U.S. consumers are now spending more on travel and dining as social distancing mandates are eased, and they are increasingly tapping their credit lines to splurge on such activities.
According to American Express CEO Steve Squeri, domestic travel bookings are nearing full recovery and demand for international travel is also fast ramping up.
“When we look at our travel numbers, our travel bookings in May were 95% of what they were in May of 2019,” Squeri said.
“We also believe that by the end of the year in the U.S. we will have a full consumer recovery from a travel perspective, and overall by the end of the year I think globally we’ll probably be about 80% of what we were in 2019,” he added.
This past weekend alone, the Transportation Security Administration screened more than 2 million people a day on both Friday and Sunday — the highest since March 2020.
That is still slightly less than three-quarters of the travel volume on the same day in 2019.
American consumers — millennials especially — are also spending more on eating at restaurants. Last month, U.S. consumer spending on restaurants reached 85 percent of 2019 levels.
“The people that are really spending a lot in restaurants [are] millennials — 130% in April of what they spent back in 2019,” he added. “We believe that that’s going to continue to move forward.”
While American consumers are spending more on travel and dining, they are still maintaining a solid financial footing. Consumers’ personal savings have doubled and delinquencies are at their lowest, Squeri told CNBC’s Jim Cramer.
“When you look at the U.S. economy right now, I think it’s really starting to come back,” he said. “Credit numbers are not like anybody thought they were going to be.”
These improvements also bear good news for the travel retail industry, which was hamstrung by the global slowdown that came into effect to control COVID-19.