Visa forecasts 4.5% holiday sales rise as shoppers choose gifts over travel they can't afford

Most Americans say they want travel and live experiences for the holidays this year. Most Americans will be buying sweaters and gadgets instead — and the reason is simple: they can't afford the trip.

When Visa Business and Economic Insights (VBEI) published its 2026 U.S. Holiday Spending Outlook, it revealed a notable gap between what people want and what they plan to buy: although more than half of those surveyed ranked travel and live events as their top holiday wishes, just 15% said they would prioritize experience-based gifts for others, while 27% said they would lean toward physical presents. To gather that data, VBEI polled approximately 4,660 U.S. adults aged 18 and up, with the sample structured to reflect the general population.

Michael Brown, Visa's principal U.S. economist, said the gap stems from a combination of rising airfares, widespread inflation, weakened consumer confidence, and shoppers' ongoing focus on getting the most for their money. According to the consumer price index, airfares climbed more than 22% in September relative to the same month a year before, as carriers transferred the burden of soaring fuel costs — themselves a consequence of the war in the Middle East — to passengers. Airline executives have indicated that ticket prices are expected to remain high even if fuel costs come down.

Consumers are aspirational. They want those experiences, they want to travel, they want to be out in the world. 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.— Michael Brown, Principal U.S. Economist, Visa

The travel pullback is starkly split by income. When VBEI examined anonymized Visa credit card transactions, it found that households with annual incomes above $200,000 stood alone among all income groups in growing both their holiday airfare bookings and their airfare spending in September, with bookings rising 29% and spending climbing 38% year over year. Lower-income groups pulled back sharply. Brown told CNBC that stock market performance played a role in that resilience among wealthier consumers: "A lot of them own equities, and the equity market runup over the last several months has created a lot of positivity among that specific affluent demographic."

For everyone else, value is the watchword. According to Visa's October consumer survey, about one in three shoppers with household incomes below $100,000 intend to trade down to cheaper brands or retailers for holiday purchases this year.

Despite those pressures, overall holiday spending is expected to grow. VBEI forecasts U.S. holiday retail sales — covering November and December, and excluding travel and dining — will rise 4.5% year-over-year, which would be the strongest growth since 2021. Shoppers report planning to spend an average of $777 on holiday gifts this year, a 5.6% jump from the $736 average recorded in 2025. That nominal gain is largely eroded by inflation, however: VBEI projects that prices for holiday-related goods will increase roughly 3.4%, leaving real spending growth at only 1.1% — a step down from the 1.3% inflation-adjusted gain seen during the 2025 holiday season.

Consumers are heading into the holidays with the capacity and willingness to spend, even if they're being thoughtful about where those dollars go. Income growth continues to provide an important foundation for spending, and while higher prices remain part of the picture, we expect another healthy holiday season.— Michael Brown, Principal U.S. Economist, Visa

Brown noted that the higher planned spending figures need to be read carefully. He told CNBC that shoppers appear to be factoring in higher prices when estimating what they will spend: "Consumers are internalizing higher prices of things, and I think that's why they're reporting higher anticipated spend this year." He added that the data should be interpreted with inflation in mind, saying, "I think these numbers just need to be looked at through the lens of the inflation and particularly consumers' perception of where inflation is going to go. I think that weighed heavily on consumer psychology this season."

For retailers, the travel-to-gifts shift could be a quiet tailwind. Brown said the trend may offer some encouragement to the broader retail sector at a difficult time for spending: since VBEI's holiday sales measure covers only retail and leaves out travel and dining, money that consumers would otherwise have directed toward holiday trips may end up being spent on physical goods instead.

Consumers are still spending, but they're making deliberate choices about where their holiday dollars go. That combination of healthy spending and continued focus on value is likely to define this holiday season.— Michael Brown, Principal U.S. Economist, Visa

Why it matters — With inflation quietly converting nominal spending gains into real-terms stagnation, the holiday season will test whether retailers can capture dollars that consumers can no longer afford to spend on travel.

Reported by cnbc.com, visa.gcs-web.com, morningstar.com