Katz: Consumers are spending more on experiences than things

Core Insights - Record 122 million people are traveling, marking a 2% increase from last year, indicating a willingness among consumers to spend on travel [1] - There is a secular trend of consumers prioritizing experiences over material goods, expected to continue through 2026, benefiting companies like Hilton, Marriott, and cruise lines [2] Travel Trends - Year-over-year travel metrics show flights and driving up by about 2%, while other forms of travel, including buses, trains, and cruise lines, have increased by over 9% [3] - Cruise lines are perceived as offering better value, being approximately 25% less expensive than average land-based vacations, leading to a rise in bookings from new customers [4] Consumer Behavior - Consumers are discovering cruise lines, with a significant portion of bookings coming from first-time cruisers [5] - There is a trend of consumers "trading down" to cruise vacations due to rising costs of flights and hotels, suggesting a shift in travel preferences [6][7] Market Outlook - The penetration of cruise travel remains in single digits, indicating potential for growth in the market [8] - The K-shaped recovery is favoring luxury travel, with companies like Viking being upgraded, while middle-income consumers are still awaiting stimulus benefits [8][9]