A recent Visa survey reveals that while many consumers are prioritizing travel and live experiences in their holiday wish lists, the majority are still allocating more of their spending towards physical gifts this season. Over half of the respondents expressed a desire for travel and events, but only 15% plan to spend on experiences, compared to 27% who intend to purchase tangible presents. Visa’s principal U.S. economist, Michael Brown, attributes this discrepancy to escalating airfare prices, inflation, and a growing consumer focus on value.

The survey, conducted with about 4,660 U.S. adults, illustrates how rising travel costs are influencing spending choices. Due to a surge in energy expenses fueled by the ongoing Middle East conflict, airline ticket prices have increased significantly, with fares jumping more than 22% year-over-year in September. This inflationary pressure is prompting many consumers to plan holiday celebrations closer to home, leading to more conservative travel budgets despite their aspirations for experiences.

Income disparities further shape holiday spending patterns, as only households earning above $200,000 expect to spend more on travel through early 2027. This affluent group’s increased spending is partly driven by positive returns in the equity markets, which has encouraged greater overall expenditure. In contrast, lower-income consumers are more focused on affordability, with about one-third intending to switch to budget-friendly brands or stores for gift shopping amid rising prices.

Visa projects a 4.5% increase in holiday sales growth year-over-year, but much of this is attributed to inflation rather than volume. Without inflation’s impact, the actual sales growth would be closer to 1.1%, slightly below last year’s 1.3% rise. Despite these economic challenges, Brown suggests that the greater emphasis on purchasing physical gifts over experiences could benefit the retail sector, even as consumers remain cautious due to uncertainty about future inflation trends.