For many North Americans, travel has become essential, so much so that an increasing number of people are willing to go into debt to finance their vacations, especially younger travellers.
Elizabeth Currid-Halkett, the author of The Sum of Small Things: A Theory of the Aspirational Class and a professor at the University of Southern California, told CNN she believes the trend began around the time of the 2008 financial crisis and was supercharged by the pandemic.
“We wouldn’t have been able to predict it, the way the pandemic affected different generations in different ways, but the idea that our friends matter, living life matters, how important living a good life is – that has led to a change in how people spend their money.
“When you’re young, you don’t have money to shift into another area, but you can say, ‘I’ll think about this later and live my best life right now.’”
That desperate desire to travel at any cost was further illustrated by the results of Allianz Partners USA's 16th Annual Vacation Confidence Index which were released Monday. While 47% of those surveyed said they can't really afford a vacation this year, 49% shared they are likely to travel anyway, sparking a new travel trend that rationalizes their actions: the justified vacation or "justi-vacation," when someone takes a vacation despite not being able to afford the expenses that come with travelling.
It's not just Americans who are prioritizing travel over other household expenses. In a national survey released late last year, Montreal-based FlightHub Group revealed that more than one in four Canadians (28%) had resorted to financing their trips using credit cards.
According to the survey, Millenials and Generation Z respondents were particularly hard hit by the rising cost of travel, with 57% of Millennials saying they had reduced outings to restaurants, theatres or concerts to afford their trips, while 69% of Generation Z travellers made similar concessions.
"We are seeing a number of changes in travel behaviour among our customers," said FlightHub CFO Marc Ghobriel. "Generation Z, for example, is booking more flights than Boomers, and is more attracted to international destinations such as Manila, London and Paris."
While some travel debt is voluntary, sometimes people go into credit card debt simply because they didn't budget properly due to rising prices. For example, USA Today reported that nearly half (45%) of parents are going into debt during a Disney vacation.
Despite the increasing willingness of travellers to finance their vacations via credit cards or personal loans, financial expert Julie Beckham told Business Insider that she advises them to create a spending plan that helps them better afford their trips.
"When possible, avoid the temptation to just charge it and deal with it later. While your tan fades, your debt will grow, and so might your stress," she said, "It feels a lot better to save for a year to go away than to go away and spend the next year paying for that vacation plus interest."
