SINGAPORE, 10 February 2023: Leisure travel takes the largest chunk of our annual discretionary spending budgets on par with dining but ahead of shopping, home improvements and entertainment, according to the latest Tripadvisor study, ‘An Economic Portrait of the Traveller’
The study’s executive summary states that despite rising prices, intent to travel is on par with 2019 levels. “Travellers want to go and are willing to spend to make it happen. One in five discretionary dollars goes toward travel, tied with restaurants as the top category for discretionary spending.”
Leisure trips and dining out each accounted for 19% of discretionary spending, higher than shopping (18%), home improvements (14%) or entertainment (13%).
Despite the global economic uncertainties, respondents are prepared to absorb higher costs to keep travelling, with 78% planning to spend the same amount on travel as last year.
Tripadvisor’s study conclusions are a good read for travel and hospitality suppliers. It’s music to their ears to read that while travellers are tightening their belts, 75% of those ready to reduce discretionary spending say they are avoiding cuts to travel plans. Almost all respondents (95%) said they would rather decrease spending on other categories to save for a future vacation.
Travel influences spending in categories
Over half (53%) of frequent travellers will spend more on travel in the next 12 months than they did in the past year, compared to 38% of occasional travellers. Compared to the average respondent, frequent travellers made purchases more consistently across every spending category, even accounting for income levels and budget.
The study shows that most travellers purchase from various categories when preparing for a trip. In addition to travel spending, they are likely to splurge on clothes (89%), luggage (72%), and electronics (62%). Importantly, these are not one-off purchases, with respondents buying these items at least two to three times in the past three years before travelling.
This mindset extends when they arrive at their destination, with 63% claiming shopping is an integral part of their travel budget and 62% agreeing that shopping is an important way to spend time while travelling.
Only 4% of travellers surveyed don’t usually shop during leisure trips, while 20% ranked shopping as the activity they spend the most on while travelling.
Those who travel more spend more
Frequent travellers (those planning three or more trips over the next 12 months) are especially enthusiastic consumers. This group plans more trips, but they typically spend more on accommodations per night than occasional travellers – 41% will book accommodations priced at over USD200/night, 71% higher than occasional travellers.
Over half (53%) of frequent travellers will spend more on travel in the next 12 months than they did in the past year, compared to 38% of occasional travellers.
Compared to the average respondent, frequent travellers made purchases more consistently across every spending category, even accounting for income levels and budget.
“Our report also reveals that, for the majority, travel is a non-negotiable expense. When travellers are at their destination, they’re generally ready to splurge on memories that will last forever. This willingness gives the traveller tremendous spending power,” said Tripadvisor GM/VP Global Media Business Christine Maguire.
In 2022, Tripadvsior conducted the analysis, surveying 4,959 consumers across six countries (the US, UK, Japan, Singapore, India, and Australia)to understand current travel demand and what it means for travel enterprises. The wide-ranging international sentiment study examines the purchasing behaviour of travellers and the influence their spending has across industries.
Tripadvisor’s latest research study – An Economic Portrait of the Traveler.
The full report can be found downloaded here