US Consumers Expect Holiday Spending Boost, Survey Shows

US consumers expect an increase in holiday spending, with 47% indicating plans to spend more compared to last year. According to a Keybank survey, financial confidence has improved to the highest level since Q2 2021, attributed to the stock market's highs and optimism around Fed rate cuts and benefits from the One Big Beautiful Bill. The top 10% of Americans, who account for 50% of spending, are expected to benefit from this wealth effect.

US consumers are poised to increase their holiday spending, with 47% indicating plans to spend more compared to last year, according to a KeyBank survey. This uptick in spending is attributed to improved financial confidence, which has reached its highest level since Q2 2021. The stock market's highs and optimism around Fed rate cuts, along with benefits from the One Big Beautiful Bill, have contributed to this surge in confidence.

The top 10% of Americans, who account for 50% of total spending, are expected to benefit significantly from the wealth effect. This phenomenon occurs when rising or falling asset values, particularly stocks and home prices, influence consumer spending, even if their income remains unchanged. As of the latest data, the top 10% by household wealth own 72% of financial assets and 63% of homes, which are not far off their peak values REITs And Resorts: 5 Top Picks With 'Wealth Effect' Momentum^[1].

To capture the potential wealth effect momentum, investors can look to high-quality REITs and resort stocks. Host Hotels & Resorts, Inc. (HST) is a notable example, with a Strong Buy Quant Rating and a focus on leisure destinations in top markets. The company's recent earnings call highlighted 19% RevPAR growth at its three Maui resorts and a raised full-year 2025 revenue guidance REITs And Resorts: 5 Top Picks With 'Wealth Effect' Momentum^[1].

Another top pick is Xenia Hotels & Resorts, Inc. (XHR), which invests in uniquely positioned luxury and upscale hotels and resorts. The company's Strong Buy Quant Rating is supported by all five Factor Grades, with earnings growth and revisions leading the way. In its recent earnings call, XHR reported significant increases in revenues and hotel EBITDA compared to the prior year REITs And Resorts: 5 Top Picks With 'Wealth Effect' Momentum^[1].

DiamondRock Hospitality Company (DRH) is another high-quality REIT with a Strong Buy Quant Rating. The company's valuation and growth factors make it an attractive option, with a forward P/FFO of 7.65 compared to the sector median of 12.99. On the recent quarterly earnings call, DiamondRock CEO Jeffrey John Donnelly emphasized the company's focus on driving outsized free cash flow per share growth and recycling out of low free cash flow yield hotels REITs And Resorts: 5 Top Picks With 'Wealth Effect' Momentum^[1].

Howard Hughes Holdings Inc. (HHH) is a housing value play that develops and operates master-planned communities in the U.S. The company's strategic shift and $900 million cash infusion from Bill Ackman's Pershing Square have positioned it well for growth. In its Q2 earnings call, HHH reported strong results across master planned communities, operating assets, and strategic developments REITs And Resorts: 5 Top Picks With 'Wealth Effect' Momentum^[1].

Melco Resorts & Entertainment Limited (MLCO) is a top pick outside the U.S., with a Strong Buy Quant Rating. The company's recent performance in the Macau casino sector has been notable, with expectations for strong visitor numbers during the Macau Golden Week. The NBA's China games for the 2025 preseason are also anticipated to boost tourism to Macau REITs And Resorts: 5 Top Picks With 'Wealth Effect' Momentum^[1].

In conclusion, REITs and resorts can capture wealth effect momentum as affluent consumers continue their spending. The top 10% of Americans, who account for 50% of spending, are expected to benefit from the wealth effect, driven by rising asset values and improved financial confidence.