Will expensive flights send holiday dollars to the mall?

What happened

Bank of America says higher airfares could reduce holiday travel this year. The bank suggests people who skip or cut back on trips might spend that money on shopping instead. Its card data show holiday retail spending runs well above the yearly average.

Confirmed

Global impact / market context

Holiday shopping is a crucial period for retailers because sales then run far above other times of the year. If expensive flights push some travel budgets toward stores, retailers could gain sales while airlines and travel businesses lose them.

Analyst inference

Card data show retail spending excluding autos was about 18% above its yearly average in the five weeks ending December 24 across 2023 to 2025. Spending peaked near 30% above average in the final week, while the July 4 bump was only about 5%.

Analyst inference

What to watch

1. Watch Bank of America's card data for whether holiday retail spending again runs well above the yearly average, as it did in the five weeks ending December 24 in 2023 to 2025. Confirmed
2. Watch whether airlines discount fares or add capacity if higher ticket prices weaken holiday travel demand, since cheaper fares could pull spending back toward trips. Proposed
3. Watch retailer comments on holiday sales for signs that skipped travel budgets are moving into stores, which would support retail revenue but weigh on travel-related businesses. Analyst inference

Evidence

• Original source link unavailable