More Americans plan to travel over the festive period than at any point in the past five years, but Deloitte’s new survey shows that financial pressures are prompting shorter, simpler and more frugal holidays. Olivia Palamountain reports

Deloitte’s 2025 Holiday Travel Survey suggests a complex season ahead for the travel industry, with rising demand set against increasingly cautious spending habits.

The research, based on responses from 3,896 Americans, reveals that 54 per cent of people intend to travel between Thanksgiving and mid-January, five percentage points more than last year. Yet despite this momentum, travellers say they will spend an average of US$2,334 – an eighteen per cent decline year on year – signalling a shift towards pared-back itineraries and fewer discretionary purchases once on the ground.

The broader context is one of worsening personal finances. Nearly one third of respondents say they are worse off than a year ago, up from twenty-six per cent in 2024. High-income earners, typically a stabilising force for the industry, are showing some of the sharpest retrenchment. They plan to reduce their number of trips from 2.5 to 1.9 and many intend to downgrade accommodation or cut in-destination spend. Sixteen per cent expect to significantly reduce their longest-trip budgets, compared with eleven per cent last year.

Generational patterns further illustrate the tightening mood. For the first time, Gen Z and millennials are expected to represent half of all holiday travellers, yet Gen Z plans to cut its seasonal travel budget by thirty-one per cent year on year. This mirrors the cohort’s reduced holiday retail spending intentions in Deloitte’s parallel retail study. Boomers are the only generation planning to increase travel spend, albeit by a modest four per cent.

The effect is visible in the type and length of trips people intend to take. Travellers now expect to average 1.83 trips over the season, down from 2.14 last year. Air travel is set to soften: only forty-seven per cent plan to fly on their longest festive trip, compared with fifty-five per cent in 2024. This pullback spans income levels, with high-income respondents reducing domestic flights most sharply. By contrast, road travel is on the rise, with more than half of those choosing to drive saying they are doing so to save money.

Accommodation choices are similarly shifting. Middle- and high-income travellers expect to scale back hotel stays, while low-income travellers show a slight increase. Rate sensitivity is decisive, with sixty-three per cent ranking price as one of the top three factors in choosing a hotel, followed by customer service and loyalty programmes. Spending on tours and organised activities is expected to drop notably, suggesting that more travellers will prioritise simple, home-centred gatherings or low-cost leisure over paid experiences.

Even with these pressures, certain segments are bucking the trend. “Laptop luggers” – travellers who plan to work during their longest holiday trip – remain relatively resilient. Although their numbers have dipped slightly to forty-four per cent, they continue to take more trips and allocate higher budgets, spending an average of US$3,283 for their longest journey. Many plan stays of seven nights or more, reflecting the ongoing integration of remote work into leisure travel.

Luxury travel shows similar resilience. Around one quarter of respondents meet Deloitte’s definition of luxury travellers, and they continue to prioritise high service levels, strong brand identity and premium amenities. Generational interpretations of luxury vary, from standout facilities for Gen Z to strong dining credentials for millennials and noteworthy locations for boomers, but the willingness to invest remains intact.

One of the report’s most forward-looking insights is the rise of generative AI in trip planning. Usage is expected to reach twenty-four per cent this season, triple the rate recorded in 2023. Millennials and Gen Z are leading adoption, using AI for activity ideas, destination research and accommodation recommendations. While fewer travellers consult AI for restaurant suggestions, this category shows the highest conversion from research to actual visits, hinting at AI’s growing influence on dining patterns and on-the-ground decision-making.

Against this backdrop, Deloitte highlights a clear message for the travel sector. “Many Americans are planning fewer flights and hotel stays, with tighter wallets in tow,” says Kate Ferrara, vice chair and US transportation, hospitality and services sector leader. “Although our survey found that more consumers plan to travel to be with loved ones, 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.”

A second perspective comes from Eileen Crowley, Deloitte’s US transportation, hospitality and services leader, who notes that despite financial caution, digital and experiential expectations remain high. “Despite economic uncertainty, holiday travellers appear to be plugged-in and ready to roam. More surveyed travellers are embracing AI tools to seamlessly craft personalised 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.”

The overarching narrative is one of intentionality: people still value travel, but they are engaging with it differently. For providers, the months ahead will require agility, careful pricing strategies and a deeper understanding of travellers who are simultaneously cautious, digitally empowered and increasingly selective about where and how they spend.