News byWIT on
Despite the challenges posed by Covid-19 there are promising signs in consumer spending, including hard-hit sectors like travel, with Italy, Russia and France leading the way.
This is one of the findings in the Mastercard report, Recovery Insights: Travel Check-In, which focused on the impact of the pandemic including emerging trends in travel spending. The study also spotlighted the rise of boutique hotels and the return of the road trip .
The report found the analysis of anonymised and aggregated sales activity across the Mastercard network, including in-person and online transactions, shows Italy, Russia and France are leading the recovery in travel and entertainment spending across the G20 countries. This includes travel sectors such as airlines and lodging, as well as activities like eating out.
Although a focus of the pandemic earlier this year, Italy’s significant restaurant culture and extensive domestic tourism industry have helped it to bounce back faster than other markets including the US, Brazil and India.
In many Asia Pacific countries the recovery also depends more on domestic sentiment rather than regional travel arrangements.
With the gradual improvement in the broader global economy a number of trends have also emerged that mirror overall consumer spending, in particular the shift to a smaller retail radius as consumers travel and spend closer to home.
Key trends include:
Localism takes off: Consumers are getting out and spending, but maintaining a tighter footprint with a “home-centred retail radius”.
Boutique is chic: Travellers are increasingly opting to stay small, with a rise in spending at boutique hotels. Recently, the global recovery rate of small independent hotels has outpaced the recovery of large hotels by more than 50%.
Consumer travel leads the recovery: An analysis of consumer cards compared to business cards shows that spending on consumer air travel and auto rentals is returning ahead of commercial travel.
“There’s no doubt that people love to travel. What we’re seeing, though, is that how they’re travelling has adapted during this time. Gas spending, restaurant spending, bike rental spending — all are improving, showing that the rebound is happening but is focused on local travel and local spending,” said Steve Sadove, Mastercard senior advisor and former CEO of Saks. “In other words for those of us in the US, the great American road trip has returned in a new way,”