Move on family travelers.
Gen Z is expected to make a splash this summer, with surveys showing they are upgrading their vacation plans and spending more than older travelers.
No longer content with road trips to their parents’ homes, Generation Z is planning international trips at a higher rate than other generations, according to a report released by Bank of America on May 20.
The survey of more than 2,000 Americans showed that Gen Z plans to travel longer and also take more expensive vacations at higher rates.
Ready to spend
Generation Z, along with millennials, are driving a surge in travel spending this year, according to a report released in April by merchant services company PMG.
This report, which surveyed 1,800 adults in the US, UK, India, Germany and China, shows that 65% of Gen Z and 72% of millennials said they planned to spend more in leisure travel this year, well ahead of 54%. of Generation X and 40% of baby boomers who said the same thing.
But the way Generation Z – often defined as people born between 1997 and 2012 – plans to finance their travel also differs from other age groups.
The number of Gen Zers who say they travel because they have the savings has declined since August 2023, according to a new report from research firm Morning Consult.
But that’s not stopping them, said Lindsey Roeschke, Morning Consult travel and hospitality analyst and author of the report.
“Gen Z came of age during an incredibly turbulent time,” Roeschke said. “This has a profound impact on their travel behaviors.”
“Why would they delay traveling to where they really want to go for the sake of saving money, when there could be another pandemic, financial crisis, war or other major event that could prevent them from getting there? ” she told CNBC.
Roeschke also noted that Gen Z will spend time finding ways to reduce travel costs, rather than canceling or postponing their trips.
“They are looking for ways to compromise and save money. This could involve traveling during shoulder season, using apps and other technology to compare prices, cashing in card points credit, swap into other areas of spending or acquire one to finance their travels,” she told CNBC.
Using debt to finance summer travel
Still, 42% of Gen Z and 47% of millennials say they are considering using debt to finance summer travel, according to a survey by financial services company Bankrate.
The report shows that the most popular methods of financing summer vacation travel include:
- credit cards paid over several months – 26%
- “Buy now, pay later” services – 8%
- borrowing from family and friends – 6%
- personal loans – 5%
This debt-damning mentality worries older generations, who tend to travel less ambitiously in their 20s, if at all, and raises eyebrows among financial experts, like Ted Rossman, senior analyst at Bankrate.
“I don’t want to tell people they can’t have fun, but I worry about going into debt for discretionary purchases such as vacations, especially with credit card balances and rates at record lows “Rossman said in the report.
Roeschke noted that travel-happy Gen Zers don’t necessarily feel optimistic about their finances. Nearly a quarter (24%) said they feel pressured by friends to take trips they can’t afford, according to research released in May by financial services company Empower.
Compared to other adults, Gen Zers are more likely to say their own finances, the overall economy and climate change negatively affect their willingness to travel, according to Morning Consult.
“However…they still do it!” » said Roeschke.
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