by Mia Taylor
Last updated: 3:10 PM ET, Tue November 25, 2025
With the cost of living heading steadily upward in the United States over the past six months, fewer Americans are hitting the road or taking to the skies for the holidays.
The newly released BMO Real Financial Progress Index shows that 62 percent Americans have become more concerned about the cost of living over the past three months in particular.
Additionally, just 40 percent of Americans plan to spend any money on holiday travel this year, a decline from 45 percent of Americans who traveled for the holidays in 2024.
About one in five (20 percent) Americans, meanwhile, have cancelled or postponed travel plans amid rising costs in the United States, with nearly half of that group (46 percent) saying that travel is a lower priority than daily living expenses.
Not only is travel declining in importance as wallets get stretched, but 32 percent of Americans who postponed or canceled travel did so because they do not have enough money left after purchasing gifts.
Tariffs introduced by the new presidential administration have driven up prices on everything from food to vehicles, electronics and furniture, per the Federal Reserve Bank of St. Louis. The price movements on consumer goods “align with the timing of tariff hikes earlier this year,” the Federal Reserve said in a recent report.
Paul Dilda, head of U.S. Consumer Strategy, BMO, echoes the Federal Reserve's findings.
"The holidays this year come on the heels of a period defined by inflation and price volatility for everyday items, leaving many consumers confused and stressed as they plan for year-end festivities,” said Dilda.
“Nearly two-thirds (63 percent) say they are more concerned about inflation than they were three months ago, and 57 percent report growing worries about import tariffs,” Dilda added. “These concerns are reshaping holiday plans with 62 percent changing how they spend due to tariff-related price uncertainty."
The BMO Index is one of a handful of recent reports indicating that Americans plan to stay closer to home for the holidays. A recent report from Upgraded Points showed that more than half of Americans (56 percent) will celebrate the holidays at home, while
about one-third (34 percent) will go to someone else's place, and nearly
one in 10 (9 percent) will head out on vacation.
With money pressures weighing heavily on the wallets of Americans this year, the BMO Index also revaled that of the 62 percent of respondents who are adjusting their lives in response to tariffs, nearly half (49 percent) will be trying to source gifts that have been “minimally affected by tariffs” and 36 percent will increase their budgets in anticipation of having to spend more due to now higher costs.
Not everyone is scrapping holiday travel this year, however. The United States continues to be a tale of two economies. And some Americans plan to spend big this year. Americans who still have the free cash to travel this holiday season are budgeting an average of $1,230 on festive travel, says the BMO Real Financial Progress Index.
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
