Travel Resilience: Why Vacations Remain a Priority Despite Economic Headwinds

"A secular trend that we see, people are seeking services and experiences and travel is the top of the list."

This quote from the CEO of MasterCard Michael Miebach, which processes ~24% of global card payments, occurred on their earnings call in May.

Despite tightening household budgets, consumers worldwide continue to prioritise travel, underscoring the enduring appeal of vacations and the human desire for new experiences.

Tripadvisor's Summer Travel Index reveals such resilience: 

• 95% of respondents plan to travel as much (51%) or more (44%) than last summer

• 26% of Americans planning to spend at least $5,000 on trips

This trend is not unique to the current economic climate; history has shown that travel demand has defied expectations during periods prior downturns.

Lessons from Past Recessions

• Dot Com (00-01): the travel industry experienced a temporary dip but quickly rebounded.

• GFC (08-09): Despite house prices falling meaningfully and the S&P 500 dropping 30%, domestic leisure travel fell only 1.9% in 2009.

These historical examples highlight a fundamental truth about human behaviour: the desire for new experiences, relaxation, and memory-making transcends economic cycles.

The industry has demonstrated its ability to bounce back, driven by people's insatiable curiosity and yearning for new adventures.

In recent weeks, the CEO of Booking Holdings said, "we continue to see resiliency in global leisure travel demand, including healthy growth for travel on the books that's scheduled to take place during our peak summer travel season."

Booking Holdings books ~1.2 billion rooms each year.

What memories will you create on your next holiday?

This is not investment advice. See our disclosures here