The ‘Experience Economy’ vs. Inflation — Why People Are Still Traveling and Spending Despite Rising Prices
Written by
Marc Guberti
Edited by
Zuri Anderson
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The travel industry has been booming since the pandemic. After more than a year of lockdowns, people are finally eager to get out. However, the initial post-pandemic tailwinds have carried over to this day.
More people have been visiting new states and countries to have new experiences and see different parts of the world. Travel has remained resilient despite rising prices, as people don’t seem to mind paying the extra money.
These are some of the factors that are fueling the travel boom. Also find out smart ways travelers are saving money on their vacations.
FOMO Remains Strong
Taylor Beal is a travel blogger who helps people travel to Europe easily through her website, Traverse With Taylor. She explains how FOMO continues to drive the travel boom.
“I think people have been traveling more lately because of this fear of missing out that still comes from the COVID era. For so long, people were not ABLE to travel — as in, not permitted. And it felt like we were missing out on something we should be experiencing. Now, post-COVID, there’s still this lingering fear of missing out on life’s experiences, and I think that is still driving the boom in travel.”
The Push for Remote Work Makes It Easier To Travel
While FOMO is a strong factor, the travel industry has also benefited from its accessibility. Many employers allowed people to work remotely during the pandemic, and those policies have remained intact at plenty of organizations.
Andrew Jernigan is the CEO of Insured Nomads, which also has a travel brand called Insured Travelers. He explains how the switch to remote work set the stage for the travel boom.
“Whether work or leisure, blending for workation or bleisure, many people have travel as a normal part of their lifestyle and will not give it up no matter the price,” Jernigan said. “Some trips have been planned for months, while others get the opportunity and grab it. The layoffs and RTO mandates that pushed people into freelance and consulting roles have given a new power to people to travel rather than be tethered to a commute.”
Sunk Cost Effect
Have you continued to pour more time and effort into something just because you’ve spent a lot of time on it already? That’s the sunk cost effect. Some people will continue to embrace this course of action even if it isn’t producing results.
In the travel industry, you can’t just get up from your couch and go to another country. You have to compare hotels, find out what you’re going to do in your vacation spot and make a bunch of decisions before going on your trip. Vacations require a lot of planning, and that requires plenty of time and effort.
Whether you planned out your vacation right before going or planned out multiple vacations over the course of several years, you’re likely to commit to the plan. Beal explains how this context has amplified the experience economy despite inflation.
“Travelers are remaining resilient because they are working hard to research trips and planning further in advance,” she said. “These trips that are being planned are bucket-list experiences they want to have with family and friends, and more so than ever, as a people, we are recognizing that rest and rejuvenation is important and worth the cost.”
How To Save Money When Traveling
Inflation hasn’t stopped many travelers, but it’s still good to save money whenever you can. One approach follows the African proverb of eating an elephant one bite at a time.
“Plan pretty far in advance! If you are booking things little by little, it becomes much easier to budget and pay items off. For example, if you’re buying flights [six to eight] months in advance, but you’re using points or paying for hotels [two] months later, that gives some time to prepare,” Beal suggests.
Traveling during the offseason can also help you save money. If you travel when everyone else is traveling, you will end up paying higher prices due to the elevated demand. You can also explore free activities in the area instead of falling into tourist traps.
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