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The U.S. car rental market is stabilizing. That doesn’t mean smooth.
The U.S. car rental market held its ground in 2025, but the path to get there was anything but clean. Phocuswright's newly released U.S. Car Rental Market Brief 2026 breaks down exactly what pressured the segment last year, where the recovery is taking shape and what structural shifts are quietly reshaping how cars get rented in America. International demand left a mark. Airport locations generate the bulk of revenue for the major operators, which made 2025's inbound...
Japan inbound boom becomes policy priority
Japan's travel market posted US$94.2 billion in gross bookings in 2025, an 8% gain and the clearest sign yet that the country's post-pandemic recovery is real. For the first time in years, the yen wasn't distorting the numbers: a strengthened currency meant the growth was genuine. But the more important story is structural. Inbound arrivals hit a record 42.7 million. Outbound travel sat at 14.7 million. Japan flipped from an outbound-heavy market a decade ago and hasn't looked back. Now,...
U.K. travel distribution has found its equilibrium. Will it stay that way?
Growth is not the same as winning. U.K. OTA gross bookings hit £10.3 billion in 2025, a record. OTA market share fell anyway. For the third consecutive year. But here's what that headline misses: supplier-direct share is barely moving either, inching from 78% to a projected 81% by 2029. The U.K. distribution battle isn't being won. It's being settled. Channels are locking into fixed positions, with one notable exception: hotels, where OTAs still...
Wellness tourism hits $894B and the real growth is still ahead
Wellness tourism has doubled in size over the past decade, reaching US$894 billion in 2024 and it's on track to hit $1.4 trillion by 2029. But the more telling story isn't the scale. It's the shift. Travelers aren'tbooking wellness as an occasional indulgence; they're building it into every trip, budgeting for it even when they cut back elsewhere, and traveling hours to access it. From geothermal destinations to...
Spain’s surge signals a structural shift in global travel demand
Spain’s travel market remained one of Europe’s strongest performers in 2025, with international arrivals totaling a record 96.8 million and gross bookings reaching nearly €39 billion. Growth has been supported by Spain’s steady momentum as well as redirected demand from travelers seeking alternatives amid geopolitical disruption in the Middle East. Hotels reported record revenue and the market saw notable developments across rail, aviation and online travel distribution....
Three things to know about the Italy travel market
Italy’s travel market continues to gain momentum, reaching €30 billion in gross bookings in 2025, up 4.5% year over year as inbound demand hits new highs. Digital channels are driving much of this growth, with online bookings now making up 58% of the market and mobile leading the way. Strength spans every major segment, from hotels and airlines to rail, all evolving alongside shifting traveler behavior. Even amid geopolitical uncertainty, Italy’s broad appeal and ongoing digital transformation...
Non-negotiables for indulgent travelers and what makes premium worth it
What defines a truly premium trip today? For indulgent travelers, it starts with the basics but quickly moves beyond them. Safety, security and high-quality food and beverage are expected, not differentiators. The real value emerges in privacy, well-being and exceptional service that feels personal without being intrusive. Yet expectations vary by generation, from boomers seeking effortless, all-inclusive experiences to millennials and Gen Z prioritizing...
South Africa’s tourism reset: Infrastructure, fintech and regional strength set the stage for growth
South Africa is a market of contrasts: a youthful, mobile-first population and improving payments infrastructure sit alongside persistent constraints around infrastructure reliability, cost pressure and perceptions of safety. On the demand side, a widening “volume-value” gap in domestic travel and a resilient inbound base is driven heavily by regional visitors, even as long-haul recovery remains uneven. Layered on top are emerging AI signals—from tourism-board...
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Phocuswright Research Roundup 1Q26
Across a diverse set of first-quarter research, Phocuswright examined the forces reshaping travel from the consumer to the core of the industry.
Decoding the indulgent explorer: What drives today’s premium travel decisions
Indulgent explorers are a small, high-value traveler segment, defined by behavior, not just affluence.
Chinese OTAs deploy AI for big global push
China’s OTA wars have always been intense. Now they’re getting a new accelerant: AI that doesn’t just recommend trips, but reshapes how travelers search, decide, book and pay—often without a traditional “search box” at all. Major Chinese intermediaries are pairing a protected home market and fierce domestic competition with a more disciplined global expansion strategy, while inbound travel policy shifts add a third growth pillar alongside domestic and outbound. The result is a fast-evolving...
Ten structural shifts redefining Asia Pacific travel
Asia Pacific travel is no longer moving in a single direction. Demographic divergence, geopolitical tension, capital discipline, infrastructure expansion and digital finance are reshaping how demand forms, where travelers go and how value is captured. The region now contains multiple, seemingly polarly opposite bands of consumers. The region simultaneously portrays a mosaic of digitally advanced ecosystems and politically sensitive corridors, where mobility and traveler trends can shift...
The fastest shift in travel behavior just became the default
AI has cleared the majority mark in U.S. leisure travel: 56% of travelers report using it for travel, signaling a shift from novelty to default planning behavior. Gen AI is becoming a major discovery starting point, but it still tends to send travelers onward rather than replace other sources.That momentum is running into a trust gap. A minority say they place significant trust in AI-generated results, even as many users report it boosts confidence and saves time. For the U.S. traveler, the next...
The two operational priorities that define AI success
Traveler readiness for agent-led booking is no longer theoretical. As of spring 2025, around a quarter to a third of travelers across the U.S. and Europe were expressing interest in booking travel using AI agents either inside an AI platform or letting an AI assistant (e.g., via an agentic browser like ChatGPT's Atlas) book for them on the web. Phocuswright is tracking this trend and will publish updated numbers by 2Q26.
Is Gen Z really disloyal?
Is Gen Z really disloyal, or are brands misreading what loyalty looks like today? New research from Phocuswright reveals that younger travelers are highly engaged in loyalty programs, but they prioritize novelty, flexibility and value over repeat bookings with a single provider.
Travel’s third-largest sector faces its defining decade
Experiences have been labeled travel’s “next big opportunity” for years. Now they are delivering. After suffering the deepest pandemic decline of any major segment, tours, activities and attractions have rebounded past pre-COVID levels and are growing faster than travel overall.
Canada’s travel advisor market holds steady as costs rise and tech evolves
Despite inflationary pressure and geopolitical uncertainty, Canada’s travel advisor landscape remains stable and strongly relationship-driven. The advisor workforce is seasoned and mostly female, with nearly half working as home-based independents, reflecting a highly entrepreneurial segment supported by deep industry experience. While cost pressures, air disruption and supplier competition continue to challenge the channel, most advisors remain optimistic about the future.
Report Preview: Phocuswright's Travel Innovation and Technology Trends 2026
The Agentic AI Revolution Is Here
61% of travel business surveyed experimenting with or scaling agentic AI
All indications are that 2026 will be the year of agentic AI, succinctly defined as gen AI that can accomplish real-world tasks rather than simply outputting content. Agentic AI is already playing a key role in next-generation automation within companies, increasing productivity and reducing costs. According to Phocuswright’s latest research report Budgets, Barriers and the Race to Agentic AI, more than 60% of travel businesses surveyed 4are experimenting with or scaling agentic AI, with 6%...
Four signals from the front lines of AI investment
In this study, we take the pulse of gen AI adoption. We asked senior travel executives how they are budgeting for technology, where gen and agentic AI is in use today, what’s blocking them from going further and what their outlook is for the future.
Travelers love points, but how ‘bout brands?
Loyalty programs have evolved from simple retention tools into a rewards sub-economy where airlines, hotels, intermediaries and financial institutions strike massive deals, and travelers increasingly optimize points and perks to stretch tight budgets. New Phocuswright research finds that 84% of U.S. leisure travelers participated in at least one “gaming” behavior in the past 12 months, from status runs and mattress stays to gift-card point harvesting and welcome-bonus chasing, highlighting a gap...
The advisor advantage
While younger travelers often choose their booking channel based on price, advisors indicate that only 2% of their clients book with them because they offer the best price. Instead, advisors say personal relationships, customer service and their knowledge of travel products and destinations are most important to attracting travelers.
26 data-driven insights to make your organization smarter
Is your team searching for data-driven insights to identify emerging trends and seize new opportunities faster? Get straight to the latest projections, consumer behavior signals and digital adoption dynamics that should be top of mind for travel executives.
Phocuswright Research Roundup 2H25
Across 33 reports published in the second half of 2025, Phocuswright explored how global travel is evolving in real time. Market sizing across APAC, the Americas, Europe and the Middle East reveals where growth is concentrating, while consumer research exposes shifting expectations around value, loyalty and how trips are discovered and booked. At the same time, deep dives into AI, fintech and digital identity show how the foundations of travel commerce are being rebuilt.
What Japan travel looks like after the comeback
Japan’s travel market has entered a more complex phase. Inbound demand is surging, gross bookings are rising and Japan’s role in global travel is expanding, but growth is now colliding with sustainability, infrastructure and policy realities. The country is shifting from attracting visitors to actively managing them, with real consequences for destinations, travelers and the industry at large. At the same time, aviation expansion is reinforcing Japan’s position as a critical global hub and...
Playing favorites
Loyalty programs can certainly incentivize travelers to return to brands that they already respect, but many of the core elements of a traveler's go-to brand(s) are business fundamentals that are completely independent of points schemes. Programs show up among the top few reasons why a brand became a favorite but do not supersede other important attributes like pricing, convenience or location. Travel brands may still see important ROI from developing their loyalty schemes provided other important...
Novelty and loyalty at odds
Gen Z is especially more likely (47%) to identify with the statement "I will choose a new travel provider over one I have had a positive experience with before for the sake of experimenting with something new." This view becomes distinctly less common among older generations with a particular drop-off between Gen X (32%) and boomers and the Silent Generation (13%). With less travel experience overall, Gen Z may approach the brand selection process with more openness and curiosity to understand...
Travel Forward: Data, Insights and Trends for 2026
Phocuswright's Travel Forward: Data, Insights and Trends for 2026, sponsored by Travel Guard, provides broadscale insights into the $1.6 trillion global travel market, offering essential data for understanding industry trends and growth.
The state of travel startup funding
Though the current levels of funding through 3Q25 hint that the year will wind up hitting another new low, there are a few reasons for positivity in outlook: The U.S. enacted an interest rate cut in September 2025, there are signs of life in the M&A market and the uncertainty around tariffs and trade appears to be lifting. Valuations and the overall funding cycle are also resetting. As Cara Whitehill, vice president at Thayer Investment Partners said for PhocusWire’s list of Top Investors in...
Search slips, AI surges
Generative AI is fast becoming travel’s new front door. Nearly 40% of U.S. travelers used gen AI tools to plan trips in 2025, an 11-point jump in just one year. Millennials lead the charge, employing AI to cut through information overload while still turning to friends, family and reviews for final validation. Overall, differences persist between demographic groups: Travelers who use AI are younger, wealthier and more frequent travelers who spend significantly more and rely on both digital and...
Beyond points: Rethinking loyalty and brand consistency
Hope isn't lost in the endeavor to increase brand consistency, but travel companies may need to rethink how they define loyalty and whether the definitions that they reward are really the ones that travelers embrace. Leisure travelers believe the biggest displays of loyalty are usage over an extended period of time, using a brand whenever they're able (even if they don't travel very frequently) and evangelizing the brand when given opportunity. In contrast, many incentives on the program side...
The supplier shift powering Latin America’s travel growth
Latin America’s travel industry proved remarkably resilient in 2024, generating US$67.9 billion in gross bookings despite uneven macro conditions. According to Phocuswright’s Latin America Travel Market Report 2025, the region is poised for a 17% rebound this year, reaching a record $79.2 billion. Digitalization has crossed a critical threshold, with more than half of all bookings expected to occur online in 2025. Airlines are setting new passenger records, hotel pipelines are reactivating and...
The AI-native edge
For founders, AI represents both opportunity and risk. It lowers barriers to entry, enabling young companies to reach revenue faster, but also flooding the market with competitors. For investors, it demands sharper discipline than ever, including separating sustainable growth from froth, rewarding business models that will solve real problems for years to come and looking ahead in an exit environment that is still constrained.
From $1.6T to $1.8T: How global travel will grow, shift and digitize by 2027
Forces point to steady but uneven expansion, with global gross bookings projected to grow an average of 5.2% annually through 2027. Travelers are proving they will keep moving, even in uncertain times, yet they’re also making sharper, more deliberate choices about where, how, and why they travel. The industry’s challenge — and opportunity — lies in adapting quickly enough to capture this next phase of growth.
When travel isn’t first: How economic strains are changing consumer behavior
While travel incidence held steady in 2025, spending has tightened as Americans weigh travel against competing financial priorities. Younger travelers, now the largest share of the market, are more cost-conscious, leaning into tools and products that clearly showcase value. In this environment, price transparency, credible comparisons and flexible digital tools have become the new currencies of loyalty. Players who can prove value will win.
Momentum and bottlenecks: India’s aviation in focus
India’s travel market is accelerating at a pace few global sectors can match. Gross bookings climbed 11% in 2024 to $41.5 billion, fueled by domestic demand, rising discretionary spend and infrastructure gains. Online penetration reached 56%, with OTAs and suppliers racing to capture growth in a rapidly digitalizing economy. Airlines and hotels are expanding aggressively despite capacity and supply bottlenecks, while rail modernization and a fast-growing car rental sector add new momentum. With...
The five developments driving the evolution of U.S. OTAs
Amid cooling domestic demand, U.S. online travel agencies are adapting to a more competitive and uncertain landscape. With hotel bookings softening and high-income travelers booking elsewhere, OTAs are investing in loyalty, AI and B2B partnerships to stay relevant. Expedia and Booking remain dominant, but upstarts like Hopper and new agentic AI tools are reshaping how travelers discover and book trips. Dynamic packaging, private rentals and international expansion offer new growth paths, but the...
7 powerful shifts driving the Middle East’s travel boom
The Middle East has emerged as one of the fastest-growing travel markets globally, supported by proactive government tourism strategies, mega-events and investments in infrastructure. By 2024, the market had not only recovered but exceeded pre-pandemic levels by 23%, with total gross bookings reaching US$101.2 billion. This impressive recovery is projected to continue, potentially reaching $135.7 billion in total gross bookings by the end of the forecast period.
$407B by 2028? The numbers behind U.S. corporate travel’s new trajectory
Business travel is entering a new era, shaped by the convergence of technological innovation, shifting consumer behaviors, and the evolving demands of the modern workplace. As organizations adapt to global economic challenges and a rapidly transforming travel industry, the managed corporate travel sector stands at a pivotal crossroads, balancing resilience with reinvention.
Phocuswright's Travel Innovation and Technology Trends 2025
The most significant innovation trends in travel technology and distribution for 2025 and beyond.
Growth without lift in China’s $151.8B travel market
China’s travel market is full of contradictions. Demand is surging, yet deflation and shaky consumer confidence are slowing momentum. There’s growth, but not at full strength. The market reached $151.8 billion in 2024, yet oversupply, deflation, weak consumer confidence and income insecurity continue to hold back greater traction. Even so, OTAs are surging, rail and car rental are thriving, and outbound travel is on track to surpass 2019 levels in 2025.
ANZ travel market outlook: Growth fueled by prices, not passengers
The ANZ travel market offers opportunity, but not without challenges. Growth is real, but it is being shaped by price dynamics, shifting distribution power, and uneven segment recovery. Travel leaders must adapt by targeting high-value customers, reinforcing direct and retail distribution, and aligning investments with the strongest-performing sectors—most notably airlines.
Looking ahead: U.S. OTAs bet on loyalty, AI and B2B
The U.S. OTA market may be plateauing, but the next wave of growth is already taking shape. According to U.S. Online Travel Agency Market Essentials 2025, OTAs are betting big on new strategies to stay ahead.
Three charts that reveal how digital sources shape destination decisions
From inspiration to booking, today’s travelers follow a winding and increasingly digital path. New research reveals which online sources have the greatest sway when travelers choose their next destination and how those influences shift by region and generation. Three key charts tell the story and could reshape how you reach your audience.
Intra-European travel leads 2025’s revenue gains
Travel bookings hit €347B in 2024 but cost pressures, sustainability fees, and uneven recovery could reshape the market.