Credit Cards and Convenience: The Role of Digital in Travel Spending

Planning and booking — and especially paying for — trips used to be a largely analog affair.

Paper-based brochures and travel guides in hand, with excited phone calls to travel agents. Signed contracts, paper checks, navigating across everything from airlines to tour guides — it all was time consuming, to say the least.

The shift to online channels to manage the traveling experience, in effect getting online as one cements plans to get away from it all, is also marked by a digital shift in payments.

In the report, “How People Pay: Payment Choice Depends on Shopping Channel,” we found a widespread movement across more than 2,700 consumers to translate everyday and often cumbersome tasks to online, self-service interactions that save time, allow for some comparison shopping, and efficient, transparent payment modalities.

As we’ve noted in past coverage, the generational gap that has historically existed between younger and older generations has been closing, which indicates that all manner of consumers recognize the benefits of logging on and getting things done, and it also speaks volumes to the ways in which the online commerce experience has improved through the year.

Travel’s a standout, as it’s the category where we’ve seen the largest percentage of consumers buying various travel-related services and tickets online. In fact, with the exception of groceries, where penetration has been low at the mid-teens percentage of consumers (and thus is coming off a low base), travel’s the only segment to have seen a notable bump year over year in online activity.

Growth in the Digital Shift

The data shows that as of November of last year, 69.5% of consumers overall bought travel-related services online, which is a bit lower than the 70+% levels seen over the peak spring and summer months. However, the latest reading is also higher than the 66.5% seen a year ago. By way of contrast, the share of consumers making retail payments online has remained flat, at about 25%.

Travel is also the only category where we’ve seen a relatively uniform level of spending online across all demographics. In fact, the generations that had reported making their last travel-related purchases online were incrementally higher in older cohorts than younger: 70% of baby boomers and a whopping of 76% of Gen X consumers had paid for travel online, compared to 68.5% of Gen Z consumers who reported doing so.

Though travel is a discretionary purchase and may be a luxury that’s reconsidered as consumers still grapple with inflation, when travel-related spending does occur, the digital behaviors, as described above, are certainly entrenched.

Perhaps not surprisingly, credit cards have been chosen as the most popular choice for spending online, and by extension this would tie into spending on travel services too. For one thing, the tickets (and hotels and itineraries) are big-ticket purchases. There’s also the appeal of having fraud protections in place that can help safeguard against financial damage inflicted should account details be compromised. And consumers earn cash back and other rewards when they are using their cards.