Amadeus has unveiled ‘Consumer Travel Spend Priorities,’ a study with 4,500 consumers from France, Germany, UK, US and Singapore to understand their expected spending habits for the coming 12-months.
Consumers confirmed their desire to travel despite the economic uncertainty, with ‘international travel’ ranked as the highest priority from a selection of six discretionary spend categories.
Some 42 per cent of respondents said international travel is a high priority spend area for the coming year, far higher than online subscriptions (28 per cent), fashion (25 per cent) or a new car (20 per cent).
On average, consumers estimate they will spend $2,670 on international travel over the next year, broadly in line with how much they spent in 2019 ($2,780 average).
Many travellers plan to spread the cost across instalments, reducing exposure to costly foreign exchange transactions and by dipping into loyalty points previously collected.
David Doctor, executive vice president, payments, Amadeus, said: “This research clearly shows consumers are prepared to forego spending in other areas of their lives to accommodate travel this year.
“But that’s not the end of the story.
“The industry will need to look for ways that fintech can make travel costs more transparent as well as help travellers manage their spend.”
Faced with economic uncertainty, travellers are adopting fintech to reduce the expense of paying internationally and to flexibly fund their trips.
Three quarters of respondents said they are more likely to choose a pay-by-instalment option like ‘buy now pay later’ to fund travel over the coming year.
This compared to 44 per cent who are more likely to use a credit card, and 26 per cent who are more likely to turn to ‘payday loans,’ where short-term borrowing typically incurs high interest rates.
A total 47 per cent of travellers said they are planning to spend any loyalty points they’ve previously collected to pay for trips.
Travellers are also embracing new fintech options with 48 per cent more likely to try pre-paid debit cards that hold multiple currencies to avoid foreign exchange fees when paying abroad, and 49 per cent saying they are now interested in co-branded cards that yield loyalty points.
In the current environment, 73 per cent of travellers say they are more likely to pay attention to foreign exchange fees and costs associated with international travel and 56 per cent are more likely to choose a travel provider that lets them pay in their own currency, with transparent foreign exchange fees.
Take a look at the full report, here.