Academic journal article Monthly Labor Review

Consumer Expenditures on Travel, 1980-87

Academic journal article Monthly Labor Review

Consumer Expenditures on Travel, 1980-87

Article excerpt

With worldwide sales of $2 trillion, travel and tourism are the world's largest civilian industry. At the same time, Americans are apparently spreading their vacations more evenly throughout the year, thus smoothing the seasonal variation seen in patterns of travel. The industry is expected to grow during the 1990's. For example, the Bureau of Labor Statistics projects strong increases in the employment of travel agents, pilots, and flight attendants. Given the importance of this industry and the changing habits of its consumers, it is interesting to compare recent patterns of expenditure with earlier patterns to determine whether other significant changes have occurred. This report is based on data collected in the 1987 Consumer Expenditure Survey.4

In an earlier study, Alice Lippert used results from the 1980-81 survey to examine travel spending of urban consumer units' in 1972-73 and 1980-81. She found few differences in spending between the two periods.6 However, between 1980 and 1987, some differences were observed. Although consumers spent the same proportion of their total budgets on vacations, they allocated their dollars differently.

Tables 1 and 2 show demographic characteristics, travel expenditures, and detailed data by income quintile and age of reference person in 1980 and 1987.

Vacations and pleasure trips

The main components of the budget for vacations and pleasure trips to be discussed here are transportation, food and beverages, and lodging.

Americans chose nearly identical travel budgets in 1980 and 1987. Vacation and pleasure trips accounted for 3.6 percent of total expenditures for all families in 1980 and 3.7 percent in 1987. In 1980, ranked by income, Americans in the middle-income group allocated the lowest share (2.8 percent) of their spending to vacations and pleasure trips. The highest income group allocated the most (4.4 percent). In 1987, the two lowest groups spent the smallest share (2.8 percent); not surprisingly, the wealthiest group still spent the highest share (4.3 percent).

When classified by age of householder, average travel expenditures as a proportion of the budget ranged from 3.0 percent (for those 25 to 34) to 4.6 percent (for those 55 to 64) in 1980. In 1987, the range widened from 2.8 percent (for those 25 to 34) to 4.9 percent (for those 65 to 74).


Of the four components of the travel budget, the largest percentage change and only decline-in expenditures was in transportation. This was due to a large decrease in expenditures for gasoline and motor oil. Other transportation expenses increased.

For all families, transportation expenditures fell as a share of the travel budget from 47 percent in 1980 to 39 percent in 1987. The largest decline was for the middle-income group, whose share decreased from 52 percent to 40 percent, reflecting a decline in gasoline and motor oil expenditures. As expected, upper-income households allocated more for airfare expenditures than did middle-income households, but gasoline shares declined more for upper income households.

Similarly, families ages 25 to 74 allocated between 6 percent and 10 percent fewer vacation dollars to transportation in 1987 than they did in 1980. The decline for families under 25 was not statistically significant; the share spent by families over 75 was nearly identical in both years.

Gasoline. Gasoline and motor oil expenditures for travel decreased-not surprisingly-about 14 percent for all families. In 1979 and 1980, oil shocks sharply drove up gasoline and motor oil prices, resulting in large shares of travel expenditures being spent on transportation costs. In 1986, prices plummeted throughout the year and did not fully recover by 1987, resulting in lower transportation costs even for the same level of travel expenditures. According to the Consumer Price Index (CPI-U), prices of motor fuel, motor oil, coolant, and other products declined 21 percent from 1980 to 1987. …

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