American Outbound Travel Aspirations Defy Inflation Concerns

01-09-23

• American Outbound Travel Aspirations Defy Inflation Concerns

The increase in travel intentions was a standout aspect of an otherwise lackluster report. This resilience underscores the enduring appeal of travel even amid broader economic fluctuations.

More than one-in-five Americans plan on vacationing in a foreign country in the near future, the highest share ever recorded, even as overall consumer confidence was dragged down by worsening inflation expectations in August.

Conference Board data published on Tuesday revealed that 21.8% of Americans intend on visiting a foreign country in the next six months, up from 17.7% in June. The economic research organization has asked households every other month since 1978 about their travel plans as part of its Consumer Confidence Index survey.

At 45.9%, the data showed the share of Americans with vacation plans of any sort at the second highest since the coronavirus pandemic decimated the tourism industry in early 2020.

The pickup in travel intentions stood out in a report that was otherwise weak, as August ended a recent surge in overall consumer confidence and fell from a near-two year high in July. The dip in confidence was largely driven by worsening anxiety about food and gas price inflation, leaving some economists to conclude that the persistent strength seen in consumer spending may soon founder.

The report also revealed concerns about the labor market, which was underscored by Labor Department data that showed the number of people quitting their jobs hit the lowest in nearly two-and-a-half years in July, indicating Americans were becoming less confident in the labor market.

But demand for travel remained unexpectedly strong, with no clear indication of abating. Twenty-four percent of Americans plan to travel by plane in the next six months, the survey showed, the second-highest share since the pandemic struck in March 2020.