A new study commissioned by our parent company Amadeus found that consumers view travel as the highest priority discretionary spend category over the coming twelve months.
The study, Consumer Travel Spend Priorities 2022, received spending habit insights from 4,500 consumers from France, Germany, UK, US and Singapore.
International Travel is Top Priority
Specifically, international travel ranked as the highest discretionary spend area with 42% of respondents claiming it is a high priority spend area for the coming year.
Domestic travel came in second with 32% of respondents. Below is the breakdown of all six discretionary spend categories from the study.
- International travel - 42%
- Domestic travel - 32%
- Online subscriptions - 28%
- Eating out - 27%
- Fashion - 25%
- Big ticket items (Such as new car or home furnishings) - 20%
“This research clearly shows consumers are prepared to forego spending in other areas of their lives to accommodate travel this year."
According to Amadeus, On average, consumers estimate they will spend $2,670 on international travel over the next year. Comparatively, they estimated they spent in $2,780 in 2019.
“This research clearly shows consumers are prepared to forego spending in other areas of their lives to accommodate travel this year," said David Doctor, Executive Vice President, Payments, Amadeus.
Why Are Consumers Prioritizing Travel Spend?
As for why consumers are prioritizing travel spend, well, a single trend didn't appear. There are a number of motivating factors, including the challenges of the past few years; the build up of additional savings; having the ability to travel to see friends and family and the lifting of travel restrictions.
The percentage breakdown was as follows:
- The past few years have been challenging and I need a holiday - 38%
- Additional savings built-up during the pandemic - 34%
- The ability to travel to see family & friends - 33%
- The lifting of travel restrictions - 33%
The broad categorization for reasons to spend on travel is in line with Amadeus is seeing across its business as the leisure travel recovery accelerates.
Pay in Installments is a Desired Payment Option
The other striking finding from the study is in regards to payment options. Three quarters of respondents said they are more likely to choose a pay-by-installment option to fund travel over the coming year due to economic uncertainty.
The next closest flexible option to be "more likely" used in the next 12 months was payment via credit card. The full breakdown of desired flexible payment options is listed below:
- Pay in installments - 75%
- Credit card - 44%
- Payday loan - 26%
- Personal loan - 24%
"The industry will need to look for ways that fintech can make travel costs more transparent as well as help travelers manage their spend”
Other interesting payment findings from the study include:
- 73% of travelers say they are more likely to pay attention to FX fees and costs associated with international travel due to the current pressures on household budgets.
- 56% of travelers are more likely to choose a travel provider that lets them pay in their own currency, with transparent FX fees.
- 48% of travelers said they are now more likely to try pre-paid debit cards that hold multiple currencies, to avoid FX fees when paying abroad.
"The industry will need to look for ways that fintech can make travel costs more transparent as well as help travelers manage their spend,” said Doctor.