By Doyinsola Oladipo
NEW YORK (Reuters) - Most Millennial and Generation Z travelers are planning bigger 2023 travel budgets but also growing more cost-conscious when booking flights and hotel accommodations, according to travel booking app Hopper.
Early this year, U.S. travel companies told investors they saw no signs of slowing demand despite rising costs, but now, Hopper said, more customers are booking travel only when the price is right.
The trend may eventually hamper growth for airline, hotel and leisure companies that have benefited from rising prices and pent-up demand.
Some 84% of Hopper users, primarily Millennial and Gen Z travelers, plan to spend more on travel in 2023, according to the company's 2023 Travel Trends Report which surveyed 1,500 Hopper users.
About 70% of Hopper users are between ages 18 and 35.
"It's not to say that Millennial and Gen Z travelers just have unlimited budgets and they're spending all their money on travel," said Hopper economist, Hayley Berg. "They are being incredibly price sensitive in order to get more out of their budget."
Hopper users who already tend to be price sensitive and book the cheapest flight available more than half the time are checking prices even more than they did in 2019, before the pandemic, the company said.
Users checked prices of domestic trips in 2022 an average of 16 times before booking, a 33% increase from 2019.
Prices for international trips were checked 50% more often than in 2019.
"Even though they're planning more last minute, they're checking the price way more often before and after they book," Berg added. Travel planning time has decreased 30% when compared to 2019 levels, according to the company.
Although Millennial and Gen Z travelers booked in 2019 travel earlier than the rest of the population, they are growing more averse to booking, the company added.