US consumer spending on things rose slightly and spending on experiences slumped during the COVID-19 pandemic. But partner Jillian Tellez Holub and coauthors find that Americans’ outlays for recreational experiences such as stays at luxury hotels reached their highest level since 1960 after the lockdown ended. The brief uptick in spending on nonessential goods was followed by continued weakness.
Image description:
A line graph tracks the change in US consumer spending on experiences and things as a share of discretionary spending, which is represented by an index of 100 for 1959. The line for experiences (defined as total spend in experiences such as airfare and food away from home less spend on essential services such as hair care and laundry) climbs steadily from 100 to ~160 by 2022, with the only major dip occurring during the COVID-19 lockdown in 2020. The line for things (defined as total spend on goods, less spend on essential goods such as medial products and gasoline) drops steadily from 100 to ~60 by 2022, with a minor uptick occurring during the COVID-19 lockdown.
Source: US Bureau of Economic Analysis; McKinsey analysis.
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To read the article, see “How the world’s best hotels deliver exceptional customer experience,” March 18, 2024.