Traveling more — but spending less — this holiday season

Despite more Americans planning to travel this holiday season, they’re doing so with considerably leaner budgets and scaled back itineraries, according to Deloitte’s recently released “2025 Holiday Travel Report.”

 This year’s report – written by Stamford-based Eileen Crowley, Deloitte’s U.S. transportation, hospitality and services leader – is based on a survey of 3,896 Americans taken between Sept. 26 and Oct. 5.  Of these, 2,099 respondents who are planning to travel between Thanksgiving and mid-January qualified as holiday travelers.

Key findings from this year’s report include:

 Holiday travel intent rises, but budgets tighten. More than half (54%) of survey respondents intend to travel between Thanksgiving and mid-January, up 5% from 2024. However, those respondents plan to spend less (an average of $2,334, down 18% year over year), and take fewer trips (1.83, compared to 2.14 last year).

 Among travelers planning to reduce their budgets, they said they’ll cut back on in-destination spending (28% versus 22% in 2024) and drive instead of fly (29% versus 21% in 2024).

Respondents from all income levels plan less domestic flights this season, with high-income earners pulling back the most as 53% plan to take a domestic flight at some point during the season, down from 63% last year.

Younger travelers dominate volume but not spending.  For the first time, Gen Z and millennials are expected to make up half of the traveling public this holiday season. Yet surveyed Gen Z respondents plan to reduce their holiday travel budgets the most, by 31% year over year. (Gen Z planned similar spending cuts for its holiday retail shopping. See Deloitte’s “2025 Holiday Retail Survey.”)

“Many Americans are planning fewer flights and hotel stays, with tighter wallets in tow,” said Kate Ferrara, vice chair and U.S. transportation, hospitality and services sector leader at Deloitte, which provides audit, consulting, tax and advisory services to many of the world’s best-known brands, including nearly 90% of the Fortune 500 and more than 8,500 U.S.-based private companies.

“Although our survey found that more consumers plan to travel to be with loved ones,” she added, “they are hesitant to spend on extending and upgrading their trips. This is expected to leave many travel providers bracing for a softer winter. But those who lean into loyalty and shifting preferences, particularly among younger generations, could be better positioned to weather the journey ahead.”

Luxury travel gets — and sends — conflicting signals

 Nearly one in five high-income travelers surveyed said they are worse off financially than a year ago, leading to a significant cut in travel plans. High-income survey respondents (those making $100,000 or more per year) are expected to pull back the most:  They plan to reduce their number of trips from 2.5 to 1.9, and 16% plan to decrease their longest-trip budgets significantly, up from 11% in 2024. Additionally, high-income travelers surveyed who feel worse about their finances are planning on cutting their in-destination spending (37%) or opting for less luxurious lodging (35%).

Yet even amid tightening trends, those surveyed appear to be finding room for luxury in their holiday journeys, particularly boomers, the only generation surveyed that plans to increase its travel spend – by 4% year over year.

• About one in four respondents (26%) qualify as luxury travelers, meaning they have stayed at a property they consider luxurious in the past two years and have stayed at a hotel with a nightly rate of $400 or more during at least two leisure trips in 2025.
• Luxury is not one-size-fits-all. Among luxury travelers surveyed, Gen Z travelers (49%) link luxury to the availability and quality of amenities; millennials (19%), who travel with children more than others, associate it with on-property dining; and boomers (31%) think extraordinary locations.
• Surveyed luxury travelers are also nearly twice as likely as others to book first-class air tickets and, when choosing a hotel, give much greater weight to customer service and loyalty memberships.
• Luxury travelers associate high service levels (42%) and brand name (20%) with a luxury hotel more than other respondents.

AI ascends as a digital travel agent

 With Gen Z and millennials making up half of those on the move this season, the use of GenAI for holiday travel planning is surging among survey respondents, as more travelers leverage the technology for activity recommendations, destination ideas and accommodation options that match their tastes and budgets.

• Among respondents, GenAI adoption in travel planning is expected to reach 24% this holiday season, up from 16% in 2024 and 8% in 2023. All surveyed generations are increasing their use of GenAI technology, particularly millennials (31%) and Gen Z (30%) travelers.
• This holiday season, respondents plan to use GenAI the most to research activities and attractions, with 67% of those using GenAI for trip planning, followed by destinations (56%) and accommodations (54%).
• While only 24% of GenAI-using travelers surveyed plan to use GenAI for restaurant recommendations, the restaurant sector sees this research translate to actual visits the most (55%), compared to conversion on research related to flights (46%) and accommodations (45%).
• For their longest holiday trip, surveyed travelers prefer to book via a brand’s direct channel across travel products, including flights, hotels and private rentals.

What this means for the travel and tourism industries

 Travel and tourism may see a weaker holiday season as surveyed Americans become more mindful of what they pack into their itineraries.

• Fewer surveyed travelers intend to catch flights this holiday season as 47% of travelers said they will take a flight on their longest trip of the season, down from 55% in 2024.
• Respondents from all income levels plan to fly less, with high-income earners pulling back the most. Here 53% plan to take a domestic flight at some point during the season, down from 63% last year. But international travel is expected to increase slightly among low-income earners (10% versus 6% in 2024).
• Loyalty still flies with air travelers:  When it comes to purchasing airfare, 37% of air travelers surveyed plan to purchase the lowest-price ticket on their preferred airline.
• With tighter budgets, 57% of surveyed travelers planning to drive instead of fly on their longest trip are doing so to save money, up from 47% in 2024.
• Middle- and high-income respondents plan to pull back on hotel stays, while low-income earners plan to increase their hotel stays slightly, up 3% year over year.
• For many surveyed hotel travelers, rates reign supreme, as 63% ranked them in the top three attributes in their hotel selection, followed by customer service (29%) and loyalty programs (27%).
• Surveyed travelers plan to cut back on tours and activities year over year, with participation in ticketed or public events expected to decline 9% on Americans’ longest trips, 8% on guided day trips and 7% on tours.

Still, survey author Crowley sees possibilities amid a challenging picture:

“Despite economic uncertainty, holiday travelers appear to be plugged-in and ready to roam. More surveyed travelers are embracing AI tools to seamlessly craft personalized adventures. What’s more, respondents are willing to splurge on a luxurious experience. Travel providers who focus on innovation and engaging consumers across generations and income levels will likely have the opportunity to capture attention from those planning more travel in the new year.”