The Most Popular Summer Travel Destinations, According To Mastercard

24.05.2024 - 11:13 / forbes.com / Royal Caribbean

In its annual travel trends report, the card issuer reveals where Americans are going, with fresh economic insights into why.

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