(BPT) - By Mary Hines Droesch, Head of Consumer, Small Business & Wealth Management Banking and Lending Products at Bank of America
Summer travel planning is officially in full swing, and while many Americans are likely to be mindful of their spending, plenty are eager to get out and experience the world.
Gen Z seems to be leading the charge. According to a recent Bank of America survey, 24% of Gen Zers are planning to take longer trips in 2024 than years prior, whereas millennials (16%), Gen X (9%) and baby boomers (7%) are less likely to do so. Gen Z also takes the lead in international travel, with 20% planning an international trip - far ahead of millennials (10%), Gen X (8%) and baby boomers (6%).
Meanwhile, 81% do not plan on postponing any travel plans, and 91% say they plan ahead for vacation. So, what's driving this appetite for big adventure - especially among younger generations?
The fact that entertainment has been making a big splash could have something to do with it. Last year, Swifties and the BeyHive showed us just how much they're willing to sacrifice to see their favorite artists on stage, and 'Barbenheimer' took the world by storm via the screen. Considering that 45% of people said they were likely to splurge on experiences while traveling and 38% are already planning to travel internationally, the excitement is likely to continue this summer. Beyonce's recent album release has fans on the edges of their seats anticipating a tour announcement, the Eras Tour is hitting international venues and the Olympic Games are taking over Paris.
While 72% of people are planning to travel this summer, however, most don't plan to throw all financial consideration to the wind. In fact, 84% of those who will be traveling will establish a budget or spending limit.
If you're all about going big without going broke, here are some tips to help you offset costs on travel this summer:
1. Plan your travel and entertainment budget thoughtfully. When considering how much to budget, start by thinking through how you're most likely to spend during your trip. For example, 27% of travelers budget solely for major expenses and maintain flexibility with other spending on vacation. Consider the things you want to go all out on, and where can you cut back. Self-proclaimed foodie? You'll want to make sure your food and beverage budget has plenty, while you may be able to cut other costs by booking less expensive accommodations. If it's kicking back and relaxing on a luxurious bed that you look forward to most, consider budgeting more for accommodations and less for food, opting to grocery shop instead of eating out every night.
Another important consideration when it comes to planning your spending this summer is your 'fun budget.' Especially if you're traveling for a big-ticket event like a concert, you'll want to make sure you know how much you can spend on the ticket - and how much that leaves for the rest of your travel budget. Americans tend to overspend in this area, with the biggest culprits for going over the 'fun budget' being trying new restaurants (42%), concerts/music festivals (39%) and sporting events (30%).
2. Start planning now. Plan as much as you can, as early as you can. Avoid last-minute price hikes on tickets for both travel and entertainment by buying them well in advance, taking advantage of early bird discounts on flights and booking your accommodations before options fill up.
What's more, when you start the process early, you might get lucky and find a package deal with offers that include flights, accommodations and even event tickets.
3. Use a rewards credit card before and during travel. Whether you plan to spend big on a trip or go the more frugal route, consider using a cash back credit card to help offset some of your vacation expenses. With the Bank of America Customized Cash Rewards credit card, each month you can choose to earn 3% cash back in one of six spending categories, including travel, dining, online shopping and more. To maximize your cash back, you could choose the travel category for the months before your trip when you're booking accommodations and flights, then switch to a new category, like dining, to make the most of your purchases during your trip.
If you've earned credit card rewards but haven't used them yet, consider putting them toward your travel and entertainment purchases to offset some of the costs. Or, if you're planning to travel next year, too, consider putting the cash rewards you earn this summer into a savings account, so you'll have funds at the ready for future endeavors.
Overall, despite some lingering financial concerns, the appetite for travel is strong. High-profile entertainment, like concerts and sporting events, is likely to be a major draw for travelers this summer - which means effective money management will be key for consumers. By strategizing and making wise financial decisions, even the most adventurous vacationers can enjoy a remarkable summer getaway without blowing the budget.
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