Holiday travelers cut spending sharply amid economic squeeze

The average consumer plans to spend $419 on holiday travel this year, down 24% from the $553 recorded in 2025, based on the PwC Holiday Outlook 2026 survey of 4,093 U.S. adults.

Travel plans persist despite tighter budgets

Nearly 40% of respondents still intend to travel between November 1 and December 31, slightly lower than the 44% who made similar plans last year, while 17% remain uncertain about their travel arrangements.

Cost-cutting measures focus on core expenses. About one-third of those traveling will skip airfare entirely, 38% will choose budget or mid-range hotels, and 35% will stay with friends or family rather than book paid lodging.

Younger generations show the most significant spending cuts. Millennials now project spending $510, a 37% decrease, while Gen Z budgets drop to $358, down 29%. Gen X reduces spending to $447, an 18% decline. Only baby boomers increase their holiday travel budgets, rising 1% to $361.

Even higher-income households are adjusting plans. Half of families earning $150,000 or more still plan to travel, but they favor mid-range accommodations and are more likely to use family guest rooms instead of private suites.

These trends align with past holiday seasons when inflation strained discretionary spending. The current restraint parallels the 2022 slowdown, when rising gas prices and lower personal savings led to similar shifts toward cheaper lodging and shared stays.

Gasoline prices rose sharply during the survey’s June fielding, and the personal savings rate fell from 4.5% to 2.7% between January and June, according to economic data. These factors directly contribute to the cautious approach among travelers.

AI tools influence booking decisions

Artificial intelligence now plays a role in holiday planning for 60% of travelers, up from 57% in the prior year. The most frequent uses include price comparisons for flights and hotels (41%), receiving recommendations (32%), and assembling itineraries (22%).

Industry experts advise treating the season as a value proposition rather than addressing a demand shortfall. Maintaining stable prices or adjusting capacity may be more effective than raising rates for cost-conscious consumers.

Loyalty programs are under closer examination as travelers weigh points against lower headline prices. With 41% of shoppers using AI to compare options before booking, transparency in rates and package details is critical, especially in AI-generated responses.

Gift-giving budgets remain more stable than travel spending. Consumers expect to spend an average of $708 on presents, a slight 2% decline, despite an 18.5% drop in consumer confidence between June 2025 and June 2026.

The holiday traveler this season will likely still book trips but will prioritize lower costs—whether through cheaper fares, mid-range hotels, or staying with relatives. AI tools will play a key role in shaping decisions before direct contact with travel providers.