Parents across the country recently received the first installment of their Child Tax Credit checks. While most of those surveyed indicated they will use the money for savings, investing, bills/debts, school supplies, and groceries, the travel, leisure & experience economy can expect a boost from this direct injection of cash into household budgets. Why? Because money is fungible.
Every college student knows that a request for money from home for books, food, or rent probably came from a previous or intended expenditure on a leisure activity. Christmas bonuses, tax refunds, and raises inevitably mean a night out at the movies, dinner reservations, or a trip to the local theme park. We all need to blow off a little steam and relax from time to time, and a little extra cashflow means it is easier to justify spending on a bit of fun.
Just take a look at the stimulus checks from various points in the Pandemic. According to MarketWatch, the first check went almost exclusively to cover rent and basic needs because so many had their income disrupted and we were all restricted to our homes. Those who did make purchases spent on good like furniture and clothes. The second stimulus check in January saw people spending a bit more on recreational goods and takeout food, but the relatively small amount of $600 coupled with the lingering COVID restriction did not result in a significant impact on the experience economy. The third stimulus check, however, hit as the weather was warming, the vaccine was being rolled out, and restrictions were being loosened. Add to this mix a year of cabin fever and the stage was set for people to get out of the house and hit the bars, museums, sporting events, theme parks, rivers, and other activities they had been missing for so long.
With this in mind, expect parents to use these checks on their children and for the family, but that may also mean addressing their psychological needs and getting them out of the house to experience all those things they had been denied for over a year. It is still a good use of these funds to bring children to a museum or aquarium to further their educational experiences. Even if the money is spent on a trip to a Go-Kart track or amusement park, it is still being used for the general benefit of the children, which is the whole point of getting this money into the pockets of parents on a monthly basis instead of in one lump sum as part of a tax refund.
The bottom line is this: more money in the pockets of Americans, no matter how that money is designated to be spent, always results in more bodies through turnstiles. For a travel & leisure industry devastated by the Pandemic, this is welcome news.
