Dive Brief:
- Due to the current uncertain economic climate and inflation concerns, U.S. consumer spending behavior has shown contradictory patterns, according to the latest survey from McKinsey.
- Consumers are showing a willingness to splurge, even as they switch brands and retailers in search of lower prices, resulting in a “spending dichotomy.”
- McKinsey found that U.S. consumers are prioritizing travel, though, making it one of the fastest-growing spend areas year over year, supporting other findings from recent studies and earnings reports that show travel spend is up.
Dive Insight:
According to the results of McKinsey & Company’s latest US Consumer Pulse Survey, consumers are still willing to splurge on travel, despite economic uncertainty and concerns over saving.
The report finds that travel spend is up 6%, even when adjusted for inflation, and is one of the top categories that consumers — namely older and higher-income — plan to splurge on. The survey included responses collected from 3,973 adults in the U.S. over the period of Feb. 24 to March 1.
As other findings have shown, U.S. consumers are using more of their discretionary funds toward travel plans, resulting in a shift from the “homebody economy,” as McKinsey calls it, back to an experience economy.
During Wyndham’s recent earnings call, CEO Geoff Ballotti said that 93% of the hotel brand’s guests are planning a trip in the next six months — an all-time high. “We do believe that leisure travel will defy any economic gravity that might be out there,” he added. American Express also reported that its credit card members were ramping up their travel spending, with millennial and Gen Z consumers driving the growth.
Although inflation rates have increased in recent years, the McKinsey survey respondents show a “consistent willingness to treat themselves, with 40 percent saying they’re eager to spend in the coming year.”
