During the coronavirus pandemic, travel risks caused many vacations to be canceled, re-envisioned as day trips, or transformed into staycations.
The landscape of consumer spending is changing, and households are pivoting away from spending money on travel and tourism. But what are they spending money on instead?
We surveyed 1,878 homeowners in the U.S. to find out. As many Americans are staying home more, it comes as no surprise that they’re now spending more money to fix up their homes.
Learn more about the change in spending habits below and discover what people are purchasing instead of a summer vacation.
How Are People Spending Vacation Money During COVID-19?
As the threat of COVID-19 persists, households across the country have canceled summer vacations. Plane tickets, lodgings, and other vacation activities have been put on hold.
For some, vacation cancelations were a personal choice to stop the spread and minimize risk. For others, travel restrictions between states or countries made their vacation plans impossible.
We surveyed 1,878 people from across the country to see what they’re using this money for instead. Their responses reveal that a large portion of people are spending their vacation money where they’re spending their time — at home.
About 29 percent of respondents said they are using money from their canceled vacations to improve some area of their home.
This rate was even higher for those age 35 to 44. Among this age group, 34 percent will be using their vacation funds for home improvements. The data also shows there are clusters in Maryland, Arkansas, Kentucky, and Wyoming where between 40 and 50 percent of respondents are using vacation money for home improvements.
The changing spending patterns are a part of a trend that Nielsen calls the “homebody economy.” Around the world, even as lockdowns are lifted, consumers are continuing to invest in their home lives.
But What Home Repairs Are People Doing During COVID-19?
For those 29% who are investing in their home, what type of improvements are they making?
There are key home repair trends during COVID-19. About half of consumers are thinking about the big picture and are tackling structural repairs. The other half are seeking to create at-home environments that replace some of the experiences found in public places. For example, a home workout room can replace a gym membership.
Our survey respondents reveal what types of home repairs they’re investing in this summer since they won’t be taking a vacation.
What Parts of Your Home Are You Investing in During COVID-19?
- Structural home repairs: 50.9%
- Outdoor entertaining: 29.5%
- Home additions/new rooms: 8.6%
- Gym: 5.5%
- Pool: 5.5%
Because people are spending more time at home, the comfort of the home and the health of the structure are increasingly important. These updates could reduce dampness, improve air quality, and make it possible to start additional home improvement projects such as refinishing the basement. It’s also worth mentioning that people feel more confident reinvesting in their own property as a way to retain, restore, or improve value.
How Much Money Is Shifting from the Travel Sector to Home Repairs?
In June, the TSA reported that the current number of airplane passengers was just 16 percent of the numbers from 2019.
How much are people saving by not taking vacations during COVID-19?
When we look at all types of expenses including airfare, transportation, lodging, tourism, and meals, the average vacation costs $1,145 per person or $4,580 for a family of four.
In comparison, the average cost of a staycation is just $500 per family. That’s a $4,080 savings while families visit nearby attractions rather than remote destinations.
This is certainly a reshuffling of household budgets, but on the macro scale, there could be a reshuffling as well. The U.S. travel and tourism industry accounts for $1.6 trillion in economic output. If household trends persist throughout the economy, the travel sector could shrink while the home repair sector grows.
Are Home Repairs a Good Investment During COVID-19?
Times of economic uncertainty can be a reset for many household budgets. Spending habits are changing as people look closely at their personal finances, and many people are prioritizing value.
A key advantage of home repairs during COVID-19 is that homeowners can enjoy the benefits of their updated living spaces all year long. The use and practicality of these expenditures make them a smart investment.
Plus, home repairs have long-term value. A primary residence accounts for 62 percent of the median homeowner’s total assets. Without maintenance, the value of the home can dwindle over time.
For example, neglected foundation repairs could mean losing up to 30 percent of a home’s value. For a $350,000 home, that means a homeowner could lose $105,000 due to neglected foundation maintenance. If a home has cracked walls, sloped floors, stuck doors, or water damage, it also may have issues below ground that need to be addressed.
In another case, moisture problems, plumbing leaks, and drainage issues can damage the structural integrity of a home. The dampness can also create the perfect environment for mold to grow, causing a range of health issues.
Other types of home repairs can help increase the value of a home and beat real estate market trends. For example, waterproofing the basement and turning it into a finished living space adds square footage to the home and can increase its market value.
A free inspection from the country’s leading foundation repair experts can help homeowners learn what steps they can take to secure their foundation and protect their homes.