Average Amount Spent on Vacations by Americans, 2010 v. 2020
This report provides an overview of American travel spending over time, with a special focus on the impact of the COVID-19 pandemic on expense spending. Part (A) includes a comparison between spending in 2010 and 2020 and notes how the years may be similar as a result of the crisis. Part (B) analyses how the pandemic is affecting different expense categories. Part (C) provides insights on where Americans will be taking their vacations this year, finding that rural, local destinations will be most popular.
Part (A): This section consists of an historical analysis that compares the average spend of Americans on vacation in 2010 and 2020. While exact or anticipatory numbers from 2020 were not available by category, overall increases in each category were used (showing a 48.7 percent increase) and paired with the anticipated decreased spending as a result of COVID-19 (with 65 percent of Americans reducing their budgets by 45 percent or more) to illustrate that spending in 2020 could be similar to or worse than 2010.
Average Vacation Spend by Americans in 2010
- The 2008 recession affected spending on vacations by Americans by reducing it for the following two years. In 2008, Americans spent $1,411 per vacation.
- In 2010, the average American spent $1,300 on their vacation, according to the Bureau of Labor and Statistics.
- Of that $1,300, the expense categories are broken down as follows:
- In the category of food and beverages, the highest amount ($223) was spent on dining out ("food away from home"), followed by both food prepared by the consumer while out of town and alcoholic beverages at $43.
- In the category of transportation, the highest amount ($325) was spent on airfare, followed by train, bus, and ship fare ($65) and car and truck rental ($26).
Anticipated Average Vacation Spend by Americans in 2020
- The amount forecast that Americans would spend on travel in 2020 ($1,004 billion) was up from 2019 ($970 billion) in Fall of 2019.
- Total domestic expenditures have been steadily increasing between 2010-2019 by a total of 48.7 percent.
- Assuming 2020 followed a similar trend and rose by the average of 4.87 percent, the amount of increase from 2010-2020 would be 53.57 percent prior to the COVID-19 pandemic.
- With COVID-19 taken into account, 65 percent of Americans will reduce their spending in these categories by 45 percent or more.
- Put another way, the impact of COVID-19 will remove nearly all gains in expense spending between 2010-2020 (53.57 percent).
To determine how much expense spending has increased from 2010-2019, the increases from each year were added up as follows:
6.7 + 8.1 + 4.5 + 3.2 + 5.4 + 2.8 + 2.9 + 5.2 + 5.5 + 4.4 = 48.7 percent
The total was also divided by 10 to find the average increase, as follows:
48.7 / 10 = 4.87 percent
The total and the average were added together to find the anticipated increase from 2010-2020:
48.7 + 4.87 percent = 53.57 percent
Part (B): This section provides an overview on the impact of the COVID-19 pandemic on anticipated vacation spend by Americans in 2020 in different categories.
The Impact of COVID-19 on Vacation Spending
- Families are concerned about enclosed public environments, and are leaning away from traveling by air where possible. Southwest Airlines anticipates filling up to 45 percent of its seats in June and CEO Gary Kelly says it has "decent bookings" for July.
- Families are also wary of staying in hotels while making long trips by car, indicating that roadside and highway hotels will have decreased business.
- Low airfare costs are drawing bargain hunters who are looking for other deals to pair with their plane tickets.
- Travel agencies are anticipating a large increase in the bookings of private homes and villas and a decrease in resort bookings.
- Vacation unit rentals have increased by 6 percent in 2020 over 2019, according to InsureMyTrip.
- Travel insurance is expected to be taken by up to 30 percent of travelers, compared to 15 percent previously.
- Travel advisors have become viewed as essential due to their ability to get through to airlines and secure transportation.
- Only 33 percent of Americans said they would be willing to stay in a hotel within 3 months after the COVID-19 curve flattens.
- Only 28 percent of Americans will be willing to fly within 3 months of the COVID-19 curve flattening.
- The cruise industry is most affected with 22 percent of Americans willing to take a cruise within 6 months of the COVID-19 curve flattening.
Part (C): This section shares insights on where Americans are planning to vacation in 2020 in light of the COVID-19 pandemic. Americans are looking forward to making domestic, local travel plans that avoid major cities and enable them to continue social distancing practices where they can. States that restrict whether hospitality services can be open will be less popular, but states that have high case counts of COVID-19 as a result of loose restrictions will also be less popular.
Americans will be Traveling Domestically Rather than Internationally
Based on these findings, destinations that cater to the appeal of the domestic American spirit could have marketing success.
- Americans are wary of how COVID-19 is being handled in different countries and it is affecting travel plans.
- 44 percent of Americans surveyed said they would be switching their plans for a 2020 international vacation to a domestic vacation instead.
- InsureMyTrip is finding that the top draw for bookings is the continental United States. However, Hawaii and the Caribbean are also rising in popularity.
- "Family camping trips" is a leading search phrase for marketers over previous phrases such as "hotel in Paris" or "flight to London."
- Crisis situations such as after 9/11 prompted American travelers to take domestic trips rather than international ones, and the COVID-19 pandemic is anticipated to have a similar effect.
Americans will be Traveling Locally and Rurally
Based on these findings, destinations should cater to local and regional visitors with a message of social distancing opportunities.
- City boat tours are expected to be more popular than upscale dinner cruises as a result of local and regional visitors staying closer to home.
- The big cities in general will not be popular in general, however, as tourists seek to escape large crowds.
- National parks around the U.S. are a popular search option for travelers planning their trips now.
- Rural areas close to metropolitan areas, such as Cape Cod and the Adirondack Mountains, are popular options seeing an increase.
- Activities that contribute to social distancing, such as camping and outdoor recreational activities, are on the rise for trip pairings.
- Long-term stays in remote locations, such as a month in an AirBnB location, are becoming more common.
- Outings close to home will be the most popular initially as COVID-19 restrictions ease and people take on opportunities to meet with friends in local places.
State by State Restrictions will Impact Travel Plans
Based on these findings, destinations located in states that have high restrictions should promote the restrictions as a sign of public safety. Destinations in states with fewer restrictions can promote the availability of options and activities.
- Some states have fewer restrictions on what businesses can be open while COVID-19 continues to be a pandemic, and that will impact travel plans on a state by state basis.
- New York has stricter restrictions on social distancing for the hospitality business, and that will slow its tourism.
- California has stricter restrictions that limit what hospitality businesses can be open, and that will slow its tourism.
- Florida has fewer restrictions on the hospitality industry, and that will improve its tourism.
- States that reopen but then have a resurgence in COVID-19 occurrences, such as Georgia, could drive tourism away by their high number of cases.