What's Happening?
Despite a 5% decline in overall holiday spending, PwC's 2025 Holiday Outlook reveals that travel demand remains resilient, with a modest 1% year-over-year increase. The report indicates that 44% of consumers plan to travel during the holidays, a slight decrease from last year's 46%. Millennials and Gen Z show the highest travel intent at 55%, while Boomers and Gen X are less inclined to travel. The report also highlights a generational shift in spending habits, with Gen Z reducing holiday expenditures by 23% and Boomers increasing theirs by 5%. The use of AI in travel planning is becoming more prevalent, particularly among Millennials, who are likely to use AI agents for travel recommendations.
Why It's Important?
The resilience in travel demand amidst declining holiday spending underscores the importance of experiences over material goods for consumers. This trend presents opportunities for travel sellers to target older generations with more disposable income and to adapt offerings for younger travelers seeking value. The increasing reliance on AI for travel planning suggests a shift in how consumers make travel decisions, emphasizing the need for brands to provide AI-compatible content. The focus on visiting friends and relatives highlights the social significance of travel, which remains a priority despite economic constraints.
What's Next?
Travel and hospitality businesses are advised to adapt to the changing consumer landscape by offering value-driven packages and ensuring their content is accessible to AI platforms. With a late Thanksgiving compressing the booking window, companies should prepare for last-minute bookings and streamline their cancellation policies. The emphasis on AI-ready content and value clarity will be crucial for capturing the attention of tech-savvy Millennials and price-sensitive Gen Z travelers.
