Where Travelers Are Spending Their Money This Year — and Where They’re Skimping

"Spending for the late-recovery [travel] sectors, such as cruises, continues to run hot.”

Travelers are spending money for everything from flights to international vacations this year, but the industry currently seeing the biggest bump in spending is cruises.

Spending on cruises, an industry that was later to recover post-pandemic than other travel sectors like hotels, remains very high, according to a new report from the Bank of America Institute. In fact, cruise spending has outpaced both airlines and accommodations in recent months.

“Has the strong, pent-up demand for travel run its course? That depends,” the report wrote. “For example, 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.”

The Centers for Disease Control and Prevention first lifted its No Sail Order in October 2020 but didn’t make its guidance optional for cruise lines until January 2022. That’s at least in part why cruise spending didn’t “rebound meaningfully” until the second half of 2021, according to the report.

But now, spending was up 22 percent in April compared to the same time last year, which is the highest among major travel categories.

Also seeing a strong demand is the airline industry. While not as robust as cruises right now, airline spending did increase 2 percent over a six month period from October 2022 to April 2023.

Spending is especially booming when it comes to international travel. Credit and debit card spending by Americans in foreign countries — a good way to measure international travel — grew by 21 percent in April compared to the same month in 2022, and was 46 percent higher compared to the same time in 2019.

The report was issued as the cost of international flights are up nearly 40 percent compared to last summer and are rising to a five-year high for flights to both Europe and Asia. To drive the point, Delta Air Lines noted last month its international flights were already 75 percent booked for the summer.

“International travel demand, which only started to meaningfully recover in 2022 as countries relaxed border restrictions, remains resilient,” the report reads.

While some travel is costing more, the report noted spending on lodging has decreased 5 percent from its pandemic-era peak.

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