The Great Festive Evolution
For generations, festive spending in India was synonymous with acquiring new possessions. It meant new apparel, gleaming jewellery, the latest electronics, and home upgrades. While these categories remain important, a notable shift is underway. An increasing
number of Indians, particularly younger consumers, are redirecting a portion of their festive budgets away from purely material goods and towards creating memories. According to multiple consumer reports, expenditure on experiences such as travel, hospitality, and leisure is expected to grow significantly. A recent survey indicates that while spending on apparel and electronics remains a major focus for festive shoppers, travel and dining now account for a notable 24% of the intended festive basket for urban consumers. This isn't necessarily about spending less overall, but spending differently, with a new emphasis on what an experience can offer over what a product can do.
What's Driving the Change?
Several factors are fuelling this pivot towards the 'experience economy'. Rising disposable incomes play a role, allowing households to look beyond immediate material needs. But the shift is also deeply cultural. After years of prioritising ownership as a marker of success, many consumers now see unique experiences as the new social currency. This is amplified by social media, where a weekend getaway to a Himalayan hamlet or a culinary tour provides more compelling content than a new smartphone. There is also a growing desire to spend quality time with family, and a short vacation is often seen as a more meaningful way to connect than a traditional gift exchange. Reports suggest Indian travellers are redefining holidays as curated, meaningful escapes, with short-haul trips gaining popularity due to convenience.
Millennials and Gen Z Lead the Way
This trend is most pronounced among Millennials and Gen Z. While Millennials have emerged as the biggest spenders this festive season, with 85% increasing their budgets, they are also keenly interested in experience-led activities. Gen Z, while more budget-conscious, is also transforming holiday spending by prioritising experiences. For them, a product is often valued for the experience it enables—be it apparel for a destination wedding or gear for a trek. One recent travel report highlights this behaviour, noting that the festive season is becoming a 'season of trips'. It found that nearly a quarter of young travellers took multiple short getaways during last year's festive quarter, a trend expected to accelerate. More than half of these festive bookings were for solo travellers.
The Ripple Effect on the Economy
This behavioural shift is creating distinct winners and losers in the market. While overall consumer sentiment remains positive, with 77% of urban consumers planning to spend more, this spending is becoming more focused. On one hand, the travel and hospitality sectors are seeing a boom. Festive travel bookings for 2026 are reportedly running 50% ahead of last year, with domestic and religious tourism being major drivers. On the other hand, traditional retail is feeling the pressure. Early e-commerce sales data for the 2026 festive season showed a slight dip in gross merchandise value, partly attributed to higher prices for electronics, which made some consumers hesitant to upgrade. While categories like apparel and jewellery still command a large share of the festive wallet, the growth is increasingly driven by consumers seeking value and quality over impulse buys.
A Cautious But Curious Consumer
Despite the enthusiasm for experiences, there is an undercurrent of caution. A recent nationwide poll found that while many Indians are keen to travel and spend, anxiety about family finances is tempering high-ticket discretionary spending. Over half of the respondents in one survey reported their financial condition was worse than a year ago. This has led to a more strategic shopper who plans carefully and prioritises quality and trust over just discounts. Consumers are spending with intent, not abandon, often choosing to increase spending in just one or two key categories. This explains why nearly half of respondents in another survey are considering a family trip, but the destinations are primarily domestic, local, or religious pilgrimages rather than expensive international holidays.
