Travel Spending Slump: 'Some Households Are Pulling Back Completely'

Expect to hear more this earnings season about the wealth gap. Overall spending may be sluggish, but high-income households are still traveling and hotels and airlines are doubling down on this group.

Consumers have pulled back on travel spending in recent months, according to new data from the Bank of America Institute, which tracks activity from 69 million accounts.

“Travel has been weaker this year compared to prior years,” said Taylor Bowley, an economist at Bank of America. “If you think about over the past few years, people have talked about revenge spending, revenge travel, ‘I’m going to take that trip.’ And we’re seeing services spending drop for the third straight month, and that hasn’t happened in our data for over 10 years. That is, I think, what the big takeaway is here.”

The institute’s monthly report for June shows a continuation of the trend of more spending going toward necessities like rent, utilities, and insurance and away from what it calls “nice to haves.” And that has led to some consumers making tougher choices.

“It’s been particularly interesting in that there’s been this emergence of a more selective consumer,” Bowley said. “We’re seeing a more selective consumer that maybe they’re making fewer trips, but making a more meaningful experience out of them. Households are generally making less transactions per month when it comes to travel.”

The June data doesn’t break out travel transactions by income group, but the institute is seeing a divide.

“The pullback really is predominantly with the lower-income household,” said Liz Everett Krisberg, Head of the Bank of America Institute, on CNBC. The June data shows the number of transactions and spending per transaction in lodging and airlines. “There are some households that are pulling back completely from travel,” she said.

The data is consistent with the message from CEOs. Delta’s stock surged last week when it issued a forecast for the remainder of the year that was better than expectations. But the forecast was down from January, and CEO Ed Bastian noted the weakness in the main cabin, where the most price-sensitive passengers are.

“We actually expect to see domestic seats in the main cabin negative starting in August - for the industry and Delta. On the domestic front, we're looking to be flat to down. The growth will be on international and the growth will also be in premium,” Bastian said on CNBC.

Southwest CEO Bob Jordan acknowledged that consumers seem stretched in an interview with the New York Times.

“I think this summer will be defined generally as demand did not come in as strong as we all thought six months ago. You see weakness all over the place,” he said.

September 16-18, 2025 - NEW YORK CITY