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Holiday travel holds its nerve as shoppers pull back: Takeaways for tourism from PwC’s 2025 Holiday Outlook

  • Automatic
  • 4 September 2025
  • 3 minute read
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This article was written by Hospitality Net. Click here to read the original article

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Even as US consumers signal the first notable 5% decline in overall holiday spending since 2020, travel demand looks surprisingly resilient. PwC’s latest Holiday Outlook suggests travel and entertainment will be “holding steady,” ticking up by about 1% year over year — a bright spot in an otherwise tighter season.

“Travel and entertainment are holding steady, with modest 1% gains YoY.”

Who is travelling — and why it matters

Forty-four percent of consumers plan to travel around the holidays, essentially unchanged from last year’s 46%. Millennials and Gen Z lead intent (both at 55%), while Boomers trail at 26% and Gen X sits near 39%.

Among those not travelling, the stay-home impulse is strong and practical: roughly half say they prefer to celebrate at home, and 43% cite cost concerns (rising to 50% for Gen Z non-travellers). Expect a continued tilt toward visiting-friends-and-relatives (VFR): about 48% of those planning trips say family and friends are the primary reason.

Generational money mood: divergent paths

The generational picture is stark. Gen Z plans a 23% pullback in holiday spend after last year’s 37% surge, while Boomers expect to spend 5% more. Millennials are essentially flat (down 1%) and Gen X edges up 2%. For travel sellers, that mix implies stronger conversion potential in older cohorts with more buoyant budgets, and a need for sharper value propositions for younger travellers.

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AI enters the itinerary

Discovery is changing fast. A striking 76% of Millennials say they are likely to use an AI agent for travel recommendations — a clear signal that trip planning will be shaped by conversational tools that compress research, compare options, and nudge toward booking. Brands that are not yet feeding clean content, inventory, and policy data into AI-readable formats risk invisibility in this new “assistant-first” funnel.

Value is the new luxury

Consumers are trading down in several categories, but travel budgets are proving sticky. With overall holiday spend down 5% and gift spend down 11%, households are prioritising experiences and togetherness over “things.” Positioning flexible fares, transparent fees, and meaningful perks will resonate. Keep an eye on tariffs and price headlines: cost anxiety correlates with lower discretionary outlay elsewhere, even if travel holds up.

Operational timing: later Thanksgiving, tighter window

This year’s late Thanksgiving (27 November) compresses the promotional calendar and could bunch bookings, especially for shorter-haul VFR trips. Ensure inventory is well surfaced early, cancellation rules are simple, and last-minute availability is accurate across metasearch and AI surfaces alike. (PwC notes the retail calendar squeeze; the same behavioural pressure often echoes in travel.)

What travel & hospitality should do now

  • Win Millennials in the AI era. Publish structured content that LLMs can parse: clear route maps, inclusions/exclusions, child policies, resort fees, and loyalty terms. Provide API access where possible so assistants can quote and compare accurately.
  • Merchandise “value clarity.” Bundle high-salience benefits (Wi-Fi, breakfast, late checkout) and spotlight total-trip cost. Gen Z’s pullback makes price-to-experience ratios decisive.
  • Target Boomers and Gen X with confidence. These cohorts show steadier or rising spend; emphasise comfort, reliability, and seamless service — and make it easy to book multi-generational stays.
  • Lean into VFR. Create “home for the holidays” packages near residential hubs: flexible date changes, partner ground transport, and simple add-a-night extensions.
  • Protect late demand. Expect a condensed booking curve. Hold back a small quota for close-in inventory, streamline mobile checkout, and keep cancellation policies humane to unlock last-minute conversions.

Bottom line

The 2025 holiday season may be leaner at the till, but travel remains emotionally and socially essential — and that resilience shows in the data. Operators that meet the moment with value clarity, AI-ready content, and segment-savvy offers will not just weather the season; they will win it.

About the survey: PwC surveyed 4,000 US consumers from June 26 to July 9, 2025. Respondents were balanced across gender, region and generation — including 1,000 each from Gen Z, Millennials, Gen X and Baby Boomers.

Read the full article at PwC

Please click here to access the full original article.

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