Holiday spending rises through 2025, particularly for consumers under 45
With the pandemic’s global travel lockdown fading to distant memory, a new study from Simon-Kucher suggests that travelling for multiple holidays each year is becoming the norm – especially among younger consumers. This cohort are also increasingly willing to use AI throughout their holidays – though the ways which they deploy it are still largely in line with pre-existing digital tools.
Amid the Covid-19 lockdown, global travel famously ground to a halt – while in the years since, huge inflationary pressures have slowed the sector’s recovery from this. But travel has finally returned to pre-pandemic levels in 2024 – and now further research suggests it is poised for more bullish growth.
In its sixth annual ‘Travel Trends Study’, Simon-Kucher surveyed more than 10,000 qualified travelers across China, France, Germany, India, Netherlands, Saudi Arabia, Spain, UAE, UK, US. And the results were clear: holiday spending is now the fastest-growing household expense across the regions polled – with 45% of respondents saying they were increasing their vacation budgets in 2025. That is 4% more than in 2024, and places it ahead of 38% who are spending more on groceries (itself rising by 7%) at the top of the consumer agenda.
The anticipated budget for the average holiday experience also saw a concentrated rise this year. According to the data presented in Simon-Kucher’s report, no consumers in any category said they were downsizing spending on holidays, while those below 45 years old were sinking more into their leisure spending.
Simon-Kucher’s report suggests that 64% of those aged between 30 and 44 were increasing spending by at least 10%, while 15% of those were upping their bill by upwards of 20%. This was even higher in those aged 18-29, where only 32% said their budget would be unchanged, while 19% said they would increase spending by over 20%.
The frequency of travel is also increasing across age groups. A 59% majority of Gen Z, and 57% of Millennials said they went on at least two holidays of five days or more in 2025. The majority of both cohorts also went on an international break, while only 14% said they holidayed domestically. According to Simon-Kucher, a factor which may be helping boost travel in younger demographics is the advent of AI. Over 60% of Gen Z and Millennials told researchers that they use AI tools for travel inspiration and itinerary planning.
New tools
“The next wave of growth will come from travellers who want smarter, healthier, and more sustainable experiences. To win, travel providers must meet customers where inspiration and planning happens, on AI platforms and social media feeds, while tailoring offers to the motivations of younger travellers,” commented Vijesh Patel, director at Simon-Kucher. “AI is enabling hyper-personalization, wellness is shifting from luxury to lifestyle, and sustainability is now an expectation. For the industry, success will mean curating journeys that reflect these values.”
Before tourism firms rush to invest in various tools for their business, however; if, where and when that translates to huge new opportunities for the travel sector remains to be seen. For example, while developing nations were happy to deploy AI tools to help plan and provide inspiration for their next trip – 81% of Chinese respondents agreeing with that, alongside 76% in Saudi Arabia and 71% in India – Europe and North America were more reserved. In the home of AI hype, only 48% agreed with the idea of using AI tools for this function, while 47% outright rejected the prospect in the UK. In France and the Netherlands, that negative sentiment hit six-in-ten respondents.
The cause of those reservations in making reservations with the help of AI may also have been born out in the way consumers said they already use the technology. While 42% said they were happy to use an AI-generated itinerary on their travels (with help from a tool like ChatGPT), and 33% turned to pre-existing tools like Google Translate to help bridge a language barrier, these are things which have long been applications for previous generations of the internet.
Searching the internet for pre-made itineraries for any said destination has been a common part of travel for some time – while digital translators are relatively low-risk. But when it came to trusting AI with something with more weight – like actually booking tickets – consumers still baulk. Amid endless tales of agentic AI fumbling other such purchases, only 7% would use such a tool for automated bookings, and 8% for travel disruption management – both things which could cost large amounts of money if they are ‘hallucinated’ over.
