Aussies hit the shops in 2021 & travel spending is up too, says Citi

Aussies hit the shops in 2021 & travel spending is up too, says Citi

It appears that more and more Aussies are starting to return to travel, as revealed by Citi Australia’s March Credit Card index.

Citi reports that month on month, there’s been a 69% increase in airline spend. However, this is still 44% less year on year.

“Spend is now slightly higher year on year compared to 2020. This strong rebound post-COVID is a pleasant surprise that speaks to the return of consumer confidence in the Australian economy,” said Choong Yu Lum, head of credit cards at Citi Australia.

“The Easter holidays have also spurred increased spending, as consumers lock in travel plans and prepare for holidays.”

In fact, when comparing March to February, Citi also reported a 23% consumer spending increase. Not to mention, year on year spend has seen a 2% increase as the economy continues to recover following the COVID-19 pandemic.

Citi’s index found that the top ten spending categories in March 2021 were:

Spending category:% share of spend:
1. Supermarkets9.34%
2. Household goods retailing7.40%
3. Insurance7.02%
4. Business services6.48%
5. Health/Medical5.64%
6. Legal/Tax Services5.61%
7. Restaurants5.03%
8. Sports & Hobby Stores4.27%
9. Retail goods4.10%
10. Hotels, Resorts & Spas3.53%

“Notably this month, spend at restaurants increased by 34%, perhaps reflecting Australians getting out to mark either end of term or Easter holiday celebrations,” said Lum.

“While airline spend is still lower than usual, ranking 16th as a spend category, spend increased 69% compared to February indicating travel is gaining in popularity.”

The industries doing it the toughest:

March 2020 marked the start of a significant drop in consumer spending due to border closures and the implementation of lockdown restrictions following the pandemic. And while we’ve thankfully seen many industries start to pick back up again, many are still yet to recover.

According to Citi, here’s how much of a drop in sales the industries who’ve done it the toughest have had since March 2020:

Spending category:% drop from March 2020:
1. Travel/Cruise lines45.29%
2. Airlines44.28%
3. Liquor stores35.27%
4. Public Transport32.26%

“As anticipated, the travel categories are the most impacted with cruise lines and airlines experiencing the biggest drop in spend compared to this time last year,” said Lum.

“Despite this, government support measures, including its recently announced $1.2 billion tourism support package, are starting to show dividends with spend on these categories increasing.”

With many Aussies continuing to work from home since the brunt of the pandemic, public transport is still relatively slow.

“Liquor stores are the outlier here, though perhaps this drop can be attributed to ‘panic buying’ of liquor in March 2020 causing a temporary spike in figures, with more normal spend returning today,” explained Lum.

Expectations for the future:

With many Australians taking the opportunity to venture out during the April school holidays, we’ll hopefully start to see more of a boost in spending within local economies thanks to domestic travel. 

“Additionally, with a travel bubble to New Zealand opening up mid-April, we may also see overseas spend start to increase for the first time since the border lockdown,” said Lum.

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