The psychology of paying for group travel – results from our in-depth consumer research

Silver Travelers—those aged 56 and older—are also contributing significantly, leveraging their ample time and resources. Notably, a common trend across these demographic groups is a preference for group travel, with 61% of Americans showing interest in traveling with extended family or a small group of friends in the coming year.

At Leeway, we aim to simplify how people manage expenses during their travels. To do this more effectively, we needed to get an in-depth understanding of how travelers split costs. That’s why we commissioned a survey to divulge the intricacies of managing shared expenses, which we know can often complicate what should be an enjoyable travel experience. From settling hotel bills to dividing the cost of a group tour, the challenge of keeping financial dealings transparent and fair is a common stressor that can turn a fun vacation disappointing.

The insights gathered in this survey will help us refine our solution and inform and educate our community about best practices in financial management while traveling. By understanding the preferences, behaviors, and challenges our users face, we can innovate and tailor our solutions to better fit the dynamics of modern travel and empower travelers with a way to pay that promotes transparency, ease, and fairness.

How the survey was constructed

Our research methodology was designed to provide a comprehensive understanding of how different demographics manage and split travel costs. This was achieved through a blend of qualitative research, quantitative data analysis, and extensive desk research.

• Qualitative research: To dive deep into individual behaviors and motivations, we conducted in-depth, structured interviews with six participants who were carefully screened to ensure relevance and diversity in their travel habits and experiences. The interviews allowed us to explore the nuances of cost-sharing among travelers, gaining insights into personal preferences, common practices, and the psychological factors at play when individuals engage in financial transactions with fellow travelers.
• Quantitative research: To validate and expand on our qualitative findings, we surveyed 100 participants using Pollfish, a real-time market research tool. This helped us to identify patterns and statistical significance across a wider population.
• Desk research: Complementing our primary research efforts, we engaged in thorough desk research to contextualize our findings within the existing body of knowledge. We examined a variety of sources, including industry reports, academic papers, and market analyses, to understand current trends and historical data.

Key findings from the Leeway survey

Finding 1: More than half of respondents say they split the cost of group travel equally

83% of our survey participants indicate that they travel a few times a year, either with friends (29%), extended family (25%) or significant others (46%). Of those 57% split the cost equally and pay upfront for pre-trip purchases like flights and accommodation. We also learned that half (52%) of travelers of all ages and genders prefer immediate split payment options at checkout over a tool to better communicate the amount owed and facilitate reimbursement.

Finding 2: Organizers carry the upfront costs of group travel to mitigate friction

80% of people who pay for everything do it either because “I am organizing the trip and I prefer to pay upfront to secure the best options without waiting for others to book” or to simplify trip planning logistics. The main source of friction is differences in spending habits, difficulty collecting repayments and having to carry the initial costs for others' travel expenses.

Finding 3: Despite age differences, the majority of respondents favor splitting costs across multiple cards

When asked how they prefer to pay for a booking, we found that most people over 35 want " a tool to communicate the amount of money each traveler owes to each other, e.g.: an email with the amount owed and a link to make a payment,” while most people under 35 prefer " a way to immediately split payments upfront without needing to settle anything with each other.” We also learned that people prefer splitting the the total cost across multiple credit or debit cards (72% for 25-35 year olds, 67% of all women).

Insights into travellers’ payment splitting

1. Money spent upfront for group expenses is money for the trip:  Frequently there is a need to be paid back for shared pre-trip expenses prior to a trip because a traveller has allocated that money for during the vacation (expenses, food, shopping). People have an amount in their bank account they feel comfortable with and trip expenses affect that.
2. Couples (not married) traveling together have more complexity than friends: Couples who do not have a shared bank account often try to balance the trip expenses but that results in an awkward messy conversation. They rarely use formal tools to split expenses and have to reconcile at the end of the trip using bank statements and booking confirmations. WeTravel Academy states that frictionless payments have become a key area of focus for travellers, aiming to streamline the payment process and enhance customer satisfaction.
3. Paying upfront for others puts you at a disadvantage for fluctuating exchange rates: The person who secures the booking often has to take the “hit” when the exchange rate changes because they have already been paid by their travellers for the rate at the time of booking.
4. People love things that make awkward conversations go away: People love tools and features that remove the need for them to nag their friends/partners who are bad at admin/remembering to pay them back. NerdWallet​ (NerdWallet)​ and View the VIBE​ (View the VIBE) both suggest that clear communication about money from the get-go can prevent any awkwardness later on, and ensuring everyone agrees on the approach to splitting costs makes for a much more enjoyable holiday experience. However, we know that psychologically, that doesn’t always happen.
5. Small amounts add up: With bigger groups small amounts add up, so chasing 8 friends for 10 euros feels silly but 80 euros is a lot of money. This really sets the scene for how a payment splitting solution used upfront could help counter this.

Travel agent looking to help your clients make payments frictionless?

Making client payments seamless is undoubtedly your priority and there are many ways you can facilitate seamless payments for your clients like:

1. Providing a variety of payment methods to choose from, including credit/debit cards, bank transfers, digital wallets (such as PayPal or Apple Pay), and alternative payment methods (like Buy Now, Pay Later services).
2. Offering user-friendly online booking platform that allows clients to browse and book travel packages or services directly from your website.
3. Clearly outlining all costs and fees associated with the travel services you offer upfront.
4. Allowing clients to spread out the cost of their travel expenses by offering payment plans or installment options.
5. Embracing mobile payment solutions that allow clients to make payments conveniently from their smartphones or tablets.

Leeway empowers you to make client payments easier

It is evident from our survey that there’s a growing trend towards embracing split payments for travel, driven by the desire for fairness, convenience, and financial transparency among travelers. Leeway is meeting that traveler need by letting both vacationers and travel agents effortlessly create groups for split payment and share them with others to save valuable time and reduce your administrative burdens

By offering multiple payment options in a group, including credit/debit cards, travelers and travel agents get more flexibility as well as real-time visibility into payment statuses. And our research shows that travelers are more than ready fro this solution, with many stating that they will “prioritize tools that streamline payment processes and reduce the need for manual intervention.”