SHawker,
Great gesture, but I might suggest something else. Save the watch for when you guys can afford what he wants. In reality, all aircraft have a clock in them. Private pilots like all the gadgets---it is my experience that most commercial pilots could care less for a watch---I do not even own one, (apart from the one on page 5 of this thread). Once he moves on from instructing he probably only use the watch to determine how many more hours till dinner time/bar time/home time etc. For IFR he will use the aircraft clock, if he goes utility, he will land when done--time is relative.
Just to throw this out there...why not get him a good travel bag. He will no doubt end up with a job where is away from home at some point. I just got one of these:
Rolling Duffle
Best bag I ever took on the road with me so far. So where does he instruct... Bountiful? Was just thru there a few weeks back.