- 63% of Gen Z plan to travel this summer, despite feelings of financial instability
- High travel costs won’t hold 46% of Gen Z back from traveling this summer and many are willing to take on debt for it
- Vacations seen on social media influence Gen Z to spend money they don’t have on travel (38%)
As consumers prepare for their summer vacations, it’s likely many will experience sticker shock when it comes to the total cost of the experience, especially with travel prices on the rise and the demand for travel at pre-pandemic levels. However, increased prices might not be enough to hold consumers back from taking a vacation this year – especially younger folks.
According to a new study conducted by Qualtrics on behalf of Intuit Credit Karma, 69% of millennials and 63% of Gen Z say they plan to travel this summer and many will do so despite high travel prices. In fact, more than half of millennial respondents say they will take a vacation this summer even if travel prices are higher than usual (51%), along with 46% of Gen Z.
Consumer travel plans may be influenced by social media
An influx in the number of flashy vacations posted on social media could be driving such desperate spending behaviors among young hopeful travelers – and who could blame them. According to the study, 38% of Gen Z and 28% of millennials say they’ve been influenced to spend money they don’t have on travel after seeing other people’s vacations on social media. That’s far more than the amount of Gen X and Boomers+ who report falling into the same trap, 15% and 7% respectively.
This trend appears to be an extension of FOMO spending, which is when consumers spend money they don’t have out of a fear of missing out (FOMO). According to the study, more than three-quarters of Gen Z respondents (76%) admit to going into debt as a result of FOMO, along with 69% of millennials. For Gen Z who have gone into debt as a result of FOMO, 40% have done so to dine out, 34% take part in vacations and birthday celebrations and 31% attend a concert(s).
What lengths would consumers go to travel this summer?
Among Gen Z respondents who plan to travel this summer or are unsure of their travel plans, half say they’re willing to sacrifice dining out and meal delivery (50%), shopping for things like clothing or electronics (47%), and regular coffees out (44%) to pay for their travel. More than that, Gen Z respondents who plan to travel or are unsure of their travel plans say they’re willing to take on an additional job (35%) or sell personal items (34%) to pay for travel. More concerning, however, nearly one-in-five of them say they’re willing to give up necessities to pay for travel this summer (19%).
Outside of dining out (49%) and shopping (43%), 39% of millennial respondents who plan to travel or are unsure of their travel plans say they’re also willing to give up experiences, including sporting events and concerts, to pay for their travel this summer.
Social influence could lead to debt for many young Americans
Spending money might not be the wisest move for summer travelers – especially those who may be struggling financially. This is the case for nearly a third of Americans (30%), including 39% of Gen Z and 33% of millennials, who say they do not feel financially stable right now. As a result, it’s possible many will be forced to rely on credit to finance their travel.
More than three quarters of Gen Z (76%) and millennial respondents (83%) who plan to travel or are unsure of their travel plans, say they are willing to take on debt to finance their travel this summer. Of those who are willing to take on debt for travel this summer, more than a third of Gen Z (34%) plan to take on $500 or more in debt, along with nearly half of millennials (48%). Others plan to use savings, or even borrow money from family or friends to pay for travel. In fact more than a quarter of Gen Z (26%) will rely on family or friends to help pay for their travel this summer.
Insert quote from Courtney
“Travel prices are on the rise, yet it’s not impacting demand, despite the fact many consumers – in particular Gen Z – are struggling to keep up with their finances,” said Courtney Alev, consumer financial advocate at Credit Karma. “Making matters worse, many of us are flooded with content on our social media feeds of people on lavish vacations, which only increases our desire to travel. At the same time it gives us this sense of attainability that might not be realistic when it comes to our actual budgets. That’s what we’re seeing in this study: young folks are being influenced by what they’re seeing on social media, which is driving them to spend money they don’t have to replicate the vacations they’re seeing online. This can be a slippery slope for those who are already falling behind financially. If you’re thinking of taking a vacation this summer, do your best to plan ahead and stick to a budget.”
Methodology
This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma between May 8, 2023 and May 9, 2023 among 1,009 adults ages 18 and older.