Travel recovery: Bumps along the way

Residual pent-up demand for cruises and international trips is helping drive ongoing travel spending.

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Anna Zhou

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Taylor Bowley

May 2023

Key takeaways

  • Strong travel spending was a key driver of the rebound in consumer services spending last year. However, it seems to be softening from very elevated levels in recent months. Has the strong, pent-up demand for travel run its course?
  • The short answer is, it depends. Spending for categories that recovered more quickly during the pandemic, such as lodging, seems to have already peaked, while spending for the late-recovery sectors such as cruises continues to run hot. Airline spending appears to be falling somewhere in between.
  • Similarly, we find demand for international destinations and travel spend among older generations remaining strong as both started their recovery later in the pandemic. In our view, residual pent-up demand from these categories could provide some offset to weakness elsewhere and support overall travel spending in the coming months.

Read our full analysis for a more in-depth look at these trends.