Consumers are spending on physical gifts even as travel tops wish lists, Visa survey finds

Summary

• More than half of survey respondents prioritize travel and live events on their wish lists, yet only 15% plan to prioritize spending on experiences for others while 27% favor physical gifts.
• The gap between consumer desires and spending plans stems from higher travel costs, lower consumer sentiment, and an emphasis on value.
• Rising airfares & general inflation are expected to cause more people to celebrate holidays closer to home.
• Consumer prices rose 3.7% annually in September, driven by surging energy costs.
• Airline fuel costs have risen by billions of dollars due to the war in the Middle East, contributing to fares that were up more than 22% in September compared to a year earlier.
• Only households with an income above $200,000 spent more on trips departing between November 1 and early next year compared to the 2025 to 2026 period.
• Affluent demographics with equity holdings show increased positivity & spending, while less affluent shoppers with incomes below $100,000 plan to switch to lower-cost brands or stores.
• Visa projects a 4.5% year-over-year increase in holiday sales growth, but this figure is largely due to inflation; without price increases, sales are expected to rise just 1.1%.
• The shift toward physical gifts over travel could boost the retail sector despite overall spending pressure.
• Consumers are internalizing higher prices & may be expecting to spend more due to accustomed price levels & perceptions of future inflation.