Retail therapy out and experiences in for travellers with money no object, Mastercard report reveals

Global credit card transactions mapped by Mastercard show people are spending more on experiences than splurging in shops.

Data from financial services company Mastercard shows a significant rise in spending on everything from dining out to tours.

The pandemic obsession with online shopping has given way to spending on experiences, according to credit card data which shows a hunger for entertainment and adventure outside of the home.

Financial services company Mastercard’s travel trends report is based on millions of anonymous and aggregated transactions.

As of March 2023, global spending on experiences was up 65 per cent on 2019 levels, while spending on things such as clothing and household goods climbed a modest 12 per cent.

Mastercard Economics Institute chief economist for Asia David Mann said the shift was apparent in all countries, even in markets where retail therapy was traditionally more popular than experiences.

“Notwithstanding the challenge of higher costs, the demand for doing all of the things you could not do during the pandemic is a pattern we’ve seen occurring all over the world,” Mr Mann said.

“Even after a good year of being open longer than the Asia-Pacific region, if we look at say the US, the demand is still skewed in that direction even up to this point.”

The data came as no surprise to Experience Co chief executive John O’Sullivan, who said the pandemic had increased people’s appetite for adventure.

As a result, Experience Co was seeing strong demand for tandem skydiving, treetops adventures and reef cruising, initially from domestic travellers and now international visitors.

“Our income per passenger has increased, not just because of inflationary pressures but because they’re buying a higher altitude of skydive and then putting a video camera on it,” Mr O’Sullivan said.

“The average spend per passenger is now about $460, whereas pre-pandemic it was about $370.”

Travellers are splashing out on experiences that go well beyond merely sightseeing.

He said the willingness to splash out on experiences reflected the frustrations of the past two years, and the value people placed on a family holiday.

“Even during tough economic times, it’s the last thing to get cut,” Mr O’Sullivan said.

“I’ve been reading in recent days that people are looking to pull their kids out of private school, or they’re selling the second car or caravan but they still want to holiday. They want to get away from what can be a pretty tough day-to-day existence.”

Despite the relatively slow return of international tourists, the Mastercard data shows Australia is the favourite destination for travellers from the Asia Pacific region in March.

There were more bookings from within the region for Australia than the US, Hong Kong or Singapore, while Japan and the UK ranked fifth and sixth.

It was a different story in other parts of the world with Europeans preferring to holiday in the UK, Spain and the US, and North Americans heading to Mexico, ahead of the UK and Dominican Republic.

Mr Mann said that could change as airlines increase the availability of seat numbers into Australia as they were still only two thirds of what there was in 2019.

“The cost (of travel) is higher and the supply is less so that’s a challenge we cannot ignore,” he said.

“It’s going to be, I would say, another year-plus of full global travel recovery because we still do have those supply constraints around the well.”

Another trend identified by the Mastercard data was an acceleration in business travel, which was growing at the same pace as leisure holiday bookings.

And Mr Mann said there was no sign that “the revenge travel bump” had passed.

“As we look ahead to the peak summer travel season, the big question is whether flight and accommodation supply can keep up with demand,” he said.

Originally published as Retail therapy out and experiences in for travellers with money no object, Mastercard report reveals