Consumers Plan to Spend on Travel Despite ‘Gloomy’ Sentiment

A survey of consumer confidence released Tuesday showed the fourth straight month of declines, but respondents said they planned to increase spending on travel and vacations. 

“Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, which released the survey. 

The release from the Conference Board showed a mixed outlook for spending: “Fewer consumers planned to spend more on movies and live entertainment or sports, and more planned to spend on outdoor activities and travel. Vacation plans also increased.”

The results are the latest in a series of conflicting reports about the state of the economy and the potential for a slowdown that could weigh on the travel industry. 

• Treasury Secretary Scott Bessent has warned of a “detox period” following years of outsized government spending. But he has also said spending cuts shouldn’t come all at once because of the risk that they could cause a recession.
• The unemployment rate remains historically low, and there aren’t signs of widespread layoffs. But the rate has risen and there are signs of weakness below the surface, including reports that job seekers are taking longer to land offers.
• People are still spending. Despite surveys showing concern, Bank of America’s CEO noted that based on its accounts, people have been spending at a faster rate this year than they did in the fourth quarter of last year or the same period a year ago.
• Delta and other airlines have warned of a slowdown, but hotel operators have told Skift that bookings have largely been holding up.