Americans Are Spending Way More Than You'd Expect on Travel This Holiday Season — but It Depends Who You Ask

Millenials and Gen Z are this year's biggest spenders.

Travel remains high on people's holiday wishlists. A newly released PricewaterhouseCoopers (PwC) report found that consumers are spending more on holiday travel this year and are less worried about travel disruptions.

"Travel is relatively stable, with an increased preference for domestic trips. This trend is due to geopolitical instability, rising travel costs, and increased international corporate travel, which may be reducing availability and driving up prices," Jonathan Kletzel, airline and travel practice leader at PwC U.S., told Travel + Leisure.

Millennials and Generation Z are driving the rise in travel spending. On average, millennials have set aside $751 for holiday travel, up 12 percent from 2023, while Gen Z has increased their travel budget a whopping 42 percent since last year to $639.

But not everyone is spending big. Generation X, aka those born between the mid-1960s and 1980, are cutting holiday travel expenses by 21 percent (or $481) while Baby Boomers plan to spend $321, just two percent more than they did in 2023.

According to Kletzel, the large gap in travel budgets reflects a generational difference that shows Gen X and Baby Boomers typically spend money on gifts. "The younger generations are more focused on experiences, so entertainment and travel tend to take priority," he added.

However, he also pointed out that increased budgets might be a sign that consumers are coming to terms with the fact that travel costs more these days. "As the prices for hotels, airfare, and entertainment have gone up over the last few years,  people are just budgeting more for that. They're no longer surprised at how expensive things are," he said.

The report also shows that eight percent of consumers plan to ring in the holidays abroad. Domestic travel is more attractive to 43 percent of those surveyed, and 56 percent of travelers are opting out of renting accommodations and are staying with family and friends instead to reduce travel-associated expenses.

While people are less stressed about travel disruptions like flight cancellations and delays this year, concerns about rising travel costs and budgets persist. In general, 85 percent of consumers are reducing discretionary spending, with 31 percent cutting back on trips and vacations.

"You're going to see a tale of two demographics, two socio-economic groups, which is, those who can afford to travel, it's still very important. The trend, especially with younger generations, is swapping out and focusing on experiences and travel, to the extent that they can afford to," Kletzel explained.

And lastly, 55 percent of men will travel this holiday season, while 42 percent of women have a trip in the works. Male consumers have increased their holiday budgets by 13 percent since last year and plan to spend $2,018, of which $714 is on travel.

You can read the full PwC report on pwc.com.

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