U.S. Consumers Prepare to Spend Big on Summer Travel

Persistently high inflation may present some headwinds for U.S. consumers gearing up for summer 2024, but many Americans are still booking vacations, as well as buying tickets to music festivals and major sports events.

“American consumers tend to increase vacation, leisure, and entertainment spending in the summer, taking advantage of warmer weather and school schedules for families,” Kristina Sargent, Assistant Professor of Economics at Middlebury College in Vermont, told “This Is Capitalism”.

According to the 2024 Tripadvisor Summer Travel Index announced in May, 92% of U.S. respondents intend to spend at least as much money as they did in 2023 on travel; 26% intend to spend at least $5,000 on travel; 55% intend to travel for longer and farther from home; and 44% intend to take more trips.

Travel for Memorial Day weekend – the unofficial kick off to summer festivities – was estimated to be up some 15% from 2019. Here’s a breakdown of what U.S. consumers are planning, where they may be headed, and why this summer.

Taking Flight

NerdWallet’s annual summer travel survey, released in March, found that 88% of respondents plan to spend at least one night away from home this summer; 20% plan to pay for travel expenses with credit cards; and 42% plan to save money by driving instead of flying to their destination.

Whether consumers choose to drive to their destinations or take flights will largely depend on gas prices, which are usually higher in the summer due to increased demand, assuming no supply-side shocks, according to Sargent. Consumers should expect businesses to continue experimenting with dynamic and surge pricing strategies this summer, although perhaps without branding them as such to avoid consumer backlash.

The U.S. Transportation Security Administration has started preparing for record airport traffic from Memorial Day weekend through Labor Day weekend. The TSA recently spread the word with a series of national and local press releases touting its actions.

It anticipates screening more than 18 million passengers and crew from May 23 to May 29 alone. That would be a checkpoint volume increase of approximately 6.4% over the same period in 2023. The TSA forecasts that it will screen more than 3 million passengers nationwide in a single day sometime this summer. It came close to hitting that number on Friday, May 24, with more than 2.9 million passengers screened – a record for the agency.

As part of the preparations, several airports have installed Computed Tomography (CT) units in order to enhance scanning and threat detection capabilities for carry-on bags. CT units enable security officers to review a 3D image of bags while reducing the need to physically search inside the bags. As of May 16, the TSA had deployed a total of 2,050 Credential Authentication Technology (CAT) units to 223 airports. CAT units confirm passenger identification credentials along with their photo identification credential, flight details and pre-screening status.

Tripadvisor found that the top destinations for U.S. travelers were Cancun when traveling abroad and Las Vegas when traveling domestically. Internationally, other top 10 spots included London, Paris, Rome, Barcelona, and Punta Cana in the Dominican Republic. Domestically, other top 10 spots included Orlando, Honolulu, New York, Chicago, and San Diego. Paris and Chicago may be looking at increased popularity this summer as they will host the Summer Olympic and the Democratic National Convention, respectively.

Airbnb reported that summer trends for its customers feature searches for places with outdoor amenities where they can spread out and spend time by the water, as well as places with physical activities for adults and kids.

Summer is the peak season for visiting U.S. National Parks, with July as the most popular month of the year. KOA Campgrounds and US Park Pass, two companies that provide packages for visiting nature areas across the country, note that some of the go-to attractions, such as Yosemite, require reservations due to potential overcrowding.

Lynn Farrell, President of Windy City Travel in Chicago, noted several popular destinations for her summer clients, who are showing increased demand for international travel.

Internationally, Italy and Greece top the list. In Italy, she often books travelers to Rome, Florence, the Amalfi Coast, Venice, and Lake Como. In Greece, it’s Athens, Mykonos, and Santorini. Domestically, Farrell’s summer clients favor the national parks; glamping – glamorous camping – at places such as The Ranch at Rock Creek in Montana; and the ultra-luxurious Sheldon Chalet in Alaska, which can cost $23,000 per night.

Music Festivals

Huge summer music festivals, known for gathering crowds who spend millions of dollars on everything from tickets to food to merchandise, are an annual economic boon in certain areas of the U.S. Three of the most popular are Summerfest, Burning Man, and Lollapalooza.

Summerfest, presented by American Family Insurance, is held in Milwaukee. This year, it will be held for nine days between June 20 and July 6. Last year, the 55th year of the festival had a total economic impact of $160.3 million for the city and supported 3,400 full-time and part-time jobs. Summerfest 2023 generated $188.7 million in economic impact for the state of Wisconsin. Its attendance was 624,407 people, up 40.1% from 2022 but still below the pre-pandemic 2019 high of 718,144.

Chicago’s Lollapalooza festival will be held August 1 to August 4. Its sponsors range from Chase Sapphire to Bud Light. Lollapalooza attracts approximately 400,000 people to the city each year, and had a $422 million economic impact for Chicago. Kidzapalooza, which premiered last year, also will return. In 2023 it included a family-friendly lineup of performers and space for children to play with crafts, interactive games, and hammocks.

Adventure seekers have turned Burning Man into a near-pilgrimage in the Black Rock Desert of northwestern Nevada. This year, the festival, which emphasizes "community, art, self-expression, and self-reliance," will be held from August 25 to Sept. 2 in what Burning Man calls Black Rock City LLC – a temporary city built by attendees. It generates at least $60 million annually for northern Nevada and brings in more than 70,000 people. Last year’s heavy rain and mud created safety and sanitation problems; it’s unclear whether the faithful will be dissuaded by the memory.

Sports Events

Global and national sports events traditionally draw hordes of fans, but the economic impact varies. The upcoming major summer sports events of 2024 include the Paris Summer Olympics, the U.S. Open in New York, and the MLB All-Star Game in Arlington, Texas.

The last two Summer Olympics were unprofitable. The 2016 games in Rio de Janeiro, Brazil, resulted in a $2 billion direct loss, due to poor planning and heavy corruption. The 2020 Tokyo Games in Japan resulted in an $800 million direct loss, largely due to COVID-19. But the Paris Games are on target for a small direct profit after the $9.7 billion cost, and France could bring in as much as $12.2 billion due to related commerce, according to the International Olympic Committee. Approximately 10,500 athletes and millions of spectators will attend from July 26 to August 11.

The U.S. Open Tennis Championships will be held from August 26 to Sept. 8. In 2023, the U.S. Open attracted 957,387 fans, setting an attendance record and showing a nearly 8% increase over 2022. Both the men’s and women’s championships sessions had their highest attendances ever. Ticket prices ranged from $28 to $2,385. A 2013 study found that the U.S. Open generated $750 million in economic impact to the New York City area, and last year U.S. Tennis Association CEO Lewis Sherr estimated that figure would be double that amount in 2023.

From July 12 to July 16, the MLB All-Star Week will bring baseball’s best to northern Texas. It begins with the All-Star Commissioner’s Cup and the Jennie Finch Classic youth baseball and softball games, and culminates in the All-Star Game. Approximately 600 part-time workers are expected to be hired. Last year’s All-Star Week, in Seattle, was estimated to generate more than $50 million in economic impact and to bring in more than 100,000 fans to the city.