Americans are in more of a spending mood this year, with the average vacation budget expected to top $2,000 for the first time. This is a rise of 23% since the beginning of the decade, in 2010. Total vacation spending in the USA is expected to top $101.7 billion, a new record.
Those are some of the findings from the annual Vacation Confidence Index survey conducted each year by Allianz Global Assistance travel insurance company. In conjunction with Ipsos Public Affairs, they have been polling American consumers by telephone for a decade now, giving them a year-by-year comparison of spending, vacation time taken, and confidence that they will take a vacation this year or not.
Here at Luxury Latin America, we tend to attract readers that are 100% confident about getting away since most of our readers take several international trips per year. Our readers are not average, however, since the survey depressingly found that more than a third of respondents had not taken a vacation in two years and half hadn’t taken one in a year.
Vacation Confidence is Up
The ones who are enjoying that much-needed getaway are in more of a spending mood this year, however, probably thanks in part to an unemployment rate that has been dropping every year since 2012. Whether it’s for family vacations in the US or honeymoons in Costa Rica, those who are taking their time off work are willing to make their vacation budget a little larger this year.
Back in 2010, the survey respondents’ vacation budget figures averaged out to $1,653, then dropped to $1,565 in 2012, following a year where we had hit 26 straight months of job losses and 3% inflation. The figure has bounced up and down a little since then, but overall has been rising. This year’s figure is up more than 5% over last year.
Besides the employment figures and a higher minimum wage in many places at the low end of the income scale, we are also seeing strong stock market gains and solid business profits in most sectors fueling the high end. You only have to look to Los Cabos to see the outcome of this: just in the past couple years we’ve added reviews of new Los Cabos luxury hotels from Montage, Nobu, Viceroy, Le Blanc, and the Luxury Collection, while a Four Seasons and Ritz-Carlton Reserve are on the way. Real estate in Baja is booming too as buyers feel the confidence to invest in a vacation home.
In addition, fuel prices have remained relatively low in historic terms, which means more affordable gasoline for road trips and more affordable flights to far-flung lands, including in business class. Family vacation packages get a lot cheaper when jet fuel prices are low and now that Argentina and Brazil aren’t charging $160 per person for a visa, it’s a lot more affordable for Americans to head to those countries or Chile. The strength of the dollar has also helped, making many Latin American countries more attractive financially.
All these factors are contributing to record spending. The survey estimates “the total spend will cross the $100 billion mark for the third consecutive year in the index’s history, amounting to $101,700,000,000.” See the historic results of the survey here.
Naturally, Allianz wants you to protect that vacation travel investment by getting travel insurance before you go. Or if you’re taking more than one trip per year, it might make sense to just get an annual AllTrips plan like I do. You will likely spend between $125 and $450 per year depending on reimbursement limits and trip cancellation coverage, then you can travel over 12 months with real confidence that you’ve got back-up no matter what happens.
How about you? Has your vacation budget gone up this year? Are you feeling more confident about taking the time off that you deserve?
This post is made possible by the sponsorship of our travel insurance partner Allianz Global Assistance (AGA Service Company) and we have received financial compensation via an ongoing advertising relationship. As always, all thoughts and opinions are our own.