Young Travellers Say They’ll Live Now, Make Money Later
Gen Z vacationers say they are making rigorous budgets behind the scenes to keep track of costs.
Gen Z vacationers say they are making rigorous budgets behind the scenes to keep track of costs.
Cameon Wade felt like the pandemic had robbed her of her early 20s.
So, after getting into a film program at Prague Film Institute, she travelled by herself across Europe this summer. Originally, she was planning to only travel for the program, but ended up going to seven cities in five countries in the course of three weeks to make up for the lack of travelling during the pandemic.
“The whole pandemic, I felt like the years were taken away from what was supposed to be the best years of my life and college,” she said.
Young people have always taken trips during college years, gap years or after college. This year, however, the winding down of Covid-19 travel restrictions in many countries gave many the freedom they didn’t have in the past few years.
Many of these students or recent graduates are now taking more elaborate and in some cases more expensive vacations than they expected to take at this age, say some young graduates. Overall, 72% of Gen Zers between the ages 18 and 25 surveyed in April were likely to take a summer vacation, more than any other age group, a recent Bankrate survey found.
Even so, those taking larger vacations recognize it isn’t an easy decision. In the U.S., young people between the ages of 18 to 34 had the lowest median weekly checking-account balances when compared with older age groups for the past two years, according to a recent study by JPMorgan Chase Institute.
To make up for the extra costs, these young vacationers say they are making rigorous budgets and doing financial planning behind the scenes to keep costs from skyrocketing.
Many say they believe the vacations themselves will deliver justifiable returns down the road. On TikTok, thousands of young people have posted videos of their travels with the phrase “I will make my money back.” Most videos show beautiful landscapes or dinners, but also an awareness in the captions of the financial sacrifice that comes with travelling.
“You want to frame it in such a way that, yes, this is a financial sacrifice,” said Scott Rick, an associate professor of marketing at the University of Michigan, who studies emotional causes and consequences of consumer financial decision-making. “But this is a calculated decision on my part.”
Ms. Wade posted her TikTok video in June with the caption “I’ll make my money back, but I’ll never be 20 scootering around Paris at night again.” More than three million viewers saw the clip.
After getting accepted to the film program, Ms. Wade started doing research about how much she needed to make the trip happen. “Once I realized it was possible, it was a no-brainer,” she said.
She said she paid for all of her expenses herself, using her income from her four poetry books and a part-time job to fund the trip. She also took advantage of student discounts at museums, stayed in cheaper hostels, opted for the cheapest meal options and relied on public transportation to stay on budget.
The idea behind these vacations is that an experience will have a longer lasting social benefit. Cassie Holmes, a professor at UCLA’s Anderson School of Management, said several studies back up the thinking that experiences lead to greater initial happiness and provide greater lasting happiness than material possessions.
As people get older, they start to realize that engaging in experiences will bring them greater happiness, she says. In many ways, the pandemic simply got younger people to realize this benefit earlier.
“Vacations are the experiences that not only sort of generate initial happiness, but they continue to make you feel happier as you revisit them,” Ms. Holmes said.
Isabelle Lieblein, 22, was supposed to study abroad in Germany in 2020, but the pandemic disrupted her plans.
“Before Covid, I said no to trips to save up to go to Germany, and then it didn’t happen. It really changed my outlook,” she said.
Ms. Lieblein kept working throughout the lockdown to build up her savings and spent a semester studying abroad in Germany after the travel restrictions were lifted. She travelled to 19 countries during her study abroad period and paid for the entire trip with her savings.
Throughout her backpacking adventures in Europe, Ms. Lieblein was interviewing for jobs with plans to start after her graduation from Kettering University in Flint, Mich., and her trip. Ms. Lieblein started a full-time job as a quality engineer in February. On TikTok, she shared a video encouraging other young people to invest in experiences such as travel after she ended up making the money she spent back.
Having this experience, she said, is worth the coming financial challenges.
“I wanted to take advantage of it even if that means that I’m eating ramen until I get my first paycheck when I get back, that’s worth it to me,” she said.
Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: August 19, 2022.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
As geopolitical tensions rise, Taiwan is shifting its economy to rely more on the U.S. and other countries but at a cost
TAIPEI—For years, Beijing hoped to win control of Taiwan by convincing its people their economic futures were inextricably tied to China.
Instead, more Taiwanese businesses are pivoting to the U.S. and other markets, reducing the island democracy’s dependence on China and angering Beijing as it sees its economic leverage over Taiwan ebb.
In one sign of the shift, the U.S. replaced mainland China as the top buyer of Taiwanese agricultural products for the first time last year.
Electronics firms such as chip maker Taiwan Semiconductor Manufacturing Co. are also selling more goods to American and other non-Chinese buyers, thanks in part to Washington’s chip restrictions and Apple’s bets on Taiwanese chips.
Overall, Taiwanese exports to the U.S. in the first 10 months of 2023 were more than 80% higher than in the same period of 2018, Taiwanese government data shows. Taiwanese exports to the mainland were 1% lower—a major change from a decade or so ago when China’s and Taiwan’s economies were rapidly integrating.
Taiwan’s outbound investment has also shifted. After flowing mostly to mainland China in the early 2000s, it has now moved decisively toward other destinations, including Southeast Asia, India and the U.S.
Taiwanese electronics giant Foxconn, which assembles iPhones in mainland China, is expanding in India and Vietnam after Apple began pushing its suppliers to diversify.
Chinese state media recently reported that China had opened tax and land-use probes into Foxconn. Though Taiwanese officials and analysts interpreted the probes as a sign that China wants Foxconn founder Terry Gou to drop plans to run in Taiwan’s presidential election in January, some have said Beijing may also be trying to pressure Foxconn into resisting decoupling with China.
“Any attempt to ‘talk down’ the mainland’s economy or to seek ‘decoupling’ is driven by ulterior motives and will be futile,” said a spokeswoman for Beijing’s Taiwan Affairs Office in September. “The mainland is always the best choice for Taiwanese compatriots and businesses.”
Fully decoupling from mainland China’s economy likely isn’t possible, and would be disastrous for Taiwan, not to mention China, even if it were.
Foxconn and other major Taiwanese companies depend heavily on China for parts, testing and buyers. Some 25% of Taiwan’s electronic-parts imports still come from the mainland.
If China’s weakened economy returns to strong growth, it could shift the calculus back in favor of the mainland, where the Communist Party claims Taiwan despite never having ruled it. About 21% of Taiwan’s total goods trade this year has been with mainland China, versus 14% for the U.S., though the U.S. share has risen from 11% in 2018.
“My hunch is that the large manufacturing sectors will try to stay in the Chinese market, even with harsh conditions,” said Alexander Huang, director of the international affairs department of the opposition Kuomintang Party, whose supporters include business people with mainland ties. “If you talk to those business owners, they say, ‘Nah, no way will I give it to my competitors.’”
Even so, many forces are pushing Taiwan to rewire its economic relationship with China.
Trump-era tariffs and Biden administration export controls have raised the cost of sourcing from China, and in some cases prohibited it. U.S. firms are pushing their Taiwanese suppliers to diversify sourcing, and rising wages in China have made it less attractive than before.
Long-running shifts in Taiwanese sentiment toward China—and China’s own efforts to punish the island using its economic leverage—are also factors. China has banned Taiwanese agricultural products such as pineapple and, in 2022, grouper fish, and restricted outbound tourism to Taiwan.
Those restrictions to some degree have backfired, pushing Taiwanese businesses to look elsewhere.
Chang Chia-sheng, who runs a fish farming operation in Taiwan, said his main export target a decade ago was mainland China. But as geopolitical tensions climbed, he looked elsewhere. Sales to Americans have jumped fivefold since 2018, he said. “In the U.S., things just seem to work out more easily,” Chang said.
The U.S. and Taiwan reached an agreement in May on a number of trade and investment measures to deepen ties, though the deal stopped short of reducing tariffs.
In the June quarter of 2023, 63% of revenue at TSMC, which makes most of the world’s most cutting-edge logic chips, came from the U.S., up from 54% in the same period in 2018, according to S&P Global data. Just 12% of TSMC’s revenue now comes from Chinese buyers, down from 22% in the second quarter of 2018.
Taiwan’s government is also encouraging closer economic links with Southeast Asia, South Asia, Australia and New Zealand. Its “New Southbound Policy,” rolled out in 2016, has been the subject of fierce debate in Taiwan, with the Kuomintang Party saying steps to boost relations—like handing out scholarships—aren’t worth the cost.
Exports to “New Southbound” partners have risen, however, to $66 billion in the first nine months of 2023, about 50% higher than the same period in 2016.
“Frankly speaking, we’re responding reactively” to the need for more diverse trading partners, Taiwan’s Economic Minister Wang Mei-hua said. “Taiwan needs to manage the risks on its own, but we also need our allies to join us more in mitigating these risks.”
Together, the U.S. and the six largest Southeast Asian economies accounted for 36% of Taiwanese exports in the third quarter of 2023, according to data from CEIC, surpassing the percentage sent to mainland China and Hong Kong on a quarterly basis for the first time since 2002.
In September, Taiwan sent less than 21% of its exports to the mainland, the lowest percentage since the global financial crisis.
Taiwanese foreign investment into mainland China, steady at around $10 billion a year for most of the early 2010s, plummeted in late 2018 and has since been running at about half that level, according to Taiwanese government data. In 2023 so far, just 13% of Taiwan’s investment went to mainland China; 25% went to other Asian locations, and nearly half went to the U.S.
A survey of Taiwanese businesses conducted last year on behalf of the Center for Strategic and International Studies, a Washington think tank, found that nearly 60% had moved or were considering moving some production or sourcing out of China—a significantly higher rate than European or American firms.
Jay Yen, chief executive of Yen and Brothers, a Taiwanese frozen-food processing company, said his firm received a government subsidy of around $75,000 to market his products to American consumers. China now only accounts for about 3% of its revenue, he said.
That said, “if you really have to consider the risks of a war between the U.S. and China and its potential impact on Taiwan, you might want to place your bets on a third country—neither China nor the U.S.,” Yen added.
After China began to open up its economy in the late 1970s, Taiwanese businesses were among the first investors.
By the 2000s, China seemed to be succeeding in its strategy of integrating the two economies, with more than 28% of Taiwan’s exports going to the mainland in 2010, from less than 4% a decade earlier.
Direct flights between the two sides were normalised for the first time in decades. Mainland tourists were allowed to visit Taiwan on their own.
By 2014, the tide was turning as more Taiwanese grew worried about over dependence on China. Student demonstrators protested against a trade pact, later abandoned, that would have deepened ties with China. President Tsai Ing-wen, who took office in 2016, has pushed to diversify Taiwan’s economy.
China has responded by moving trade issues more into the spotlight.
In April, it opened an investigation into Taiwanese trade restrictions that it says limit exports of more than 2,400 items from the mainland to the island in violation of World Trade Organization rules. In October, China’s Ministry of Commerce announced the probe would be extended until Jan. 12—the day before Taiwan’s coming election.
Taiwan’s government has called the probe politically motivated.
Chinese officials have implied that Beijing could suspend preferential tariff rates for some Taiwanese goods in China under a 2010 deal signed when Kuomintang’s Ma Ying-jeou was president. Beijing has also reacted angrily to Taiwan’s recent trade agreement with the U.S.
For Taiwanese companies, building and operating new factories in places other than China isn’t cheap or easy. Protests have at times disrupted operations at Indian plants operated by Foxconn and Wistron, another Apple supplier. In September, a fire halted production at a Taiwanese facility in Tamil Nadu.
Still, some Taiwanese businesspeople have clearly soured on China.
“The electronics industry has already become a Chinese empire, not a Taiwanese one,” says Leo Chiu, who worked in mainland China in quality control for an electronics manufacturer for 14 years before concluding he couldn’t move up further there and returning to Taiwan in 2019. Many of his old colleagues have left, he said.
“If Xi Jinping steps down, there’s still a chance it could change,” says Chiu. “But I think it’s very hard.”
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’