By Alec Sills-Trausch | Wealth of Geeks
While many Americans start their summer trip plans as early as Memorial Day, a recent Bankrate survey reports that 47% will skip any type of summer vacation. And for the ones who do go, more than 1 in 3 will go into debt to pay for it.
Who Is and Isn’t Traveling
A generation often worried about their finances, Gen Xers are the most likely to avoid travel this summer. 67% of those surveyed say they can’t afford to go anywhere. Most millennials and boomers agree; they can’t afford to travel, either. About 53% of Gen Z say they don’t have the funding to take a trip.
However, affordability isn’t the only reason people aren’t traveling. About 24% of the respondents say they just weren’t interested in traveling this summer, 13% can’t travel due to health problems, and 11% say travel is too chaotic right now. Others responded that family and work obligations keep them at home.
Crowds are also problematic. One percent of respondents admit they won’t travel because their preferred destination is too crowded.
Many of those who are traveling in spite of the costs say they’ll use plastic to fund their trips. About 47% of traveling millennials don’t mind going into debt to pay for it, while 42% of Gen Z say they’ll heat up their credit cards for their vacation.
Where Are People Going This Summer?
According to American Express, 67% of millennials and Gen Z will travel to a big sporting event this summer. Some will head to Paris for the 2024 Summer Olympics, but MSN reports Taylor Swift’s Eras European tour is drawing five times as many U.S. travelers as the thirty-third Olympiad.
TravelAge West reports searches for Paris travel are up for Memorial Day but drop after that. However, searches for Rome have increased by 34% from 2023, and Tokyo searches are up by 45%.
True to form, Gen Z focuses on travel experiences. TravelAge West reveals that youngsters search for road trips they can take with friends, with Jasper, Canada, as a leading destination.
Orlando, Seattle, and Boston have the most flight bookings, according to TravelPulse, and domestic flights still make up the majority of itineraries. American Express reports that more Gen Z and millennials are considering solo trips this summer.
Solo travelers choose their preferred destinations and are not locked into a particular itinerary. They can make the trip into the experience they want to have. These groups are also the most likely to book major trips, like a cruise to the Galapagos Islands or a gorilla sighting expedition in Uganda.
“I’m headed to Spain!” Tiffany McCauley with Slappy Toad says, “Inflation won’t stop me, but it will alter how I travel. I’m seriously looking at dog-friendly hostels instead of hotels or Airbnbs, so my pup can go with me.”
Paying for Travel
Travelers who don’t have the cash or time to take a longer vacation still have options. Staycations are a popular choice for many who need a break but must stay close to home. This group can opt for a weekend staycation in their own town or a nearby city.
Staycationers can search their state’s travel websites to find attractions they haven’t visited and may not even know about. If they want a short road trip, they should set a maximum distance to travel — say, no more than 50 miles from home — and look for accommodations, restaurants, and attractions within that radius. They may even decide to stay at a nicer hotel than they normally would since they won’t be staying as long.
Travelers who finance their trips with credit cards should look into travel credit cards. These cards offer several perks, like cashback rewards, points for hotel stays and flights, and even access to some airport lounges. Some feature a 0% interest rate for a certain number of months, which is fine if the person can pay off their balance in full during that time. The downside is these cards usually require good to excellent credit and may have high annual fees. Travelers should shop around to find the card that best fits their needs and travel style.
Some people aren’t interested in using credit cards or don’t have credit scores that are high enough for approval to use a card. The “ Buy Now, Pay Later ” (BNPL) method is a new take on an old concept and helps people pay for big-ticket items like travel. This is a short-term, often zero interest loan people can get from companies like Affirm or Klarna. The advantages are that the user’s credit score doesn’t take a hit unless they start missing payments, and they may not have to pay interest fees, depending on the plan they choose. These companies may charge as much as 20% interest, which is still lower than the interest rates on many credit cards.
The payment schedules can be strict for these plans, so those who consider this method of paying for their trips need to understand all the loan terms before they apply. Also, since BNPL loans don’t appear on someone’s credit report, users with lower credit scores can’t use this method to improve their credit rating.
Travelers can also find ways to save money while on vacation. You can stay in a cheaper hotel, eat at local places where the food isn’t as expensive, and visit less-crowded areas that haven’t raised their prices for tourists. Consider the price of souvenirs and plan to cut costs there, too. Postcards are inexpensive, and taking photos is free.
McCauley agrees. “I’m also planning on public transportation instead of renting a car, and I will most likely shop at food markets more than I eat in restaurants.”
As enticing as summer travel is, it’s a lot like holiday spending: it feels good in the moment, but the feeling fades when the bills come due. Travelers should consider whether it’s worth going into debt for the experience of the trip.
This article was produced by Media Decision and syndicated by Wealth of Geeks.
