As the economic recovery took hold late last year, it was clear that travel was lagging the overall consumer spending recovery. The importance of vaccinations and feeling safe were key hurdles in the return to travel. Additionally, concerns about the economic outlook led some consumers to hold back spending on discretionary travel.
There are signs that major concerns among consumers continue to subside. As of July, our Prosper Analytics survey data indicated that while respondents were concerned about the economy getting worse, their concern was only slightly higher than the pre-pandemic levels.⁴ Consumer confidence as of June also reached its highest level since the onset of the pandemic last year, as consumers’ optimism about both current and future economic growth conditions improved markedly.⁵
Concern remains about contracting COVID-19 while traveling, but some of the pandemic related factors weighing on consumer psychology are beginning to wane. In the July Prosper Analytics survey, among those who indicated they do not have plans to travel, 58 percent cited catching COVID-19 as the primary factor. While still sizable, the share is down sharply from 71 percent in our April survey.⁴
With consumers’ concerns about traveling slowly subsiding, their intent to travel continues to accelerate. As of July, 50.2 percent of consumers indicated they felt comfortable traveling, up from 43 percent in our April survey.⁴ Not only are consumers willing to travel, but they are following through on their desire to travel with greater spending.
Given that some parts of the U.S. were hit harder than others by the pandemic-induced recession, consumers’ desire to travel varied across the U.S. as well. Using data from the Census weekly Pulse Survey, we identified the areas of the U.S. with the greatest share of respondents planning an overnight trip of more than 100 miles, including Wyoming, South Dakota, Utah, Montana and Idaho.⁶ Conversely, Hawaii, New Hampshire, Rhode Island, New Jersey and Maine had among the lowest share of respondents planning a trip.
With consumers feeling comfortable traveling once again, the bigger question is what kind of travel are they spending on? Not all types of travel are rebounding at the same rate. Air travel and amusement parks are recovering the fastest, while package tours and foreign travel remain at just 40 percent and 20 percent of their pre-recession levels, respectively, as of May.