- Spending on both dining and travel is nearing pre-COVID-19 levels, Steve Squeri, American Express’ CEO, told CNBC’s Jim Cramer on “Mad Money.”
- Regarding travel, Squeri predicts the US will see a “full consumer recovery” by the end of the year.
- Millennials are driving the boost in restaurant spending.
- See more stories on Insider’s business page.
Americans are dining out and traveling again.
Spending for both are nearing pre-COVID-19 pandemic levels, Steve Squeri, American Express CEO, told CNBC’s Jim Cramer on “Mad Money” on Monday.
Both travel-adjacent companies and restaurants were initially decimated when the COVID-19 pandemic first rippled across the US. But now, mass vaccination efforts, financial aid from the federal government, and improved personal finances – such as an increase in savings and low delinquencies – are pushing the return of both industries, Squeri told CNBC.
“They have the money in the bank, they’re ready to spend it, but what was holding them back was not having a comfort about being able to go out,” Jay Bryson, Wells Fargo’s chief economist, told the New York Times’ Ben Casselman in early April. “We’re getting into a critical mass of people that are feeling comfortable beginning to go out again.”
And it seems like now, the US is hitting this critical mass.
“When we look at our travel numbers, travel bookings in May were 95% of where they were in May of 2019,” said Squeri. This was without international travel.
Almost 2.1 million people traveled on June 13, according to data from the Transportation Security Administration. To compare, about 2.64 million people traveled the same day in 2019.
This uptick in travel, which could be foreshadowing an impending summer boom, is already being reflected in niche segments of the industry. For example, a rental car shortage is currently plaguing hot destinations like Hawaii, Florida, Phoenix, and Puerto Rico.
And Thor Industries – a major RV maker that oversees brands like Jayco and Airstream – is “pretty much sold out for the next year,” Thor’s president and CEO Bob Martin told CNBC’s Jim Cramer on “Mad Money.”
Squeri believes that by the end of this year, the US will have a “full consumer recovery” in terms of travel. “I think globally, we will probably be about 80% of where we were in 2019,” he said.
Similarly, restaurants are also “doing great,” according to Squeri, and expenses are at roughly 85% of 2019 numbers. He also notes that younger patrons are driving this boost in restaurant spending.
“The people that are really spending at restaurants [are] millennials [at] 130% in April of what they spent back in 2019,” Squeri said. “We believe that that’s going to continue to move forward.”