Holiday Gift Spending Remains Dominant Despite Travel Wishes

27% of U.S. consumers plan to favor physical gifts this holiday season, according to a new report released Thursday by Visa. That figure stands in sharp contrast to the 15% of respondents who intend to prioritize spending on experiences for others. The data reveals a distinct disconnect between consumer desires and actual purchasing plans. While more than half of survey participants listed travel and live events at the top of their wish lists, their wallets tell a different story.

Michael Brown, Visa's principal U.S. economist, attributed the discrepancy to rising travel costs and a general shift toward value shopping. He noted that consumers face trade-offs when deciding how to allocate their budgets. "If I'm traveling more, I'm probably going to be gifting those physical goods less, so this is really the broader context," Brown said. The survey captured the sentiment of roughly 4,660 U.S. adults ages 18 and older, a sample designed to be representative of the national consumer base.

Economic pressure is forcing many holiday travelers to stay close to home. Visa expects more people to celebrate the holidays locally than in previous years due to rising airfares and general inflation. Consumer prices rose 3.7% annually in September, driven largely by surging energy costs. Airlines have increased ticket prices this year as fuel costs rose by billions of dollars because of the war in the Middle East.

Executives have indicated that fares are likely to remain high even if fuel prices drop. The consumer price index showed fares up more than 22% in September compared with a year earlier. This trend means shoppers are becoming more intentional about where they direct their money. "Consumers are aspirational. They want those experiences, they want to travel, they want to be out in the world," Brown said. "However, the economic reality is with prices rising, with economic uncertainty, they need to balance the reality of today's economic environment with those aspirations."

Income levels play a decisive role in holiday travel decisions. Only households with an annual income above $200,000 spent more on trips departing between November 1 and early next year compared with the same period in 2025 and 2026. Most other income groups reduced their travel budgets. Brown linked this spending surge among the wealthy to recent gains in the equity market, which boosted confidence in that specific demographic.

Less affluent shoppers are focusing heavily on value. Visa's October consumer survey found that roughly one-third of consumers earning below $100,000 plan to switch to lower-cost brands or stores for holiday gifts. This shift reflects a broader strategy to manage spending amid persistent price increases.

Visa projects a 4.5% year-over-year increase in holiday sales growth. However, a large portion of that figure results from inflation. Without price increases, sales are expected to rise by just 1.1% this year. That is down from the 1.3% increase recorded during the 2025 holiday season.

Brown said the findings may be positive for the retail sector. With less emphasis on travel and more projected spending on physical goods, the industry could see a boost at a time when spending is under pressure. He added that consumers might be reporting higher anticipated spend simply because they have become accustomed to higher prices. "But, of course, consumers are internalizing higher prices of things, and I think that's why they're reporting higher anticipated spend this year," Brown said. He emphasized that these numbers must be viewed through the lens of inflation and consumer psychology.