Despite the challenges brought on by COVID-19, there are promising signs in consumer spending – including hard-hit sectors like travel, according to Mastercard Recovery Insights. Recovery Insights: Travel Check-In, the second report in Mastercard’s series focused on the impacts of the pandemic, including emerging trends in travel spending.

In particular, the analysis of anonymised and aggregated sales activity across the Mastercard network, including in-person and online transactions, shows that Italy, Russia and France are leading in terms of the recovery of travel and entertainment spending across the G20. This includes travel sectors such as airlines and lodging as well as activities such as eating out. Despite being a focus of the pandemic earlier this year, Italy’s significant restaurant culture and extensive domestic tourism industry have helped it to bounce back faster than other markets, including the US, Brazil and India.

As the broader global economy begins to show signs of improvement, a number of trends have emerged that mirror overall consumer spending—in particular the shift to a smaller retail radius as consumers travel and spend closer to home.

“There’s no doubt that people love to travel. What we’re seeing, though, is that how they’re traveling has adapted during this time. Gas spending, restaurant spending, bike rental spending – all are improving, showing that the rebound is happening but is focused on local travel and local spending. In other words for those of us in the U.S., the great American road trip has returned in a new way,” said Steve Sadove, Mastercard senior advisor and former CEO of Saks.

Overall key trends spotlighted in the report according to the analysis of anonymised and aggregated sales activity across its network, include:

Localism Takes Off: In Q2 2020, auto rental’s share of total transportation spending nearly doubled from 9% in 2019 to 17% as consumers prioritized local means of transport. In Switzerland and Germany, for instance, non-air travel made up roughly three-quarters of travel spending the week ending 7 August. This tendency to travel closer to home has also driven the trajectory of rentals of micro-mobility solutions (e.g., scooters, bicycles) in countries like the US, where they surpassed 2019 levels at the end of July. The rebound of gas spending this summer also speaks to consumers getting out and spending but maintaining a tighter footprint.

Boutique is Chic: The analysis shows that travellers are increasingly opting to stay small. Recently, the global recovery rate of small independent hotels has outpaced the recovery of large hotels by over 50%.

Consumer Travel Leads the Recovery: An analysis of consumer cards compared to business cards shows that spending on consumer air travel and auto rentals is returning ahead of commercial travel.