Move over families, the Gen Z demographic is making a significant impact on summer vacation plans this year. Recent surveys indicate that Gen Z travelers are not only increasing their vacation frequency but also outspending older generations. It’s no longer about simple road trips to visit the parents, as Gen Z individuals are now looking into international destinations at a much higher rate compared to other age groups. A report released by Bank of America highlighted the trend, showing that Gen Z travelers are opting for longer, more extravagant vacations in 2023.
According to a report by the market services firm PMG, Gen Z and millennials are leading the surge in travel spending this year. The survey, which included participants from the United States, United Kingdom, India, Germany, and China, revealed that 65% of Gen Z individuals and 72% of millennials plan to spend more on leisure travel this year. The percentage is significantly higher than the 54% of Gen Xers and 40% of baby boomers who expressed similar intentions. This shift in travel spending behavior marks a notable departure from traditional trends in vacation habits.
While Gen Z travelers are more inclined to embrace travel experiences, their approach to funding these trips differs from other age groups. A study conducted by the research company Morning Consult showed that the number of Gen Z individuals relying on savings for travel has decreased since 2023. Despite this decline, Gen Z travelers continue to forge ahead with their vacation plans. Lindsey Roeschke, Morning Consult’s travel and hospitality analyst, highlighted the impact of external factors on Gen Z’s travel behaviors.
Interestingly, a significant portion of Gen Z and millennial travelers are open to using debt as a means to finance their summer trips. Data from a survey by Bankrate revealed that 42% of Gen Z individuals and 47% of millennials plan to incorporate debt into their travel expenditure. Popular methods of financing summer vacations include credit cards paid over multiple months, “buy now, pay later” services, borrowing from family and friends, and personal loans. This debt-centric approach has sparked concerns among financial experts, as the implications of carrying debt for discretionary purchases like vacations could be problematic.
Despite facing financial challenges, Gen Z travelers are determined to make the most of their vacation experiences. Research indicates that approximately 24% of Gen Z individuals feel pressured by friends to take trips that may strain their financial resources. Additionally, concerns about personal finances, the broader economy, and climate change weigh heavily on Gen Z travelers’ minds. Despite these apprehensions, Gen Z travelers remain resilient in their pursuit of travel experiences.
The travel landscape is evolving, with Gen Z travelers driving significant changes in vacation spending habits. As this demographic continues to prioritize experiences and travel over traditional financial constraints, the industry may witness a shift towards more adventurous and debt-incurring travel behaviors. It is essential for Gen Z individuals and financial institutions to strike a balance between fulfilling travel aspirations and maintaining financial stability in the long run. The rise of Gen Z travelers signifies a new era of vacation spending that emphasizes experiences, creativity, and adaptability in the face of financial challenges.