The Points Guy (TPG) has released its 2025 Travel Trends Report, highlighting the global conditions that will shape why and where Americans will travel next year.

The report found that while expected travel spending has increased in most cases, the desire to travel has not waned heading into 2025. In fact, people are willing to spend even more money on meaningful trips where they can connect with others through cultural moments and shared interests. That said, travelers have a renewed focus on getting the most value for their money (and miles).

"It's clear that travel isn't slowing down anytime soon and will only keep increasing steadily as we head into 2025. Americans are more excited than ever to explore the globe despite rising costs and climates, making it crucial to plan ahead, do your research and take full advantage of points and loyalty programs to score the best deals," says Brian Kelly, founder of The Points Guy.

Expect to Spend More

It's no secret that expenses are increasing across the board, and travel is no exception. While airfare and lodging costs are actually down compared to 2023, consumers are choosing to spend more on experiences and nightlife, as well as taking longer trips to enjoy their destinations. For example:

• Recreation and food and beverage spending saw a 4% increase from 2023 to 2024, fueled by increased desire for authentic and novel travel experiences
• Specifically, Mastercard found that 12% of all tourism sales are now allocated towards experiences and nightlife, and more than half of Gen Z respondents and 47% of Millennials would prefer to save money on flights instead of sacrificing the experiential aspects of their trips, according to McKinsey data
• The average trip in 2024 was 5.5 days, up from 4.5 days in 2020, and Gen Z is also spending more money to travel further from home, booking international trips just as often as domestic flights

Travelers Are Craving Shared Experiences

Supercharged by Taylor Swift's "Eras Tour," the era of event travel is here to stay. From international concerts to music festivals and even historic events (like the 2024 solar eclipse), travelers are planning both short trips and full vacations around shared experiences. Data from Vacasa found that 47% of travel is now planned around a central event, making it more important than ever for people to book early to avoid sold-out scenarios and exorbitant prices.

New Points and Miles Challenges

While travel enthusiasm is at an all-time high, points and miles are getting more complicated to obtain and leverage. Credit card annual fees have increased by $100 for some of the most sought-after travel cards, and redemption rates are also on the rise. Even typically affordable partner programs saw unexpected price increases in 2024 – for example, British Airways' domestic Avios redemptions flying American Airlines and Alaska Airlines increased on average by 35% in Main Cabin economy and 39% in first class.

All these changes might seem overwhelming, but points and miles still hold immense value when used correctly. Heading into 2025 with a clear points and miles strategy will ensure travelers continue to get the best value for their money.

The Impact of Overtourism

The post-lockdown travel surge has also brought renewed attention to overtourism, with local governments stepping in to protect their communities. In 2025, popular vacation spots will seek a better balance between the economic benefits and negative community impact, which could mean higher prices and limited availability. For example, Amsterdam, Barcelona, Venice and Bali all added or increased taxes/entry fees in 2024.

Travelers themselves are also unhappy with overcrowded cities and attractions, now looking to travel in the off-season or visit under-the-radar alternatives – known as "destination dupes" – for a better vacation experience:

• 76% of travelers are choosing offseason travel to avoid crowds, according to Virtuoso
• 31% are considering less-touristed destinations for their next vacation

Climate Change is Affecting Travel

In addition to avoiding overcrowded destinations, travelers are also factoring climate change into their plans, whether they know it or not. "Coolcations" are becoming more common during the traditional summer months, especially since the European Union's climate change monitoring service marked 2024 as the warmest Northern Hemisphere summer since records began:

• Travel to Iceland and Finland increased 62% and 150%, respectively, while travel to Greece decreased 17% during peak summer months
• Sweden, Canada, The Netherlands, Denmark and Norway also saw a surge in year-over-year summer demand, according to Virtuoso

However, extended shoulder seasons are still making it possible to comfortably visit dream destinations. Warmer springs and falls are creating longer travel seasons, and the travel industry is responding with additional availability for flights, cruises and hotels – for example, in September and October 2024, Delta Air Lines, United Airlines and American Airlines flew over 50% more seats to Italy than they did during those same months in 2019.

New Government Regulations

While the federal government made some progress in protecting travelers in 2024 – including rolling out stricter refund rules for airlines and introducing the Junk Fee Prevention Act – not all proposed legislation is a win for U.S. travelers.

For instance, the Credit Card Competition Act, which TPG stands firmly against, aims to lower the "swipe fees" merchants pay when customers use a credit card. For context, a portion of these credit card transaction fees goes toward funding reward programs and card perks. If this legislation passes, credit card issuers would likely cut back on benefits they offer to cardholders, from rewards to points programs. This legislation not only has the potential to impact consumers' perks, but it could impact their security and fraud protections. Existing payment networks invest millions of dollars in customer security, so allowing retailers to select newer, cheaper and unproven providers could put their personal information at risk.

Travel Enthusiasm Soars

The industry is no doubt evolving rapidly, but even with so many changes, travelers are as enthusiastic as ever to discover new corners of the globe and get the most value for their money. In 2025, a renewed focus on points, miles and loyalty programs will help consumers experience new destinations, explore their interests and unlock new passions around the world.