Despite the financial risks, Gen Zs are prioritizing summer travel and are willing to take on debt to make it happen.

Move over family travelers.

Older travelers are spending less on vacation plans this summer compared to Gen Zs, who are increasing their vacation plans and spending more.

According to a report released by Bank of America on May 20, Gens Z are planning international trips at higher rates than other generations, no longer satisfied with road trips to their parents' homes.

A survey of over 2,000 Americans revealed that Gen Zs are more likely to travel for extended periods and take costly vacations at a higher rate.

Ready to spend

This year, a rise in travel spending is being led by Gen Zs and millennials, as stated in an April report from PMG.

The survey of 1,800 adults in the US, UK, India, Germany, and China found that 65% of Gen Zs and 72% of millennials plan to spend more on leisure travel this year, compared to 54% of Gen Xers and 40% of baby boomers.

What sets Gen Z's travel funding plans apart from other age groups is unique.

A new report from Morning Consult reveals that the number of Gen Zs who are traveling due to having the savings to do so has decreased since August 2023.

Lindsey Roeschke, Morning Consult's travel and hospitality analyst and the author of the report, stated that they are not stopping despite the obstacles.

"Roeschke stated that the turbulent time in which Gen Zers have grown up has greatly influenced their travel habits."

What's the point of delaying traveling to one's desired destination in order to save, when there's a possibility of another pandemic, financial crisis, war, or other significant event that may prevent them from ever reaching it? she asked CNBC.

Gen Zs will prioritize finding ways to reduce travel expenses rather than canceling or delaying their trips, as Roeschke observed.

She informed CNBC that they are seeking ways to reduce expenses through various methods, such as traveling during the shoulder season, utilizing technology to compare prices, utilizing credit card points, trading off in other spending areas, or obtaining a side hustle to fund their travels.

Using debt to finance summer trips

A survey by Bankrate found that 42% of Gen Zs and 47% of millennials plan to use debt to finance their summer trips.

The most common ways to fund summer vacation trips, according to the report, are:

• credit cards paid over multiple months – 26%
• "buy now, pay later" services – 8%
• borrowing from family and friends – 6%
• personal loans – 5%

The carefree attitude of not worrying about debt is a concern among older generations who traveled less in their 20s and raises eyebrows among financial experts like Ted Rossman.

Rossman expressed concern about the high credit card rates and the potential for debt accumulation from discretionary purchases, such as vacations, despite not wanting to restrict people's enjoyment.

A study by Empower found that nearly a quarter (24%) of travel-happy Gen Zs feel pressured by friends to take trips they can't afford, despite not necessarily feeling optimistic about their finances.

According to Morning Consult, Gen Zs are more likely than other adults to say that their own finances, the broader economy, and climate change negatively impact their willingness to travel.

"However .. they're still doing it!" Roeschke said.