Anticipated Surge in American Travel Expenditure for Summer

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This past weekend, millions of Americans marked the beginning of summer 2024 by traveling, hitting the road, firing up the grill, and taking a dip in the pool. Analysts predict that the Memorial Day weekend will kick off another season of robust consumer spending on travel and recreational activities.

The season is off to a strong start. The Transportation Security Administration reported Thursday as its second-busiest day at airports ever. They also mentioned that five of the top 10 busiest days occurred this month. Earlier this month, AAA predicted that 43.8 million Americans would be driving at least 50 miles this weekend, a 4% increase from last year and close to the all-time record set in 2005.

In a statement, Paula Twidale, senior vice president at AAA Travel, expressed surprise at the Memorial Day weekend travel numbers. She stated that it has been almost 20 years since they have seen such high travel figures.

Royal Caribbean exceeded expectations in their first-quarter earnings, attributing their success to solid bookings and increased spending by passengers while onboard. During an earnings call, company executives expressed optimism for the rest of the year.

Travelers make their way through the Miami International Airport on May 24, 2024, in Miami, Florida.

Travelers make their way through the Miami International Airport on May 24, 2024, in Miami, Florida.

Joe Raedle/Getty Images

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Inflation isn’t keeping Americans from having fun this Memorial Day weekend

If this trend continues during the summer, it will result in good income for leisure businesses like Royal Caribbean, hotels, restaurants, and theme parks. This will also help boost the economy of cities with a strong tourism industry.

A recent analysis from the Bank of America Institute predicts that this will indeed happen.

During a virtual presentation to reporters, the bank's analysts shared that the outlook for leisure spending this summer appears positive. This conclusion was drawn from analyzing trends in the bank's card data, survey results from 2,010 respondents, and other resources within the bank. While spending this summer is expected to be slightly lower than last year, it is still anticipated to be robust.

David Tinsley, senior economist at the Bank of America Institute, expressed confidence in the data, stating that it indicates a solid summer ahead.

According to a survey conducted by the bank, 72% of people are looking forward to traveling, with 36% having already planned their trips. Interestingly, the survey also revealed that more younger Americans are interested in taking international trips compared to older generations. They are also planning longer trips and are willing to spend more money.

Between January and April, households using a Bank of America card spent the most on purchases in countries like Japan, South Korea, Switzerland, Colombia, and Costa Rica. In April, the majority of in-person international spending through Bank of America was in Europe (32%), followed by Canada and Mexico (23%), and then the Caribbean (13%).

Recently, California and Florida have seen an increase in restaurant spending. In California, spending rose by over 5% in the first four months compared to the same period last year, while in Florida it remained mostly flat. However, when compared to 2019, both states have experienced a roughly 15% increase in restaurant spending.

Even for those earning less than $75,000 a year, more than 60% are planning to travel this summer. This number jumps to over 80% for respondents earning more than $150,000 a year.

But the good times may not last forever. Americans are facing increasing pressure as household debt continues to rise and delinquencies are on the rise, according to data from the New York Fed.

"In the first quarter of 2024, credit card and auto loan transition rates into serious delinquency continued to rise across all age groups," stated Joelle Scally, a regional economic principal at the New York Fed's Household and Public Policy Research Division. Inflation is still affecting people's budgets and interest rates remain at a two-decade high.

Economists are not predicting a recession for this year, but they believe the economy will slow down in the next 12 months. The most recent data on employment showed weaker results than anticipated. For some, this summer's spending spree may be the final celebration before a slowdown.

The dog that was the inspiration behind Dogecoin has passed away.

Kabosu, the beloved dog behind countless "doge" memes, passed away as announced by her owner on Friday.

Atsuko Sato shared in a blogpost that the Japanese Shiba Inu peacefully entered eternal rest on Friday morning at the age of 18.

In the Japanese city of Sakura, kindergarten teacher Sato wrote about a beautiful morning where birds were singing outside the window. Sadly, as Sato was touching her, his beloved dog gently passed away. He believes she was the happiest dog in the world.

Back in 2010, Kabosu, the adorable dog, became famous on the internet. A photo of her posing with folded paws and a curious expression went viral on forums like Reddit, making her one of the most recognizable animals online.

The rise of "doge" memes began with a playful misspelling of the word "dog," leading internet users to create images of Kabosu's face on various objects and animals. This trend quickly spread across the internet.

In December 2013, the popularity of "doge" memes reached new heights when Kabosu became the mascot for the alternative cryptocurrency dogecoin. This coin was created as a fun and light-hearted response to bitcoin, showcasing the internet's affinity for animal-themed memes. Other meme tokens, like the Shiba Inu coin, soon followed suit.

Read more here.

Up Next

On Monday, we can expect to hear about the earnings from Mizuho Financial. Just a heads up, the US financial markets will be closed in observance of Memorial Day.

Moving on to Tuesday, we will be looking out for the earnings report from CAVA. In addition, Federal Reserve officials Loretta Mester, Neel Kashkari, and Lisa Cook will be delivering some remarks. S&P Global will also be releasing its S&P CoreLogic Case-Shiller US National Home Price Index for March. And don't forget, The Conference Board will be releasing its May consumer survey.

Wednesday will see earnings reports from companies such as Salesforce, HP, Dick’s Sporting Goods, U-Haul, Abercrombie & Fitch, Chewy, American Eagle Outfitters, Victoria’s Secret, and Red Robin. Federal Reserve officials John Williams and Raphael Bostic will be giving remarks.

On Thursday, earnings reports are expected from Costco, Dell, Dollar General, Hormel Foods, Ulta, Best Buy, Burlington, Birkenstock, Gap, Nordstrom, Asana, Kohl’s, and Foot Locker. Additionally, the US Commerce Department will release its second estimate of first-quarter gross domestic product. The US Labor Department will report the number of new jobless benefit applications for the week ended May 25, and the National Association of Realtors will report home sales based on contract signings in April. Federal Reserve officials John Williams and Lorie Logan will be giving remarks. Furthermore, China’s National Bureau of Statistics will release May business surveys to gauge economic activity in the country's manufacturing and services sectors.

On Friday, the European Union's statistics agency will be releasing May inflation data. Additionally, the US Commerce Department will be sharing April figures on household income, spending, and the Fed's preferred inflation gauge. Atlanta Fed President Raphael Bostic will also be delivering remarks on this day.

Editor's P/S:

The article paints a picture of a robust summer season for consumer spending, particularly in travel and recreational activities. The strong start to the Memorial Day weekend, supported by data from the Transportation Security Administration and AAA, indicates a positive outlook for leisure businesses and the tourism industry.

However, the article also acknowledges potential headwinds, such as rising household debt, delinquencies, and the impact of inflation on budgets. While economists do not predict a recession in the near term, they anticipate an economic slowdown in the next 12 months. This suggests that the current spending spree may be a temporary boost before a potential period of reduced consumer spending.