Consumers will prioritize spending on travel with fintech services
The data has been revealed in a new report published today by Amadeus
Amadeus conducted the 'Consumer travel spend priorities 2022' study in which 4,500 consumers from France, Germany, the United Kingdom, the United States and Singapore were surveyed to find out their expected spending habits for the next twelve months.
Consumers confirmed their desire to travel despite economic uncertainty, with "international travel" as the highest priority from a selection of six discretionary spending categories. 42% of respondents said that international travel is a priority spending area for the coming year, far above fashion, restaurants and high-value items such as home improvements.
On average, consumers estimate they will spend $2,670 on international travel over the next 12 months, in line with what they spent in 2019 ($2,780 on average). Many travelers plan to spread spending over installments, reducing exposure to costly foreign exchange (FX) transactions and drawing on previously earned loyalty points.
David Doctor, Executive Vice President, Payments, Amadeus, said: "This study clearly shows that consumers are willing to forego spending in other areas of their lives in order to travel this year. But this is not the end of the story. The industry will need to look at ways in which fintech can make travel costs more transparent, as well as help travelers manage their spending."
Travelers turn to fintech for flexibility
In the face of economic uncertainty, travelers are turning to fintech to reduce international payment costs and finance their travel with flexibility.
Three-quarters of respondents (75%) said they are more likely to choose an installment payment option, such as Buy Now, Pay Later, to finance their travel over the next year. This compares with 44% who are more likely to use a credit card, and 26% who are more likely to use payday loans, where short-term loans often carry high interest rates. 47% of travelers say they plan to spend the loyalty points they have previously earned to pay for their trips.
Travelers are also embracing new fintech options: 48% are more likely to try multi-currency prepaid debit cards to avoid foreign exchange fees when paying abroad, and 49% say they are now interested in co-branded cards that give loyalty points.
In the current environment, 73% of travelers say they are more likely to pay attention to foreign exchange fees and commissions associated with international travel and 56% are more likely to choose a travel provider that allows them to pay in your own currency, with transparent exchange rates.
David Doctor continued: "Demand for flexible payment options such as Buy Now Pay Later in travel is extraordinarily high. The industry is keen to meet this demand, but must do so responsibly." , with comprehensive risk management. Travelers are adapting to limit travel costs. We see in our own data that more and more travelers are choosing to pay in their local currency across all airlines using our FX Box technology."