Holiday Travel Intent Grows Despite Budget Cuts in 2025

Holiday Travel Intent Grows Amid Financial Concerns

As the 2025 holiday season approaches, a recent survey conducted by Deloitte reveals a significant rise in the number of Americans planning to travel. However, corresponding budgets are not keeping up, suggesting a cautious approach among travelers this year.

Rising Interest in Travel

According to the 2025 Holiday Travel Survey, 54% of respondents expressed their intent to travel during the holiday season, which spans from Thanksgiving to mid-January. This figure marks an increase of 5 percentage points compared to the previous year. Notably, for the first time, Generation Z and millennials together are expected to make up about half of the holiday traveling populace.

Despite the surge in travel intent, financial apprehensions loom large. On average, respondents plan to allocate $2,334 for their holiday trips, reflecting an 18% decrease from 2024. Concerningly, nearly 31% of participants reported feeling financially worse off compared to the prior year, which is a 5 percentage-point increase from 2024.

Changing Habits

In the current economic environment, travelers are adjusting their habits. For instance, those who plan to go on holiday trips expect to take about 1.83 trips this season, down from 2.14 in the previous year. High-income travelers (earning more than $100,000 annually) are particularly inclined to cut back, with their average number of trips dropping to 1.9.

Interestingly, travel preferences are shifting. Many respondents reported intending to stay with friends or family rather than booking paid accommodations, indicating a trend towards more economical travel options. This is reflected in the significant number of high-income earners—16%—expecting to decrease their spending on lodging, along with 37% planning to cut in-destination expenses.

The Role of Technology

As part of this year's survey, it was highlighted that 24% of participants intend to use Generative AI for travel planning, a significant increase from just 8% two years ago. This technology is being leveraged for activity suggestions, destination insights, and accommodation options that cater to their unique preferences and financial limitations.

Among Gen AI users, the most popular applications include researching activities (67%), destinations (56%), and accommodations (54%). These stats underline a growing reliance on technological tools to enhance the travel experience, especially among younger travelers such as millennials and Gen Z, who are leading this trend.

The Future Outlook

Looking ahead, travel providers should be prepared for a potentially softer holiday season as consumers exhibit more cautious spending behaviors. With a notable decline in the percentage of travelers planning to fly—47%, down from 55% last year—road trips are likely to see a resurgence as a cost-effective alternative. More than half of respondents (57%) intend to drive to their destinations, showcasing a decisive shift in travel habits driven by budgeting concerns.

Notably, loyalty remains a key element in travel decision-making. A significant portion of air travelers (37%) stated they would prioritize purchasing the lowest-price ticket from their preferred airline, indicating that while consumers may be reducing travel spending, they remain loyal to brands that they trust.

In light of these findings, travel businesses may need to recalibrate their strategies to better cater to budget-conscious consumers while simultaneously exploring ways to enhance customer loyalty and satisfaction. As quoted by Kate Ferrara, Deloitte’s vice chair for the transportation, hospitality, and services sector: "Many Americans are planning fewer flights and hotel stays, with tighter wallets in tow..."

Conclusion

In summary, while the intent to travel during the 2025 holiday season is on the rise, financial constraints have led consumers to adopt a more frugal approach. As holiday travel planning increasingly involves tools like Generative AI and participants seek affordable travel experiences, the industry will need to adapt to ensure they meet consumer expectations head-on. Addressing these shifts in behavior will be vital for travel providers as they navigate the challenges of the upcoming season.