Traveling During a Recession
If you’re like anyone else, you’ve recognized that prices on nearly everything have significantly increased over the past year.
While we still have no choice but to purchase necessities like gas and food at higher prices, it would seem like other more discretionary items like vacations are the first to go when reviewing our budgets.
Even still, expert reports appear to be going back and forth on the issue of inflation and how American travelers seem to be responding to it. So, you can continue reading below as we discuss the effects that economic recessions can have on travel for leisure.
Is Travel a Priority for Americans?
To dive deeper into whether or not the looming recession will impact how we travel, let’s take a look at a recent study done by Destination Analysts at the end of last year.
They found that 54.4% of Americans viewed travel as either ‘extremely high’, ‘high’, or ‘somewhat high’ on their budget priority in the following three months. Less than a quarter of those surveyed said that travel was not a priority.
Later in the study, they found that 74.8% of participants said that they believe travel is a ‘worthwhile’ investment, even if the economy sees a downturn. Even international travel is slated to grow by 30% in 2023, though still below pre-pandemic levels.
So, it’s clear from this study that Americans have not been turned away from their travel plans, even amid rising prices and recessionary fears.
While the surveys show that many Americans are still willing to shell out for leisure travel at this point, historical data suggests a different outcome.
Travel and tourism is a sector that usually takes a hit during recessions when money is tight. In 2008, during the last major global recession, air travel took a hit by about -20%, or the largest drop ever recorded at the time.
Similarly, the New York Times reported on the faltering occupancy rates at mid- and high-level hotels during this period, certainly feeling the effects of a shrinking economy.
Though it may seem counterintuitive, some experts point out that traveling in 2023 could get even more affordable. This is because a recession could bring about lower rates on airfare and hotels, making travel more accessible to a large swath of the population.
About 1 out of 20 workers in the US rely on travel and tourism as their way of life. So, these positive indicators about 2023 travel may provide some relief in the face of the unprecedented impacts on the industry that were caused by the pandemic in recent years.
So, it appears as if the Americans that have the means will continue on with their travel plans this year, even as inflation and staffing shortages persist across the economy.
–Written by Bailey Schramm in partnership with Checkworks personal and business checks.