WSJ Your Money Briefing - Economic Worries Curtail Summer Travel Plans

Episode Date: May 20, 2025

Summer travel plans are hitting some turbulence. Wall Street Journal reporter Rachel Ensign joins host Derricke Dennis to discuss how some families are scaling back or even cancelling their trips. Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

Samsung Vision AI televisions transform screens into intelligent solutions. From reviving old memories with AI upscaling, to seamless hands-free control with universal gestures, the next vision in television is here. Learn more about Samsung Vision AI televisions at Samsung.com. Here's your money briefing for Tuesday, May 20th. I'm Derek Dennis for the Wall Street Journal. If you're anything like me, money is tight and summer vacation plans are up in the air. Taking a big, expensive, far away trip just isn't in the budget. A lot of people are still planning on taking some kind of trip, but like a car trip or

a trip to a national park that's free and they'll be hiking, which you don't have to necessarily pay much to do. We talked to Wall Street Journal reporter Rachel Insight about the changes some families are making to keep their finances in check. That's after the break. to help change mental health care forever? Join the Sunrise Challenge to raise funds for CAMH, the Centre for Addiction and Mental Health, to support life-saving progress in mental health care. From May 26th to 30th, Canadians will rise as one and show those living with mental illness and addiction

that they're not alone. Help CAMH build a future where no one is left behind. So, who will you rise for? Register today at sunrisechallenge.ca today at SunriseChallenge.ca. That's SunriseChallenge.ca. It could be a summer of discontent for Americans scrapping their travel plans to save money. Wall Street Journal reporter Rachel Ensign joins me and Rachel, sounds like big expensive vacations are becoming more of a luxury than a necessity in these uncertain economic times. So what's happening is consumers are feeling pretty uncertain and cautious and they're

downgrading their vacations and they're canceling their vacations because of that. Would you say that they're more and more cutting out their trips altogether or just shifting from a plane ride or to a road trip? What's interesting is that at the highest end, so the wealthiest customers who are taking those huge international trips, the really expensive trips. They're flying in business class. They don't appear to really be cutting back but everyday Americans who are more budget conscious are certainly cutting back and

there's some data that showed that the number of people who say that they're planning a vacation in the next six months has planning a vacation in the next six months has dropped pretty significantly. And all of the airlines have said that they're seeing that too, from the like domestic leisure customer who's not at the highest end. So let's drill down on those numbers. You know, you mentioned in your article, only about 40% of Americans are planning to travel in the next six months. Is that unusual? It is significantly lower than at this time last year, which was about 44%. And it was like quite low in the pandemic when people couldn't travel or were afraid of getting COVID. It's pretty interesting to look at the state over the last 10 years. 40% is really low compared to pre pandemic times. Did you get a sense of how much of a savings the people you interviewed were seeing by

cutting back on their travel? It really depends on the family and what their travel budgets are, what their financial situation is. I interviewed a family who they're an older couple who's coming up to New York to visit their family. They live in Florida and they're driving instead of flying. They would have to spend on airfare and parking and dog boarding and stuff. They're probably saving 800 or a thousand

dollars, but I also interviewed a retired couple who was planning a $20,000 trip to Europe and now they're doing like a $10,000 trip to Disney World. So even though they're still spending a lot, it's significantly less. What are the wannabe travelers planning to do this summer then if they're cutting back? A lot of people that I spoke to are still planning on taking some kind of trip, but like a car trip or a trip to a national park that's like free and they'll be hiking, which you don't have to necessarily pay much to do. Some people are just doing a staycation. They're going to take time off. It does seem like people are still taking time off, but

they're going to stick around close to home. And you mentioned about the wealthy and how they don't seem to be cutting back, at least not at the level that regular folks are. Talk a bit more about the wealthy here. Which way are they leaning? It's a really important question, right? Because the wealthy people have really been powering the economy in the last year or two. We did a big story on this, and essentially,

people who are middle class or working class, they're still really struggling from higher prices on everything. So they are not really spending so much, they're cutting back a little bit. But wealthy people have actually had this massive boom in their net worth, their finances, they've been feeling really good and spending a lot. And the question is, will that continue? And so far, it does look like they are a group that is bucking this trend of cutting back on vacations.

So they are still spending on vacations and they're still spending pretty lavishly. Rachel, we've been following a lot of stories about consumer sentiment. They're cutting back on shopping. They're feeling the pinch at the grocery store. Hearing about them curtailing their travel plans is interesting. That's the one area it seems that they are able to get real savings here, right? Americans are feeling pretty bad about the

economy, especially folks who aren't big supporters of President Trump. And the question is, is that going to translate into cutting back on spending? And it seems like so far, overall spending has really held up. So people feel bad, but they're still going in the grocery store and spending a similar amount. They're still buying clothes and stuff like that. But the one thing that there has really been quite a dramatic drop in is travel spending. And the reason why that's happening is it's just a thing that is very discretionary to people.

And if you cancel that trip, you can save like thousands of dollars. And you talked to a few other people for your reporting who had similar stories of being able to see some significant savings by changing their travel plans. Yeah. So, you know, we spoke to one woman who was in this category of worker whose livelihoods are really affected by these big changes under the Trump administration. She's a professor. She got a good amount of funding from USAID, which has obviously been dismantled. And she told me that the day she got the news that her grants were being halted, one of her first thoughts was, oh my gosh, I have to cancel my vacation because she immediately went into cost saving mode. How do I protect my finances and my family's finances?

And the first thing she thought was, there's this one thing that I could just not do and save $7,500. She did actually wind up booking a much more paired back version of the vacation, driving instead of flying and just staying at a lower end rental home too. That's Wall Street Journal reporter Rachel Ensign. And that's it for your money briefing. This episode was produced by Ariana Asparu with supervising producer Melanie Roy. I'm Derek Dennis for The Wall Street Journal. Thanks for listening.