21% of Gen Z are planning a trip to "soul-search" this summer, while 1 in 5 Americans say they can't afford to vacation at all

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Jun 08, 2023, 09:17 ET

Americans are reimagining summer through road trips, staycations as inflation impacts the majority of travel plans

GREENWOOD VILLAGE, Colo., June 8, 2023 /PRNewswire/ -- Gen Zers may have more fun than everyone else this summer, with 1 in 5 saying they plan to find themselves by splurging on a "soul-searching" trip (21%), traveling abroad (20%), or packing their bags for a romantic getaway (24%), according to new research from Empower, a leader in financial planning, investing and advice.

Not so fast, according to 41% of Americans who won't travel this summer, with 20% saying they can't afford to go on vacation (women 24%, men 15%). Nearly all (88%) say inflation has cooled their summer plans, causing people to save up for longer, plan fewer getaways or shorter trips. To fund their travel, Gen Z is trimming back on hair/nail appointments (24%) and cancelling streaming subscriptions (18%). Nearly a third (31%) of Gen Zers and 26% of Millennials are turning to a side gig to save more for their soulstice.

One in five Americans (19%) say they're planning trips within driving distance. In May, monthly spend on gas ($193) has declined nearly 23% as compared to last year ($252), according to Empower Personal Dashboard™ data.

More key findings:

The tradeoff for a trip: To save up for vacation, 37% of Americans have reduced the amount they eat out, 21% are cutting back on premium purchases such as furniture and clothes, 19% are passing on attending local concerts or the theater, and 18% have slashed beauty services (22% for Millennials). Some 30% have tapped into a savings account or rainy-day fund.
Unpacking the price: More than half of Americans who are planning on traveling this summer are capping their spend at $500 for flights and transportation (52%), food (55%) and activities (51%). Nearly a third (31%) plan to splurge on lodging, spending more than $1,000 for their hotel or Airbnb stay. A quarter of respondents planning to vacation are willing to dish out between $500 -$1,000 for food (26%) and experiences (25%). See ya, souvenirs: just 33% expect to spend more than $500 on shopping during their trip.
Favorite travel companions: 42% of Americans plan to visit family and friends this summer, which trumps sightseeing (24%) and concerts/festivals (22%). Some 35% plan to spend on family-friendly activities or outdoor adventures (28%).

Paying for a vacation often requires planning ahead, and nearly a third of Americans (30%) traveling this summer say they create a monthly budget to save up for the season's adventures. Lacey Cobb, CFA^®, CFP^® and director of advice solutions for Empower, recommends automating savings into a designated travel fund.

"The easiest way is to have a portion of your paycheck automatically set up to go toward savings. One method is a high-yield cash account with contributions every month," Cobb says.

Flexibility can be the ticket when budgeting for a vacation. "Popular tourist destinations tend to be more expensive, so look for off the beaten path destinations or where the US dollar is strong relative to the local currency, if traveling abroad. Ultimately, the more flexible you are with your plans, the easier it is to vacation on a budget. Traveling during the off-season and booking flights mid-week will help bring down costs. You can find wildly different prices just by tweaking your arrival or departure days ever so slightly," Cobb says.

If you've set the goal to take a vacation this summer, the Empower Personal Dashboard™ can help you track your spending and progress toward your goals. Get your free financial dashboard today.

*ABOUT THE STUDY
Empower's report is based on survey responses conducted by Morning Consult on behalf of Empower from May 19 to May 21, 2023, surveying 2,201 Americans ages 18+ and data from the Empower Personal Dashboardä.

ABOUT EMPOWER
Empower, a leader in financial planning, investing, and advice, is dedicated to creating financial freedom through people and technology. It administers approximately $1.3 trillion in assets for more than 17 million retirement plan participants and is the nation's second-largest retirement plan recordkeeper by total participants.¹Connect with us on Empower.com.

Media contacts:

Katelyn Kwiatkowski: [email protected]
Stephanie Visscher: [email protected]

¹ As of January 31, 2023. Assets under Administration (AUA) refers to the assets administered by Empower pursuant to service contracts, including recordkeeping, for retirement plans and participants, IRAs and other pension accounts. On August 1, 2022, Empower announced that it is changing the names of various companies within its corporate group to align the names with the Empower brand. For more information regarding the name changes, please visit http://www.empower.com/name-change

The information contained herein is being provided for discussion purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy or sell securities. All visuals are illustrative only. © 2023 Empower Annuity Insurance Company of America. All rights reserved. "EMPOWER" and all associated logos, and product names are trademarks of Empower Annuity Insurance Company of America.

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SOURCE Empower