The State of the American Traveler in January 2025—A Strong Start to the New Year, Buy Now Pay Later for Travel, School Holidays

American traveler sentiment should make for a strong start to 2025 for the travel industry. Meanwhile, travel brands should keep on eye on trends influencing travel buying and behaviors, including Buy Now Pay Later options, political affiliation, school holidays and expectations for AI.

IMPORTANT: These findings are brought to you from our independent research, which is not sponsored, conducted, or influenced by any advertising or marketing agency. The key findings presented below represent data from over 4,000 American travelers collected in December 2024.

Travel Spending Outlook is Strong Going into 2025

• 2024 closed out with American travelers' maintaining a stable sense of financial wellness. In December 2024, 31.7 percent of American travelers reported feeling that their household is better off financially compared to a year ago. This is a +2.4-percentage point increase over the previous month, and statistically on-par with the year prior.  In terms of American travelers' outlook on their future financial wellness, the share of those who expect their household will be better off in the coming year remained flat relative to the month prior—as well as the year prior--at 49.1 percent. These indicators, bolstered further by the historically low share of American travelers who anticipate a U.S. economic recession in the next six months (35.3%), suggest a stable financial confidence going into 2025 among American travelers.
• Looking at how this sentiment translates to travel spending in the near-term, 36.9 percent of American travelers now say the present is a good or very good time to spend on travel—the highest this metric has been since February 2022 (37.8%)--and 58.2 percent say that travel will be a high budget priority for them in the next three months. In terms of what American travelers anticipate their travel budgets will be for 2025, 34.5 percent expect to spend more on travel in the coming year, up +2.6-percentage points month-over-month and +3.3 points year-over-year. The average annual leisure travel budget continues to trend upwards, approaching $6,000 this month at $5,898.
• In terms of travel volume, the typical American traveler anticipates taking 3.9 leisure trips in the next year, up from 3.5 a year prior.  When asked about expected trip types in the next three months, more American travelers expect to take a purely leisure trip (67.3%) than the share of those who say they will take a trip specifically to visit friends and family (61.3%) in Q1 2025. In addition, excitement for travel remains at record levels—8.3 on a scale from 0-10, up from 7.9 one-year ago. 

A Closer Look at Trends Impacting Traveler Planning and Budgeting

Buy Now Pay Later

• A trending topic that we examined in this latest wave of The State of the American Traveler is the adoption of "Buy Now, Pay Later" (BNPL) payment plans to finance trips in 2025. More than one-in-five American travelers (21.2%) say they are likely to use "Buy Now, Pay Later" payment plans for some of their trips this year, although 62.8% say they are unlikely to.  As you might expect, usage of BNPL for travel is driven by age. Some 45.0 percent of Gen Z say they are likely to use BNPL to finance their trips in 2025, followed by 33.2 percent of Millennials and 21.2 percent of Gen X. Meanwhile, just 7.8 percent of Baby Boomers said they were likely to.

School Holidays

• Future Partners also recently asked parents who typically travel with their school-aged children about the role of school holidays in how they schedule their family vacations. Over half (57.9%) of these travelers reported that school holidays indeed dictate when they schedule their family vacations completely or quite a bit, while only 7.5 percent said not at all. Among those who reported having some level of flexibility around scheduling their family vacations regardless of school holidays, the most commonly selected factors behind this were parents' flexible work schedules (57.2%), supportive school policies (41.2%), technology that allows children to complete schoolwork remotely (36.9%), and the benefit of lower travel costs during non-peak seasons (34.4%).

AI

• Nearly 62 percent of American travelers feel it’s likely or certain that usage of AI tools like ChatGPT and Gemini to plan travel will become much more popular in 2025, up 3-points in the last year. While the expectations are clearly there, perhaps the available AI tools and their benefits may need to catch up them. American travelers’ deliberate usage of AI tools for travel remains at 14.2 percent—still below the record high of 17.0 percent in November 2023. 

Politics

• More than half of American travelers (52.3%) feel its likely that an increasing number of travelers will avoid (or select) destinations based on their personal politics. Although this is down 4-points from last year, it remains something to watch and consider in travel motivations.

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