Americans appear ready to move on from worrying about the recession and one thing seems clear: they need a vacation.  Mintel’s annual comparative audit report, American Lifestyles 2014, suggests that renewed consumer spending is in line with pre-recession trends and consumer optimism is higher than it’s been in years. After five years of slow but steady growth, Americans have passed the tipping point of prolonged economic worry and have cautiously accepted that things are better.

As identified by the report, vacations and tourism is one of the spending categories that appears poised to show the greatest growth growth (+27.3%) over the next five years, along with other nonessentials such as leisure and entertainment (+28.5%), technology and communications (+25.2%) and alcohol on premises (+23.7%).  

Adults aged 18-24, in particular are looking at the world around them and see all the possibilities ahead. Owing in part to social media and the ability to share instantaneously with others, young adults are placing a higher value on ‘experiences’ as opposed some of the more traditional purchases of their parents’ generation.  A desire for experiences over stuff – coupled with a record number of Baby Boomers reaching retirement (meaning that this relatively wealthy demographic has more free time on their hands) – has seen expenditures on categories such as dining out, vacations, leisure and entertainment. and alcohol outpace spending overall.

Over the course of one year, the share who say they spend extra money on vacations nearly doubled. This is the greatest gain for any one area of consumer spending and is a sign of improved finances – or at least optimism since, when money is tight, vacations are often one of the first discretionary areas to be cut from the budget.

Vacations and tourism spending has outpaced total US consumer expenditure growth and is estimated to have increased by 4.6% from 2012 to 2013 compared with a total growth of 3.4%. Over the next five years, steady growth is expected in the vacation and tourism segment, with total expenditures forecast to reach $282.4 billion by 2018 – a 27.3% increase over 2013 spending in comparison to the total spending growth prediction of 20% over the same time frame (2013-18).

Consumer spending on vacations and tourism will outpace total expenditure growth over the next five years, due mainly to increased costs associated with international travel as well as a stable and growing domestic market. Baby Boomers are a driving force behind vacation spending, though families headed by young Millennials will also contribute to the market. 

In 2014, it appears that America has finally stopped holding its collective breath, waiting for another economic shoe to drop. Now it’s time to swap out those shoes for flip flops and the promise of warm sunshine. 

For more information on the various categories covered in the American Lifestyles 2014 report, please click here.

Fiona O’Donnell is a Category Manager, Multicultural, Lifestyles and Leisure, at Mintel. She specializes in consumer behavior, demographics, travel and green trends, and she uses her expertise to advise clients on marketing strategies and business decisions.

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