Soaring Travel Costs Are Weighing on Even the Wealthiest Vacationers, WSJ Study Shows

Wealthy individuals remain just as interested in travelling as they were last year, but costs have become a larger factor in their plans, according to a Global Travel Study conducted by WSJ Intelligence between June 27-July 19.

Of the 879 Wall Street Journal readers surveyed—who had an average age of 56, were 79% male, and had an average net worth of about US$3.5 million—94% intend to travel for leisure in the next 12 months, down just 1% from 2023. Additionally, 64% plan to travel internationally, up from last year’s 60%.

Travellers are most concerned about costs amid ongoing inflation and other economic challenges, even as 80% of respondents say they plan to increase or maintain their travel spend compared to last year.

The cost of flights and hotels is the top factor of importance for WSJ readers, with 78% concerned about prices, a nine-point increase from 2023.

“Travel is still on the up—our readers are still really enthusiastic,” says Carolyn Romano, associate director of Luxury Lifestyle Intelligence at The Wall Street Journal. “But at the same time, it’s yet another year of market volatility and inflation, so I just think they’re being a little bit more thoughtful about the way that they’re traveling.”

Availability of flights and hotels is the second-biggest issue for travellers, with 76% of readers responding that it is a factor of importance for them.

Notably, as factors of importance, both loyalty programs and discounts and deals are up 10 percentage points year over year. Romano says this increase is “pretty significant.”

“Our reader approaches every purchase as an investment of some sort, and even our reader is still taking all of these factors into consideration,” she says.

Despite rising costs, the post-Covid enthusiasm for travel remains, with 70% of respondents traveling more than they have in the past. Over the next 12 months, WSJ readers’ average anticipated spend on leisure travel is US$18,305, up from last year’s US$18,250.

As for destinations, 86% of respondents are considering traveling to Europe, down just 1% from last year. Italy is the top European country of choice—superseding the U.K.—seeing a 9% annual increase in interest.

Though most destinations, both international and domestic, included in the survey saw similar interest as last year, traveling to Asia is up 10 points from 2023, with 40% of respondents considering booking a trip to the continent. Japan ranks the highest, with 61% of respondents considering traveling there, up 6% from last year.

When making travel plans, 72% of WSJ readers say they go to family and friends for recommendations. Only 13% report consulting a travel agent, though people taking cruises are much more likely to use a travel agent.

Monthly electric vehicle deliveries at NIO , XPeng , and Li Auto set a record in November. Things are looking even better for December.

EV demand isn’t an issue in China. Pricing, however, continues to be a struggle.

Sunday, NIO reported 20,575 deliveries for November, up about 29% from a year ago. Based on recent guidance, given with third-quarter earnings , NIO expects to deliver about 32,000 cars in December, a record, and up about 77% from a year ago.

Li reported 48,740 deliveries for November, up about 19% from a year ago. Based on recent guidance from Li’s third-quarter earnings , the company should deliver about 65,000 cars in December, up 29% from a year ago.

XPeng delivered 30,895 vehicles in November, up about 54% from a year ago. The midpoint of its fourth-quarter guidance, given on its third-quarter earnings report, was 89,000 cars, implying December deliveries of about 34,000 units.

December’s implied numbers would be a record for all three auto makers. EV demand in China is still solid. The bigger problem is competition. Citi analyst Jeff Chung recently wrote that the Chinese car market is still concerned about a “potential price war in 2025.”

He projects 2024 all-electric vehicle sales of 7.8 million units, up about 28% from 2023. Sales in 2025 should be up another 17% to 9.1 million cars. The problem: The industry has the capacity to make 28 million all-electric cars annually, according to Chung’s calculations. Capacity utilization that low typically isn’t great for profit margins.

At least there is demand. Combined, the three Chinese EV makers sold 100,210 vehicles in November. That’s a monthly record. December guidance implies about 131,000 cars sold, another record.

Coming into Monday trading, NIO stock was down about 51% this year while the S&P 500 was up about 26%. XPeng and Li shares were down 17% and 37%, respectively.