Mrs. Straub
AP Economics
April 10, 2018
The Impact of Spring Break on the Economy
Each spring, families and college students look forward to taking a break from work and school to relax and do something fun outside of their normal routine. During the annual Spring Break vacation time, many businessesーincluding airlines, hotels, gas stations, restaurants, and retail storesーexperience a substantial increase in demand for their products and services.
The pie chart below shows the breakdown of a trip for 2 people to Costa Rica, a popular Spring Break destination. A little more than half of the total cost is for travel and lodging, with food and drink being a close second.
According to Free Enterprise, a website presented by the U.S. Chamber of Commerce featuring stories about American businesses, “depending on the location...business growth between 2001 and 2005 posted positive gains in every year, increasing from 634 to 779 total businesses.” Successful businesses lead to a better economy, which then increases gross domestic product. The money families and college students spend on travel, lodging, food and entertainment during Spring Break proves how our economy is doing by money transferring from individuals’ bank accounts into liquid cash which shows the flow of money that helps boost the economy. A better money flow creates an environment that will eventually increase production, sales, wages and employment.
College students preparing for Spring Break tend to not think so much about their opportunity costs as they are packing for warm beaches. Students do not want to “waste” time worrying about their units of account or the future value of their money, and would rather purchase whatever attracts their attention while on Spring Break, even if it means they spend more money than they should. Typical impulse buys often include apparel and souvenirs, food and drinks, and fun activities and excursions.
I believe that families, and especially college students, should look at their commercial bank accounts, create a budget for vacation and work to control their spending impulses during Spring Break. Ali Garland, an experienced world traveler who gives advice on her blog Travel Made Simple, says it is important to track your spending throughout your vacation and create budgets for every category that revolves around a vacation (Garland).
Spring Break vacationers create an amazing revenue boost to many local economies each March and April. By planning ahead, it is possible to have a fun and exciting vacation without returning home feeling like you overspent. The key is to be realistic about your spending, make sure that you have enough money to last your entire trip and if you have money left over to invest for next year’s vacation, then that’s a bonus.
Works Cited
Free Enterprise Staff. “Why Florida and Texas Don’t Have Any Spring Break Regrets.” Free Enterprise, 14, March 2016, Washington, DC. https://www.freeenterprise.com/spring-break/ .Garland, Ali. “How To Make A Travel Budget.” Travel Made Simple ,16, January 2013, https://travel-made-simple.com/how-to-make-a-travel-budget/
Joanna, Tim. “Budget For Travel.” Gen X Gypsies, 10, April 2018, http://www.abroaddreams.com/2013/02/24/budget-for-travel-to-costa-rica/
I definitely agree with the fact that families and college students should plan ahead for spring break well in advance, budget wise. Vacations are expensive and extremely overpriced during the spring break months. Some people may not take into account that massive increase in airfare, food, and overnight hotel rates and may plan for a “regular” vacation. This can cause families to skyrocket a mile high over their initial budget or what they wanted to spend. Economically, this liquid cash flow may help boost the economy, but I do not know if this has a large impact on the economy itself. There is definitely a higher demand for fiat money within the money market because people may want to use cash instead of their cards for some purchases during vacation.
ReplyDeleteI agree with you that Spring Break is a super popular time fo the year for students, adults and families overall. Families prepared for Spring Break but not enough. The cost of airfare or other transportation, hotel, resort, condo or any place they are staying, food, going out to eat, excursions and more are super expensive. However, for locations that are warm and popular locations for Spring Break such as Florida, Mexico and many more are bringing in lots of revenue and profit from the spring breakers. However, families and students should plan ahead and some do but some don't enough. They need to create a budget plan so they aren't blowing all their earnings on a week in a tropical location. Economically this will benefit the vacationer very positively.
ReplyDeleteI agree that Spring Break is a very popular time for people to travel. Most people I know travel each year for Spring Break. The cost of airfare, hotels, food, gas, etc. all adds up over time. People need to make sure they save up enough to travel on these fun but expensive vacations.
ReplyDeleteI think it would be very interesting to take a deep dive into one of the vacation economies, like Punta Cana in the Dominican Republic. These economies are nearly entirely based around tourism, which comes mostly during winter, spring, and summer breaks. I think looking into how these places choose to invest, deciding whether to have large resorts that may seem barren 8 months a year or smaller resorts that cannot hold all the travelers during peak season, would be an interesting investigation.
ReplyDeleteAll points brought up in this argument are valid points that deserve significant consideration. However, the opportunity cost of taking so much time to realize how much you shouldn't spend and then feeling so much remorse after spending so much is considerable; more time, more fun, less remorse. To some people, this is worth being a little overindulgent on their vacation, and after all, isn't overindulgence the whole point of having a vacation?
ReplyDeleteI think it is very important to note the huge impact spring break has on the amount consumers spend. It is important to plan and prepare for such expenditures, as many don't but welcome and await the time off. Additionally Spring Break is such a positively lucrative time for businesses as well, that isn't always focused when consumers await their freedom from school and work.
ReplyDeleteI think this was a super good topic considering we all just got back from Spring Break! My family and I usually go on a vacation during this time every year so it is interesting to see how our trip actually affects the economy. We used to go during November and missed school, and I can definitely say I noticed a huge difference in the amount of people in the airport and in Florida in general. For those renting their homes and condos I think the increase in demand is great. As for other times of the year, I wonder how much they struggle to find renters.
ReplyDeleteI definitely agree that families and college students need to assess the financial decisions of spring break more carefully. This requires sufficient planning ahead of time, particularly when finding flights and hotels, resorts, or condos. It’s important to consider booking a room at a hotel that allows cancellations, as hotel room prices fluctuate often, and if you notice that the price of your room went down, you can cancel and reschedule the room at the lower rate. It would be interesting to compare the prices of different lodging options in a popular vacation destination, and see how those prices differ at various times of the year and how much revenue these hotels make.
ReplyDeleteI like this topic because it's relevant and very true. Spring break destinations GDP are heavily dependent on tourists coming in the months of March and April because they can target college students as well as families who takes their kids on vacation. It's also interesting how the amount a plane ticket, hotel room, and other things fluctuate so much in price as the spring break season approaches. Another thing to think about is how much more money even places that aren't spring break destinations will be making in these months just because the people who have a break, but don't go anywhere, will be more likely to pay money for restaurants and activities in their own city.
ReplyDeleteI definitely agree with the fact that families and college students should plan ahead for spring break well in advance, when considering their spending cost. Vacations are expensive and extremely overpriced during the spring break months. Some people may not take into account that massive increase in airfare, food, and overnight hotel rates and may plan for the usual vacation. This can cause families to skyrocket a mile high over their initial budget or what they wanted to spend. They need to create a budget plan so they aren't blowing all their earnings on a week in a tropical location. Economically this will benefit the vacationer very positively.
ReplyDeleteI agree that families and students should have a plan set up on how much the max they are willing to spend is and make a goal not to spend more than that becasue then they save money and they don't feel like they over spent on anything and if they stay within their budget they will feel better when they get back for spring break.
ReplyDeleteI agree that people spend more money than thay can spend on during spring break
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ReplyDeleteThe two main themes of the articles are that Spring Break weeks boost GDP each March and April, and that individuals should create a budgeted plan of how much they should spend on vacation. One of the main issues that I can think of is great shortages during Spring Break. Often times people cannot book their flights if the plane is already full, or popular restaurants ran out of a certain menu item. It is quite possible that with demand so high, that quantity supplied isn’t able to support it.
ReplyDeleteI definitely agree the students and families should plan ahead, and have a budget in mind for their spring break. Without it, many people will be spending more than they most like would or should. That being said, if they are traveling in a spot within the U.S., that splurging of goods and services ends up helping our economy, so perhaps its good that people are spending just a little extra on their vacations.
ReplyDeleteSpring break is a very interesting topic to talk about and it makes sense that Spring Break tends to be a financial nightmare for some families. Personally, my family always tends to spend more money on Spring Break than usual obviously and I always thought it was interesting how families can just simply spend tons of money without a plan. As the economic side of things go, spring break must be a huge economic boost to the tourist towns especailly down South, as the restaurants and hotels are now all going to see an increase in the day to day customers they are receiving. Cities that are located in these geographical locations heavily rely on these times of the year to boost their sales in many categories.
ReplyDeleteI agree that when looking for the ideal place to travel you should have a budget otherwise things might not turn out how you wanted and your great vacations end up in overspending and debt. Also I agree that during spring brake the economy has a boost because of what people buy and the services needed for their vacations for example their plain tickets if going to a beach so leaving the country,swimsuits if going to the beach or just gas if going on a road trip. all of these things help our economy.
ReplyDeleteI am more concerned about the effect of spring break on Instagram. Every day during spring break, you'll see people flexing about where they went, with over edited photos with clever captions that are just trying way too hard. I don't know about you but the marginal social cost of these Instagram posts heavily outweighs the marginal social benefit of spring break.
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