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More evidence emerges of how consumer spending has changed in the past year. Consumers are using their debit cards more for transactions at hotels and motels within the travel sector, according to the PSCU Payments Index for April.
Released Thursday, the index shows that debit card use accounted for 35% of transactions at hotel and motels, up from 29% in March 2019 and 27% in March 2020. Credit use at hotels and motels has increased, too, reaching 39% in March. That’s up from 33% in 2019 and 34% in 2020. PSCU, a St. Petersburg, Fla.-based credit union service organization, publishes the monthly index based on data from financial institutions it works with.
The travel sector has been particularly affected by the Covid-19 pandemic and restrictions on travel. Hotel and motel spending with debit experienced a sharp improvement in March following the latest stimulus payments, likely timed around spring break, PSCU says in its report. “Prior to that, in the second half of 2020, purchases were mainly below the 2019 baseline with the exception of Labor Day week,” the report says.
Other travel segments are showing some life, albeit at different pacing. Overall airline purchases are slowly climbing back from the low point in April 2020. For March, debit transactions are down 6% from March 2019 and credit transactions down 33%. “Each have shown monthly improvement, with March 2021 marking the most notable jump since the onset of the pandemic,” PSCU says.
Auto rental has fared the best in travel, particularly in debit transactions, which are up 38% in March from the same month in 2019. Credit transactions have yet to return to positive territory, the report says, and are down 8% in March 2021 from March 2019. The one positive is that when looking at March 2021 and March 2020, credit transactions are up 56%.
“Historically, the breakout of the travel sector has been somewhat consistent by card type. As fewer people traveled during the pandemic, there has been more spending in hotels and rental cars and less spending in airlines and transportation,” the report says.
Though business travel remains deflated, some consumers are visiting amusement parks. PSCU’s data shows that credit transactions at these destinations are up 159% from March 2019 to March 2021. Debit transactions are up 20% for the same period.
The March PSCU report marks the first monthly version of what had been a weekly report started last year to gauge the impact of pandemic-related restrictions on electronic payment activity.
