Soaring passenger traffic, longer stays: Mastercard Economics Institute on travel in 2024

Rhea-AI Summary

The Mastercard Economics Institute's 'Travel Trends 2024' report reveals significant growth in the travel sector. Consumer spending on travel remains robust, with record-setting passenger traffic through March 2024. Key insights include a notable increase in international travel, extended trip durations, and a shift towards spending on experiences over goods. The report highlights that 15.9 million Americans traveled internationally in Q1 2024, with Japan seeing over 3 million arrivals in March. Cruises are also making a strong comeback, with global transactions 16% higher than in 2019. Top summer destinations include Munich and Albania, with travelers seeking authentic yet affordable experiences. Mastercard supports the tourism sector with market analysis, data insights, and customer engagement strategies.

Positive

• Record-breaking passenger traffic and consumer spending on travel in 2024.
• 15.9 million Americans traveled internationally in Q1 2024.
• Over 3 million passenger arrivals in Japan in March 2024.
• Average trip duration extended by an extra day compared to pre-pandemic.
• 12% of tourism sales now spent on experiences, highest in at least five years.
• Global cruise passenger transactions 16% above 2019 levels in Q1.
• The Bahamas welcomed 2.9 million additional cruise passengers versus 2019 levels.

Negative

• Fluctuating exchange rates and varying levels of affordability pose challenges to the travel sector.
• Potential financial strain for travelers due to the prioritization of experiences over goods.
• Increasing dependency on affordable destinations could impact revenue from more expensive locales.

Insights

Travel Industry Analyst

The travel sector's robust growth in 2024 is an encouraging sign for the industry. The significant increase in passenger traffic and extended stays highlight a strong consumer demand for travel experiences despite fluctuating exchange rates and varying levels of affordability. This indicates a resilient market where people prioritize experiences over material goods. The data suggesting that an additional 6 degrees Celsius in temperature can extend a stay by about a day is intriguing. It underlines the importance of climate in travel decisions, potentially benefiting warmer destinations.

However, sustainability concerns come into play with increased travel. While economic benefits are clear, the environmental impact of higher travel volumes—particularly air and cruise travel—should not be overlooked. Savvy investors must consider the potential for stricter regulations or shifts in consumer preferences towards more sustainable travel options in the future.

From an investment standpoint, companies within the travel sector, including airlines, cruise operators and destination services, are likely to see a positive impact on their bottom lines. However, they must also be prepared to address environmental concerns and adapt to evolving consumer behaviors towards sustainable travel.

Financial Analyst

The surge in consumer spending on travel as reported by Mastercard Economics Institute is noteworthy. With 15.9 million Americans traveling internationally in Q1 2024 and strong passenger traffic in regions like Japan, the travel industry is experiencing a significant rebound. This increased spending is indicative of a robust economy and high consumer confidence, which are positive signs for the market.

Investors should pay attention to the spending trends highlighted in the report. The significant increase in spending on experiences as opposed to material goods suggests a shift in consumer behavior that could have long-term implications for businesses in the travel and leisure sectors. Companies that can capitalize on this trend by offering unique and immersive experiences are likely to outperform.

Nevertheless, the volatility in exchange rates and affordability could introduce some risks, especially for companies relying heavily on international travel. The financial performance of these companies will need to be monitored closely to assess whether they can sustain growth amidst such market dynamics.

PURCHASE, N.Y.--(BUSINESS WIRE)-- The travel sector in 2024 is breaking boundaries. Through March 2024, consumer spending on travel is robust with significant increases in passenger traffic, according to the latest global report from the Mastercard Economics Institute. Released today, “Travel Trends 2024” provides comprehensive insights into the evolving landscape of the travel industry across 74 markets.

Top 10 Trending Summer Destinations 2024. (Graphic: Business Wire)

Despite fluctuating exchange rates and varying levels of affordability, the desire to travel remains stronger than ever. In 2024 the travel sector is flourishing, with nine out of the last 10 record-setting spending days in the global cruise and airline industry occurring this year¹. Further, travelers are also extending their trips by an extra day compared to pre-pandemic.

Drawing on a unique analysis of aggregated and anonymized transaction data, including Mastercard SpendingPulse™, and third-party data sources, the report takes a deep dive into key travel trends globally for the year and beyond, including:

Record traveling. An all-time high of 15.9 million Americans traveled internationally in Q1 2024, while Japan welcomed over 3 million passenger arrivals in March 2024² alone. The surge in travel reflects greater activity, fueled by a strong labor market and a stronger desire to travel.

Leisure for longer. Tourists worldwide have spent an extra day on vacation on average – those from Europe and the Middle East and Africa roughly two – with the trend driven by affordable destinations and warmer climates. For each extra 6 degrees Celsius of temperature, the estimated increase in length of stay is approximately 1 day.

Experience economy on the go. Consumers have prioritized meaningful experiences over material goods, even when traveling. Spending on experiences now totals 12% of tourism sales, according to SpendingPulse Destinations which measures in-store and online retail sales across all forms of payment - the highest point in at least five years as of March 2024. Ahead of the pack, Australians tend to spend one of every five dollars on experiences and nightlife compared to the global average, which is closer to one in every 10.

Cruising full steam ahead. Cruises are making a remarkable comeback with the count of global cruise passenger transactions roughly 16% above 2019 levels in Q1. Booming cruise demand is also seen at key ports. Over the last 12 months, The Bahamas has welcomed an additional 2.9 million passengers arriving by sea versus 2019 levels. For many travelers, the widening price difference between cruises and hotels has made cruises a more budget-friendly option for a getaway.

Top 10 trending destinations — and dupes. While Japan has emerged as the global frontrunner for top destination in the last 12 months³, Munich ranks as the top trending destination for this summer (June-August 2024)⁴. Notably, Albania ranks third in the list of top trending destinations this summer according to the Mastercard Economics Institute, driven largely by savvy travelers seeking authentic Euro-vibes à la neighboring Italy and Croatia, but for less.

“The resilience and adaptability of the travel sector paired with persistent consumer demand has translated to a strong tourism rebound," said Michelle Meyer, chief economist and head of the Mastercard Economics Institute. “Just like at home, travelers are prioritizing experiences over goods while abroad. Yet, today's travelers are discerning, choosing destinations that offer both value and authenticity. They are savvy enough to stretch their funds and extend their stays, immersing themselves fully in the experiences and wonders of each locale.”

Comprehensive support to travelers and tourism sector

Mastercard is dedicated to helping the global tourism sector welcome travelers through a range of services, from market analysis and high-frequency data insights that help make sense of changing consumer trends to customer engagement strategies that personalize the travel experience and drive brand loyalty. And with comprehensive travel benefits and convenience, cardholders can enjoy their travel experiences and everyday purchases with peace of mind.

You can view the full “Travel Trends 2024: Breaking Boundaries” report here. Other reports and insights from the Mastercard Economics Institute can be found here.

About Mastercard Economics Institute

Mastercard Economics Institute launched in 2020 to analyze macroeconomic trends through the lens of the consumer. A team of economists, analysts and data scientists draws on Mastercard insights - including Mastercard SpendingPulse™ - and third-party data to deliver regular reporting on economic issues for key customers, partners and policymakers.

About Mastercard (NYSE: MA) www.mastercard.com

Mastercard is a global technology company in the payments industry. Our mission is to connect and power an inclusive, digital economy that benefits everyone, everywhere by making transactions safe, simple, smart and accessible. Using secure data and networks, partnerships and passion, our innovations and solutions help individuals, financial institutions, governments and businesses realize their greatest potential. With connections across more than 210 countries and territories, we are building a sustainable world that unlocks priceless possibilities for all.

¹ Mastercard Economics Institute analysis of aggregated & anonymized switched consumer volumes (nominal US dollars unadjusted for FX) through March 2024.
² Mastercard Economics Institute analysis, US ITA, Japan National Tourism Organization.
³ Mastercard Economics Institute analysis of aggregated & anonymized Mastercard leisure travel related switched transactions.
⁴ Mastercard Economics Institute analysis of aggregated & anonymized Mastercard leisure flight booking data provided by third party partners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514046238/en/

Media

Alyssa O’Brien, Mastercard

alyssa.o’brien@mastercard.com

Source: Mastercard Incorporated

FAQ

What are the key findings of Mastercard's 'Travel Trends 2024' report?

The report highlights record-breaking passenger traffic, increased spending on experiences, longer trip durations, and a strong comeback in the cruise industry.

How many Americans traveled internationally in Q1 2024?

15.9 million Americans traveled internationally in Q1 2024.

What is the significance of Japan's passenger arrivals in March 2024?

Japan saw over 3 million passenger arrivals in March 2024, reflecting a strong desire for international travel.

How has the cruise industry performed in Q1 2024?

Global cruise passenger transactions were 16% higher than in 2019, indicating a strong comeback.

Which are the trending summer destinations according to Mastercard?

Munich and Albania are among the top trending summer destinations for 2024.

How has consumer spending on travel changed in 2024?

Consumer spending on travel has remained robust, with a shift towards spending on meaningful experiences over material goods.

What are the challenges facing the travel sector in 2024?

Fluctuating exchange rates and varying levels of affordability present challenges to the travel sector.

How has the length of trips changed in 2024?

Travelers are extending their trips by an extra day on average compared to pre-pandemic.