Gen Z and millennials are going into debt to travel this summer. Remote working may be partly to blame.
Working remotely has become the new norm, but it's not always good for our bank accounts.REDA&CO/Getty ImagesMany millennials and Gen Zers are incurring debt to finance their summer travel plans.Post-pandemic travel is booming despite inflation.Experts say that remote work and "bleisure travel" have increased spending on travel experiences.Young Americans are having the summer of their dreams — just don't ask to see their bank balances.A Forbes Advisor survey of 1,000 Americans who plan to travel in 2024 showed the post-pandemic "revenge travel" boom is in full force, despite rising inflation.An estimated 92% of those surveyed said they plan to travel as much as they did in 2023, and more than half of Gen-Zers and millennials surveyed said they planned to travel more.Millennials and Gen Zers are even willing to take on debt to fund their summer travel, according to three new surveys by Credit Karma, Bankrate, and Bank of America cited in a recent Business Insider report."Now that travel is back, younger travelers want to make the most of the time they have and prioritize spending on experiences versus tangible items," Johannes Thomas, CEO of Trivago, told BI.The stats weren't surprising to Thomas, who told BI that this new trend could be partly attributed to the rise of remote work.To work from home — or abroadIn a recent survey reported by BI in April, 34% of US CEOs said they expect workers whose roles were once tied to an office to be back in their commuting five days a week in the next three years. That's down from 62% who held that view in 2023, according to the study released Thursday by KPMG US."Remote work and flexibility are the new normal," Thomas said, adding that taking vacations while working has been made easier for younger people entering the workforce.The ability to work from anywhere is appealing to those looking to fit more travel into their schedule, regardless of their bank balance.It may be easier, but that doesn't necessarily mean cheaper. Around 62% of millennials and 61% of Gen-Zers surveyed by Forbes Advisor said they plan to spend a minimum of $4,000 on travel in 2024.Ivan Saprov, founder and CEO of Voyagu, told BI that the rise of "bleisure travel" — the combination of business and leisure travel — has encouraged young people to prioritize taking trips during economic uncertainty.For example, he said the rising combination of hotel chains and coworking spaces has made it "convenient for young professionals to work remotely while traveling.""With the rise of remote and hybrid work formats, it is now easier than ever to mix work with pleasure," Saprov said.Revenge travel and other loansIt's not just remote and hybrid working that may have contributed to a rise in travel spending.Travel experts previously told BI they had noticed an uptick in clients opting for luxury air travel experiences, from private jets to first-class and premium-class plane tickets.Oliver Bell, cofounder of luxury travel company Oliver's Travels, said this trend could be partly attributed to "revenge travel," where people are "willing to spend more for incredible experiences" in the aftermath of the pandemic.Social media may also be playing a role. Thomas and financial expert Julie Beckham told BI that young people are likely to be influenced by peers who are showcasing their travel experiences online."FOMO (or fear of missing out) has a lot to do with saying yes to travel we can't afford," said Beckham, an AVP/Financial Education Development and Strategy Officer at Rockland Trust."We are very uncomfortable talking about finances as a society and it can cause people to overspend to keep up with their friends or appearances on social media," she added.Debt is also a burden many people are used to carrying. According to Experian data, the average American owes $104,215 in mortgage loans, home equity lines of credit, car loans, credit card debt, student loan debt, and other debts like personal loans.Of course, you don't have to sacrifice financial stability to travel if it's within your means.Beckham recommends creating an international spending plan for future trips.She said it's worth being open and honest with your travel companions about your budget expectations so that you can plan for cheaper alternatives if required."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," Beckham said."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."Read the original article on Business Insider
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