Three Things Brands Must Know About Holiday Travel

Whether you’re still lamenting the end of long sunny summer days or you started singing Christmas carols at midnight on November 1st, there’s no denying it: winter is coming. And with winter comes the busy holiday travel season, when millions of people venture near and far to spend time with their loved ones and celebrate the season. 

Of course, this all comes at a cost for travelers, and as reaffirmed by the recent presidential election in the U.S., the economy is weighing heavily on consumers’ minds. That said, 2024 has been an excellent year for the travel industry, and the holiday season looks to continue that trend. In order to properly prepare for the festive rush, there are three things travel brands need to know. 

1. Young people and parents will drive holiday travel bookings

The holiday season draws travelers of all generations, who either venture out of town to celebrate with friends and family, or who take advantage of school holidays or slow days at work for a getaway. But not all consumers travel in the same way. When it comes to paid transportation such as flights, rental cars, buses and trains, younger travelers are generally more likely to be booking compared to older consumers. This is especially true of flying — over half of millennials and Gen Z adults with travel plans in the holiday period expect to go by plane. Conversely, baby boomers are most likely to be taking their own car on their holiday travels.

The younger generations diverge slightly when it comes to accommodations. Gen Zers are far more likely than other generations to be staying with friends and family rather than paying for accommodation, which is likely life stage driven. Many of these travelers will be “going home” to their childhood house, perhaps even staying in their old bedroom, over the holidays — a prospect that becomes much more difficult when someone is bringing a partner or has children of their own. This lifestyle shift is evident in the share of millennials (most likely to be parents of young children) who say they plan to stay in a vacation rental. About 2 in 5 (39%) of millennials with travel plans will choose to stay here over the holidays, 8 percentage points higher than the general population and higher than any other generation. 

Parents in general diverge from non parents in their holiday travel tendencies. Specifically, they are more likely to say they plan to fly for the holidays than non parents, perhaps due to the geographical distance between extended families and the desire (or pressure in some cases) to have children spend holidays with their grandparents. They are also 15 points more likely than non parents to say they plan to use a vacation rental, further underscoring the importance of that accommodation type, which offers space and autonomy while traveling, for families.

2. Price sensitivity may keep some prospective travelers from booking

There’s good news for travelers this holiday season, and that is that travel prices have steadied since spiking in 2022. While travel overall is still slightly more expensive than it was in pre-pandemic years, it is consistent with the same period in 2023, during which travelers planned a record number of holiday trips. What’s more, when the sub sectors are unraveled, airfare (often the most expensive aspect of travel) is actually lower in October 2024 than it was at the same time in 2019.

But that reality is not necessarily reflected in consumer behavior. Price sensitivity — the net share of consumers willing to forego a purchase if faced with higher-than-expected prices — is up nearly 5 index points from the same time last year for vacations and travel, suggesting that some travelers may be willing to abandon their holiday trips if prices don’t align with their budgets.

When it comes to airfare, consumers seem to have resigned themselves to the price of flying (evident in the fact that the price surprise index is in the negative). Price sensitivity for accommodations is up slightly compared with last year though, possibly leading some travelers to either shorten trips to minimize overnight stays, or to bunk with friends and family. That said, given the generational differences in accommodation preferences, Gen Zers and baby boomers will be more likely to lean toward staying with loved ones, while millennials and Gen Zers will favor the paid option.

The good news for brands is that, in years past, price sensitivity in these travel categories has come down after the holiday period. But in the meantime, converting price-sensitive travelers will be crucial in maintaining volume during this critical time of year.

3. Last minute discounts may drive more bookings

Historically, most holiday travel has been reserved by early November, but there is still time for those who are planning on traveling but have not yet booked. Around one-third of U.S. adults say they’re waiting for a price decrease to book travel, though 18% say that if the discount doesn’t come they may purchase at the higher price.

Younger travelers — those who are most likely to be booking paid reservations — are also the most likely to be keeping their eye out for sales, as are parents who are on the hook to pay for more travelers than non-parents. Notably, high earners are far more likely than middle-and-low-income adults to say they’re waiting for a price decrease, although this may be more representative of a higher intent to travel than price sensitivity, as this data represents all adults rather than just those who have upcoming travel plans.

Ultimately, perceived economic circumstances weigh heavily on travelers’ purchase decisions given the fact that travel is inherently an expensive category. That said, holiday travel is a time-honored tradition, and most don’t want to give up their plans to celebrate with friends and family. Travel brands can reach price-sensitive travelers with last-minute deals and offers to drive bookings and revenue to close out a successful 2024.

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