Holiday Season: A Global Spending Machine

Christmas shopping crowds at a mall in Strasbourg. (AFP)

Holidays are no longer just social or religious occasions; they have become one of the most regular and impactful economic phenomena worldwide. The Christmas and New Year period represents a concentrated seasonal demand shock, during which consumer behavior, supply chains, labor markets, and even pricing and investment decisions are reprogrammed. Within a few weeks, hundreds of billions of dollars flow into retail, travel, hospitality, and e-commerce sectors, creating an intense economic scene unmatched at any other time of the year.

Globally, data from recent Christmas and New Year seasons indicate that spending volumes have reached unprecedented levels. In the United States alone, holiday season spending surpassed the trillion-dollar mark for the first time, with an average individual expenditure of about $890 covering gifts, food, decorations, and travel. Notably, e-commerce has become the fastest-growing driver, with annual increases ranging between seven and nine percent, compared to slower growth in traditional stores. These figures reflect a structural rather than temporary shift, as the "time pressure" on year-end purchases raises the value of speed, reliability, and logistics services, amplifying profits for those capable of fast delivery.

Economically, the importance of the Christmas and New Year season lies not only in increasing spending but also in concentrating it within a short time frame. This pressure raises demand for temporary labor, increases storage and financing costs, and makes any disruption in supply chains extremely costly. Additionally, a significant portion of this spending is financed through credit, making the season a real test of household budgets and their ability to bear high interest rates, especially in environments experiencing inflation or monetary tightening.

However, the real difference emerges when moving to the Middle East and North Africa. Here, the holiday season does not operate solely according to the traditional Western model based on households and gifts but also, especially New Year's, transforms into a distinctive tourism and experiential economy. In the Gulf countries, the end of the year marks the peak of the tourist season. For example, the United Arab Emirates recorded hotel occupancy rates close to 79 percent during the early months of 2025, with an average room price increase of about six percent. At such occupancy levels, New Year's days become an exceptional source of profit, with raised prices and imposed minimum stay durations, doubling returns within a narrow time window.

In Saudi Arabia, the model appears different but no less intense. The seasonal economy here is driven by the "events economy" and domestic tourism. In the first quarter of 2025 alone, international visitor spending exceeded 49 billion riyals ($13 billion), marking about 10 percent year-on-year growth, with a clear surplus in the travel balance. Major events and entertainment seasons turn the year-end into a demand driver, directly impacting hospitality, restaurants, transportation, and electronic payments sectors.

Meanwhile, in Levant and North African countries where Christmas has a broader cultural presence, the economic impact depends on other factors: purchasing power, monetary stability, and expatriate remittances. In Lebanon, for example, aircraft occupancy rates during the holiday period reach about 90 percent, reflecting the role of expatriates in driving seasonal demand. However, this impact remains limited due to a decline in overall visitor numbers and a shrinking contribution of tourism to GDP compared to previous years.

In conclusion, Christmas and New Year are no longer just a consumer season but an intense economic test. In the West, they test consumer confidence and credit. In the Gulf, they represent the peak of an economic model based on tourism and events. In more fragile countries, they are a brief window in which economies catch their breath. In all cases, the holidays reveal a simple truth: when time meets demand, a few days become more valuable than long months.