Motels

As Covid Restrictions Relax, Consumers Use Debit Cards for Hotels, Motels, and Car Rentals – Digital Transactions

Further evidence is emerging from the evolution of consumer spending over the past year. Consumers are using their debit cards more for transactions at hotels and motels in the travel industry, according to the PSCU Payments Index for April.

Released Thursday, the index shows that debit card use accounted for 35% of transactions in hotels and motels, up from 29% in March 2019 and 27% in March 2020. Credit use in hotels and motels has also increased, reaching 39% in March. This is up from 33% in 2019 and 34% in 2020. PSCU, a credit union services organization based in St. Petersburg, Fla., Publishes the monthly index based on data from the financial institutions it works with.

The travel sector has been particularly affected by the Covid-19 pandemic and travel restrictions. Spending at debit hotels and motels saw a marked improvement in March following the latest stimulus payments, likely scheduled around spring break, the PSCU said in its report. “Prior to that, in the second half of 2020, purchases were mostly below the 2019 baseline, with the exception of Labor Day week,” the report said.

Other travel segments show some life, albeit at a different pace. Globally airline purchases are slowly rising from the low point of April 2020. For the month of March, debit transactions are down 6% compared to March 2019 and credit transactions are down 33%. “Each showed monthly improvement, with March 2021 marking the most notable jump since the start of the pandemic,” the PSCU said.

Car rental is doing the best in travel, particularly in debit transactions, which increased 38% in March compared to the same month in 2019. Credit transactions have yet to return to positive territory , according to the report, and are down 8% in March 2021. as of March 2019. The only bright spot is that looking at March 2021 and March 2020, credit transactions are up 56%.

“Historically, the travel industry’s breakthrough has been fairly consistent by card type. As fewer people traveled during the pandemic, there was more spending on hotels and rental cars and less spending on airlines and transportation, ”the report says.

Although business travel remains deflated, some consumers are visiting amusement parks. PSCU data shows that credit transactions on these destinations are up 159% from March 2019 to March 2021. Debit transactions are up 20% for the same period.

The March PSCU report marks the first monthly release of what had been a weekly report started last year to assess the impact of pandemic-related restrictions on electronic payment activities.


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