Visa's survey of roughly 4,660 adults reveals that only 15% of respondents intend to prioritize spending on experiential gifts for others this season. Persistent economic pressures, marked by September's 3.7% consumer price increase and a 22% spike in airfare, have curtailed holiday travel plans for most households. Only families earning more than $200,000 are increasing travel spending, while lower-income brackets plan to cut back or select budget-friendly brands. These shifts indicate that physical merchandise will secure a larger share of budgets than travel desires originally suggested.
Key points
High travel expenses are redirecting consumer discretionary spending away from experienti…: High travel expenses are redirecting consumer discretionary spending away from experiential gifts and back toward traditional retail goods.
Approximately one-third of shoppers earning below $100,000 intend to migrate to lower-cos…: Approximately one-third of shoppers earning below $100,000 intend to migrate to lower-cost brands and discount stores this season.
While overall holiday spending is projected to grow 4.5%, the increase reflects higher co…: While overall holiday spending is projected to grow 4.5%, the increase reflects higher consumer prices rather than substantial volume growth.
Sources checked by our analysis pipeline: 1
Consumers are hoping for more travel and experiences this holiday season, but physical gifts continue to win the lion's share of their wallets, according to a new report from Visa on Thursday.
The report found that more than half of survey respondents are putting travel and live events at the top of their wish lists. Still, only 15% of those respondents are prioritizing spending on experiences for others, while 27% of them plan to favor physical gifts.
That gap between what shoppers want and what they plan to buy is largely due to higher travel costs, lower consumer sentiment and an emphasis on value, according to Michael Brown, Visa's principal U.S. economist.
"There is some interesting trade-offs there that we're seeing on the part of consumers," Brown told CNBC. "If I'm traveling more, I'm probably going to be gifting those physical goods less, so this is really the broader context."
The survey was conducted among roughly 4,660 U.S. adults ages 18 and older, designed to be representative of the broader population of consumers.
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