Findings explore how and where U.S. travelers are saving and spending on international travel
TD Bank, America’s Most Convenient Bank® today announced the findings of a new survey that explored the habits of today’s global travelers — revealing key generational differences in how travelers are budgeting, planning and spending for international trips.
The study, which surveyed 1,000+ American travelers who took international vacations in the last year, found that younger generations are most interested in countries that offer more favorable exchange rates allowing them to maximize their spending power. In fact, 86% of Gen Z, compared to 75% of all respondents, indicated exchange rates were a main factor influencing their travel decisions.
Entertainment was another key driver among younger travelers, with 27% of Gen Z and Millennials reporting entertainment events like live concerts as a primary reason for travel, compared to only 7% of Gen Xers and Baby Boomers. When it comes to travel destinations, it might not be a surprise that after this year’s Olympic Games in Paris, Europe attracted the most travelers with 33% of all respondents surveyed jet-setting to that continent in the past 12 months.
The data also revealed key differences in how older versus younger generations prepare their finances ahead of going on vacation. According to the survey, 88% of all respondents had to save up for their recent travel, and more than half (60%) saved for up to six months before their trip. However, Baby Boomers are much more likely to vacation on-the-fly: 25% of all Boomer respondents reported either spontaneous trips or not needing to save prior to travel, compared to only 8% of Gen Z and Millennials. This approach to travel trickled down into older generations’ budgeting habits; only 72% of Gen X and Boomers stayed within their planned travel allowances compared to 80% of Gen Z and Millennial respondents.
“Cash is the choice for many generations, but younger generations prefer to carry a mix of cash and cards to avoid any unexpected inconveniences at a point-of-sale,” said Anthony Herceg, Head of Retail Foreign Exchange at TD Bank. “As many of the survey respondents determined, planning and budgeting as far ahead as possible for international travel can help mitigate the stresses that can often come as a result of it. Cash is still important, especially for smaller transactions and where cards are not accepted.”
Many Travelers Favor Carrying Cash for Convenience
Ninety-four percent of Gen Z and Millennial respondents exchanged cash for their trip, with just under 30% using local currency as their preferred payment method.
In contrast, 75% of Baby Boomer respondents took out local currency for their travel. However, only 14% preferred to spend with foreign cash, as the majority of this group (69%) would rather use credit as their primary payment method when traveling abroad.
More than half of all respondents (60%) showed preferences for exchanging cash after take-off:
- 30% opted to change currencies at a local bank abroad, or via ATM
- 22% used a local exchange vendor at their final destination
- 21% used a local exchange vendor at the airport after landing regardless of rates
Despite generational differences in preferred payment methods, travelers of all ages are still choosing to hold local cash in their wallets rather than use it during their travel.
Consumers Want to Shop Luxury Abroad, Not at Home
When it comes to deciding when to splurge, the majority of all travelers surveyed (82%) prefer to shop for luxury goods when vacationing abroad to take advantage of currency conversions for bigger savings. Clothes (60%) and food products (58%) remain high on the list, with other big drivers of luxe international spending including accessories, such as bags and jewelry (47%), wine and spirits (36%) and rare or antique items (22%).
In spite of this, travelers typically prefer to stick to the affordable side when it comes to accommodations, with 73% of all respondents opting for mid-range lodging for their vacations.
Generational differences also account for the discrepancies in luxury international travel, with 19% of Gen X respondents preferring luxe experiences and gourmet cuisines. While only a mild difference compared to their Millennial counterparts (of whom 20% prefer luxury travel), in contrast, Boomers were much less likely to opt for first class with only 13% of respondents indicating they upgraded.
To learn more about tools and resources for currency exchanges and budgeting for international travel, visit https://www.td.com/us/en/personal-banking/foreign-exchange.
This data is for general informational purposes only. It is not intended to provide specific financial, investment, tax, legal, accounting, or other advice and should not be acted or relied upon without the advice of a professional advisor. A professional advisor will recommend action based on your personal circumstances and the most recent information available.
Survey Methodology
This report presents the findings of a CARAVAN® survey conducted by Big Village among a sample of 1,007 U.S. adults, aged 18 and older who have travelled internationally for vacation/leisure purposes within the past 12 months. The survey was conducted between August 30-September 4, 2024.
About Big Village
Big Village Insights is a global research and analytics business uncovering not just the ‘what’ but the ‘why’ behind customer behavior, supporting clients' insights needs with agile tools, CX research, branding, product innovation, data & analytics, and more. Big Village Insights is part of Bright Mountain Media. Find out more at https://big-village.com.
About TD Bank, America's Most Convenient Bank®
TD Bank, America's Most Convenient Bank, is one of the 10 largest banks in the U.S. by assets, providing over 10 million customers with a full range of retail, small business and commercial banking products and services at more than 1,100 convenient locations throughout the Northeast, Mid-Atlantic, Metro D.C., the Carolinas and Florida. In addition, TD Auto Finance, a division of TD Bank, N.A., offers vehicle financing and dealer commercial services. TD Bank and its subsidiaries also offer customized private banking and wealth management services through TD Wealth®. TD Bank is headquartered in Cherry Hill, N.J. To learn more, visit www.td.com/us. Find TD Bank on Facebook at www.facebook.com/TDBank and on Instagram at www.instagram.com/TDBank_US/.
TD Bank is a subsidiary of The Toronto-Dominion Bank, a top 10 North American bank. The Toronto-Dominion Bank trades on the New York and Toronto stock exchanges under the ticker symbol "TD". To learn more, visit www.td.com/us.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241121220080/en/
Contacts
Catherine Achey
Catherine.Achey@td.com
