Vacation Savers are households that save or invest with the goal to travel or take a vacation. Overall, vacation and travel is the third-most-likely savings and investment goal (41 million households), following retirement (77 million households) and a rainy day (61 million households). Saving for travel represents a more immediate and tangible goal than either saving for retirement or saving for emergencies. For financial-services providers, Vacation Savers are a fairly sophisticated, desirable, and profitable target.

Demographics

• Vacation Savers' average age is 47 years. The majority are Gen X/Y.
• Vacation Savers' average income ($82K) is higher than that for all US Households ($67K).
• Two in five Vacation Savers household heads have a four-year college degree or more.
• Two-thirds of Vacation Savers households have two household heads.
• Vacation Savers are much less likely than all US households to have dependent children.

Products and Services

• Assets: Vacation Savers are likely to own savings accounts, US Savings Bonds, stocks, mutual funds, IRAs, 401(k)'s, and a car or truck.
• Accounts: Vacation Savers are likely to have an investment account (especially packaged accounts) and a brokerage account.
• Debts: Vacation Savers are likely to have a first mortgage, vehicle loan, or consumer loan and are likely to carry credit-card balances.
• Insurance: Vacation Savers are likely to have vehicle insurance, group life insurance, group health insurance, and any other health-related insurance such as dental, eye, and disability.
• Advisors and Advice: Although they show no favoritism toward a particular financial professional, slightly more than two in five Vacation Savers have received advice recently; almost one-half are likely to seek advice.

Financial Attitudes That Differentiate Vacation Savers

At a minimum, one-half of Vacation Savers agree that:

• It is important that a financial-services representative make recommendations I should consider.
• I enjoy learning about different investment opportunities.
• I am interested in purchasing socially responsible investments.
• I feel comfortable doing financial business over the internet.

Vacation Savers are less likely than other households to agree that:

• The stock market is too risky for me.
• I do not need advice about investment options.
• I prefer to do most of my financial business in person.
• I'm less worried about getting ahead financially than I am about just keeping up.

Interesting Tidbits

• In addition to wanting personal interaction with financial professionals, Vacation Savers also look to their friends, relatives, and associates. In addition, they use newspapers, magazines, books, newsletters, financial-institution websites, and other internet sources for information.
• On average, Vacation Savers do not have more savings than do other households. However, on average, they do have higher liquid assets, investable assets, financial assets, and total assets. In spite of having higher liabilities, Vacation Savers also have a higher net worth than other households have.
• One-quarter of Vacation Savers currently collaborate with financial professionals; two in five households also would prefer more collaboration than they have at present.
• Vacation Savers households would like to learn more about choosing (33%) or researching (23%) investments, minimizing taxes (28%), making retirement preparations (32%), budgeting (27%), and managing their debt better (18%).

Implications

Four in five Vacation Savers households have a somewhat to extremely high level of confidence in their general or specific financial strategy. These affluent and knowledgeable households are precisely the type that financial professionals and institutions find desirable.

In the postrecession wake, the declining number of these households may reflect the growing priority of other goals for saving and investing. Lower overall savings rates and greater uncertainty about the future are also contributing factors. However, at 41 million households, Vacation Savers represent a significantly large market segment.

The larger opportunity for financial institutions may derive from the impact of other trends, such as the general decline in consumer interest and involvement in financial services, the declining trust in financial-services providers, and the growing consolidation of products, services, and relationships. Targeting Vacation Savers could potentially benefit providers able to meet this desirable population's short-term-travel goal effectively. Goal attainment can establish the basis for an institution not only to build trust but to also leverage its other products and services offers.

Additional information about Vacation Savers' demographics, financial balance sheets, other saving and investing goals, financial topics of interest, and the products and services that they are likely to obtain in the next 12 months are easy to find in the MacroMonitor.

For more information, contact CFD.