With inflation down from last holiday season and the U.S. Transportation Security Administration (TSA) having reported record-setting travel records this past Labor Day weekend, it seems the stars are aligned for a blockbuster holiday travel season.
But according to JD Power data, bank customers in the United States aren’t necessarily readying to take to the roads and the skies in droves for the holidays this year. In fact, more customers say that they will remain home for the holidays this year than in 2023.
That development may come as a surprise to some, with customers presumably having gained some financial breathing room during the past few months. And for those who will travel, 70% will travel by air and/or stay overnight. But with customers suffering from the fatigue of persistently high consumer prices, some are just content to forego traveling altogether.
Financial Health Remains Steady
The number of customers who are financially healthy1 increased slightly to 33%, while 44% of bank customers fall into the vulnerable category. Notably, these levels reflect year-over-year improvements, which may imply a slightly higher holiday spending budget.
The number of bank customers who say that the cost of goods is increasing faster than their income held steady at 67%. Overextended customers saw a drop from 55% to 51%, potentially another harbinger of increased customer spending.
A Tame Turkey Day?
As Thanksgiving draws closer, bank customers have relatively modest holiday plans. The number of customers who say they will not travel during the holiday season increased to 46% from 39% a year ago. These levels are highest among vulnerable and stressed customers, as well as those over the age of 40.
Among those who do plan to travel, 43% say they plan to stay overnight in a hotel, motel, bed and breakfast, or an inn, while 27% say they plan to travel by air to their destination, 24% say they plan to stay at an overnight short-term rental, and 16% plan to rent a car. This implies that those who do travel are likely to spend a significant amount on their travel. This is particularly true of overextended and customers under the age of 40.
Holiday Helpers
After years of pent-up travel demand that accumulated during the pandemic, some customers are being more prudent about how and when they travel for the holidays. Still, there’s a big sentimentality to walking into your childhood home for Thanksgiving dinner. For those who do decide to take a trip in these next few weeks, banks can be valuable partners in guiding their travel spending.
Overextended customers are more likely to travel for the holidays than healthy customers, which means that budgeting tools could be a huge area of focus for banks even before the Black Friday shopping begins. Banks that can be active participants in helping customers make wiser travel decisions will likely be rewarded by thankful customers who will have a bit of a nostalgic hangover in the form of the reality of holiday shopping.
Find out More
This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in October 2024. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.
Media Contacts
Brian Jaklitsch; East Coast; 631-584-2200; [email protected]
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.