Description: Jennifer Anchan drives a 2001 Honda Accord that she bought for $1,700 cash; she also purchases used items off Kiiji, and shops more often at dollar stores these days. But she is willing to spend big for travel and concert tickets, savouring experiences with friends over acquiring new things. Recent data from the Royal Bank of Canada (RBC) shows Canadians are cutting back spending on restaurants and clothing, and focusing discretionary dollars on flights and hotel rooms instead. Queen’s University marketing professor Tandy Thomas is calling this phenomenon “revenge spending,” a not-so-surprising outlet for having missed vacations and concerts during the earlier stages of the pandemic.

Date:  April 15, 2023

Source:  cbc.ca

 Link: https://www.cbc.ca/radio/costofliving/scrimp-and-save-rbc-spending-tracker-1.6810036

Discussion points:

1) How many of your fellow students are planning a travel vacation after school finishes this term?

2) Have you adopted the strategy to scrimp and save, then spend that “little pot of gold?”

3) On page 6-18 of Wiley’s Managerial Accounting: Tools for Business Decision-Making we see that Air Canada has a higher contribution margin on its first-class tickets than it earns on economy-class sales. Given the revenge spending trend, what might Air Canada do to increase its sales of first-class tickets?