After a slight increase last fall, consumer attitudes about travel are facing some turbulence spurred by the latest wave of the pandemic, according to Deloitte’s Global State of the Consumer Tracker. Deloitte released new data from its monthly survey, which tracks consumer priorities, purchase behaviors, preferences, and spending decisions amid the pandemic’s ongoing impact, especially in the United States.
Key takeaways from the report include:
- Globally, safety perceptions have fallen sharply amid the rise in Omicron COVID cases, affecting activities such as going to the store, traveling, and restaurant dining. For some activities, Omicron has erased nearly one year of progress around improving global safety perceptions.
- In comparison, the fall in safety perceptions across the United States has been more muted. The percent of U.S. consumers who feel safe sending their children to school declined the most, dropping from 40 percent in November to 33 percent in December.
- Return to office progress has slowed as the percent of U.S. employed adults who cite being able to work from home increased slightly for the first time in four months, from 51 percent in November to 54 percent in December.
- As safety concerns return, the percent of U.S. consumers who cite spending more on material things (versus experiences) increased from 19 percent to 25 percent since September. Similarly, those who cite replacing more in-person interaction with digital services increased from 21 percent to 26 percent.
- Since October, the percent of U.S. consumers planning to fly domestically for leisure travel has fallen from an almost two-year high of 43 percent to 33 percent. Those planning to fly internationally dropped from 30 percent to 19 percent.
Since March 2020, the world has been moving through the COVID-19 pandemic, which continues to shape and shift consumer priorities, purchase behaviors, preferences, and spending decisions. To track these trends, Deloitte has been conducting a series of monthly surveys around the globe. The most recent iteration of “Deloitte’s Global State of the Consumer Tracker” was conducted in 23 countries during the week of December 23-29, 2021, and queried at least 1,000 consumers in each country. The responses provide insight into how consumers are adapting to the next phase of the pandemic.
In two months, Omicron weakened safety perceptions for most activities globally to their lowest levels in a year, and for activities such as attending school and returning to work, to their lowest levels measured since mid-2020.
- In the United States, safety perceptions of many activities have dropped significantly, in particular sending children to school, which dropped from 40 percent in November to 33 percent in December. Safety perceptions also declined for taking a flight (48 percent to 42 percent) and engaging in one-on-one services (71 percent to 65 percent) since early November.
- Renewed safety concerns are likely impacting some purchase decisions. Since September, the percent of U.S. consumers who cite spending more on material things (versus experiences) increased from 19 percent to 25 percent. Similarly, those who cite replacing more in-person interaction with digital services increased from 21 percent to 26 percent.
- There is also some evidence that Omicron is slowing return-to-office progress. Throughout the fall season, the percentage of U.S. employed adults who cited being able to do their job from home dropped steadily from 63 percent to 51 percent. But that number increased slightly to 54 percent in December.
- Overall, U.S. travelers continue to spend more time working remotely compared to the rest of the world. The average number of days per week spent working remotely in the United States has remained consistent at just over three days since September.
“While safety perceptions have again declined amid a rise in Omicron cases, consumer confidence remains unshaken. Overall discretionary spending intentions among U.S. consumers remain steady. People have seen this movie before. And I think this speaks to a growing resilience to the pandemic’s ongoing ebb and flow,” said Anthony Waelter, vice chair, Deloitte LLP and U.S. consumer industry leader.
Unlike past pandemic waves, Omicron has yet to rattle consumer confidence in the United States. Overall financial sentiment and discretionary spending intentions remain steady.
- U.S. consumers expect to spend an average of $4,800 per household over the upcoming month, with one-third (35 percent) of their budgets slated for more discretionary categories such as recreation and entertainment, restaurants, electronics, and leisure travel. These spending intentions have remained virtually unchanged over the past several months.
- Roughly six in 10 (59 percent) U.S. travelers remain optimistic that their financial situation will improve within the next three years, a figure that’s also remained steady since September 2021.
- The percent of consumers concerned about their level of savings (50 percent) and credit card debt (40 percent), while roughly unchanged since September, still remains relatively high.
- Vehicle demand shows some signs of weakening. In December, 16 percent of respondents were planning to purchase a new vehicle within the next six months, down from 29 percent in September. Conversely, purchase intent for used vehicles increased slightly, from 9 percent to 13 percent.
- Inflation concerns may be starting to ease. For the first time since September, the percent of U.S. consumers who cite rising prices for everyday purchases such as groceries and clothing did not climb.
While consumer confidence generally appears unscathed, renewed pandemic uncertainty is likely to have a stronger influence on travel decisions. While more U.S. travelers may be thinking twice about staying in a hotel or flying, some travel segments, such as car rental and private accommodation rentals, might be proving to be more pandemic proof.
- Spending intentions for leisure travel for the month ahead have been gradually weakening, falling from an average of roughly $330 per survey respondent in September to $240 in December.
- Booking intentions for the three months ahead slipped across most travel products in December, including hotel (47 percent), domestic air (34 percent), cruise (21 percent), and international air (19 percent).
- Amid the rise of Omicron, booking intentions for both rental cars (34 percent) and private accommodation rentals (34 percent) have remained steady, suggesting consumers continue to perceive these forms of travel as safer.
- Among employed adults who typically travel for business, 67 percent expect to take a business trip within the next three months, down significantly from 80 percent.
“Consumers have been resilient, adapting behaviors to the pandemic as the number of cases continues to fluctuate. The pandemic continues to create uncertainty that is affecting how and when consumers travel, attend work and school, and generally interact with others. Yet, time and again, consumers have demonstrated the ability to be agile and flexible as we move into the next phase of this collective global experience,” said Stephen Rogers, executive director, Deloitte Insights Consumer Industry Center, Deloitte Services LP