In its annual travel trends report, the card issuer reveals where Americans are going, with fresh economic insights into why.
Where are you headed this summer, America?
Americans are traveling overseas in record numbers this year.
As we head into Memorial Day weekend, a new report from the Mastercard Economics Institute, which tracks anonymized spending data, reveals a record 15.9 million Americans traveled internationally in Q1 this year. U.S. passenger traffic to overseas countries is now 20% higher than the pre-COVID record.
Given the strong dollar and relative health of the U.S. economy, economists see no signs of demand abating. So, it’s official: Americans are excited to go on vacation. But this study also reveals more clues as to where U.S. consumers are going, why they’re going, and how price sensitive they are when they get there.
For instance, consumers are extending their trips from four to five days on average, in order to have a more “immersive and meaningful” travel experience.
“In the experience economy, you’re seeing a consumer that is largely price tolerant, and is willing and able to spend. But, they’re deploying more of that purchasing power towards experiences over material goods,” says Michelle Meyer, chief economist and head of the Mastercard Economics Institute. She also notes that spending on experiences totals 12% of tourism sales — the highest point in at least five years.
At the same time, travel pricing has risen significantly. In the U.S., average airfare was up more than 20% in March 2024, compared to 2019; the average hotel room, for the same period, was up 15%.
Consumers are adapting. Many are opting to cruise instead of booking a pricey hotel. According to Mastercard, spending on cruises is up 16% in 2024 compared to 2019, thanks in part to the perceived value of a vacation at sea. Per the report, “Given persistent price increases in the hotel industry, the price difference between cruises and hotels has widened, making trips by cruise a relatively more budget-friendly option in many cases.”
That said, cruise liners are brilliantly effective at the multi-tiered upsell. Spending on wellness treatments, premium alcohol or on-land excursions, i.e. guided ‘experiences’ sold as an add-on amenity, can quickly shrink the price gap between paying for a resort or a cruise vacation. Today, every major player, including Royal Caribbean, Windstar Cruises, Virgin Voyages, and Celebrity Cruises offers tailor-made shore excursion packages, which are becoming evermore extravagant.
“People are becoming more strategic about how, when, and where they travel, with 2024 seeing significant shifts in travel patterns,” Meyer adds. According to the latest Mastercard data, this is where demand is “gaining momentum in the next three months” among American travelers.
“Travel Trends 2024: Breaking Boundaries,” a new report from the Mastercard Economics Institute.
The Top 10 Trending 2024 Summer Destinations for Americans
- Cancun, Mexico
- Oranjestad, Aruba
- London, UK
- Rome, Italy
- Punta Cana, Dominican Republic
- San Juan, Puerto Rico
- Athens, Greece
- Barcelona, Spain
- Tokyo, Japan
- Santiago, Dominican Republic
All of these places boast a robust tourism infrastructure and warm summer weather. Destinations like Cancun and San Juan are home to well-known resorts that actively appeal to Americans, with beautiful beaches and direct commercial flights. Athens is the gateway to Greece, and will soon welcome a new 600-acre park on the site of an abandoned airport. London is in the number three spot thanks to Taylor Swift and her Eras Tour, which is drawing American Swifties in droves this August. International soccer tournaments have a similar effect.
Tokyo became a frontrunner after having kept its borders closed to tourists for nearly two and half years during the pandemic. Tourism has surged since then, with a record-breaking influx of three million international visitors in March 2024, according to the Japan National Tourism Organization. The historically weak yen played a significant role in this phenomenon.
The key takeaway is this: The affordability of a destination matters a great deal — and might explain why Paris, France for the 2024 Olympics is not on this list.
According to Mastercard’s economists and data scientists, there is also a clear inverse relationship between the price of the destination and the incremental number of days tourists spend while in those destinations. The cheaper the destination, the longer the stay — which, in turn benefits local economies.
On a macro level, today’s tourists are inundated with choice, and yet they’re getting better at finding good deals and choosing destinations that offer value, however they choose to define it.
To dive deeper into the findings, check out “Travel Trends 2024: Breaking Boundaries,” the full report from the Mastercard Economics Institute, at mastercardservices.com.