Travel spending among American households continues to exceed pre-pandemic levels, driven largely by an increasing appetite for international trips, according to recent research by Bank of America.
“A key part of the ongoing travel momentum lies in vacationing abroad,” wrote Taylor Bowley and Joe Wadford, economists at the Bank of America Institute, in a report released on Wednesday.
While overall travel spending has dipped slightly compared to 2023, it remains significantly higher than in 2019, with a 10.6% increase per household, based on data from Bank of America credit and debit card transactions from January to mid-August. International travel, in particular, has emerged as a robust area of growth.
A Conference Board survey conducted in June revealed that about 17% of Americans plan to vacation abroad within the next six months, up from approximately 14% in 2018 and 2019.
The surge in international travel demand over the past two years can be attributed to waning COVID-19 concerns and the lifting of pandemic-era travel restrictions. As a result, many Americans, fueled by pent-up demand and accumulated savings, have eagerly spent on international trips.
Falling airfare prices have further supported this demand. For example, average round-trip fares to Europe—a top destination for U.S. tourists—dropped to around $950 this summer, down from over $1,000 in the previous two years. Flights to Rome during the fall shoulder season are now approximately $600, compared to a pandemic peak of about $1,300.
Europe accounted for 43% of Americans’ international travel spending from May to July, followed by Canada and Mexico at 21%. However, Asia has shown the fastest growth, with spending on the continent rising by 11% compared to 2023.
Despite the strong international travel spending, most American vacations remain domestic, with about 68% of trips staying within U.S. borders. However, domestic demand has softened as more Americans opt for international destinations.
High-income households, particularly those earning more than $125,000 annually, are leading the international travel trend. Luxury hotels have outperformed standard offerings this summer, indicating that affluent travelers continue to spend freely on travel despite economic concerns. While some cost-conscious travelers are adjusting by booking off-peak or planning trips further in advance, most Americans plan to continue traveling.
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