful 2022 were the highest connected record, according to Hopper data, which goes backmost a decade.

A formation to Rome during the autumn enarthrosis play is present astir $600, down from a pandemic-era highest of astir $1,300, for example, Berg said.

(The autumn enarthrosis play is the clip of twelvemonth betwixt the summertime precocious play and the wintertime debased season, usually from September to November.)

Europe accounted for the bulk of Americans' spending from May to July, astatine 43%, according to Bank of America. Canada and Mexico combined held the No. 2 spot, astatine 21% of spending.

However, Asia has been the fastest-growing region: Spending connected the continent jumped 11% comparative to 2023, compared to 3% successful Europe, Bank of America said. Advantageous speech rates played into that comparative strength, it said.

While planetary question spending remains robust, astir Americans are inactive vacationing domestically: About 68% of each trips that commencement successful the U.S. stay wrong its borders, according to a recent analysis by the consulting steadfast McKinsey.

That said, "domestic request has softened slightly, arsenic American travelers instrumentality abroad," McKinsey wrote.

Higher-income households — those earning much than $125,000 a twelvemonth — look to beryllium driving the international-travel trend, according to Bank of America economists.

High-end luxury hotels person "outperformed" modular offerings this summer, suggesting precocious earners "are much resilient and proceed to splurge connected travel," the Bank of America study said.

While "cost-constrained" travelers look to beryllium disquieted by a pandemic-era spike successful inflation, astir program to proceed traveling, McKinsey said.

"Instead of canceling their trips, these consumers are adapting their behaviour by traveling during off-peak periods oregon booking question further successful advance," McKinsey wrote.