The state of the market

Global travel growth has normalized.

Global gross bookings reached approximately $1.67 trillion, signaling continued growth but at a more measured pace as the market matures. Travel & tourism is on track to generate more than $11.7 trillion in global GDP in 2025, accounting for roughly one in every 10 dollars spent worldwide, and supporting nearly 371 million jobs.

Demand remains resilient under pressure.

Despite inflation and geopolitical uncertainty, travel spending continues to rise, reflecting sustained consumer prioritization of travel. Yet the rebound remains uneven: North America and Europe are stabilizing after two years of expansion, Asia Pacific continues to lead global growth and emerging markets in Latin America and the Middle East are accelerating from a smaller base.

Asia Pacific remains the growth engine. 

APAC continues to lead global travel growth, accounting for the largest share of incremental bookings entering 2026. APAC also leads online growth, accounting for 36% of all OTA sales.

Emerging regions are gaining influence. 

Latin America and the Middle East are growing faster than mature markets, increasing their share of global travel spend. 

Global and Regional Gross Travel Bookings, 2022-2026

Regional Share of Global Travel Bookings by Channel, 2025 (OTA, Supplier-Direct Online, Offline)

How travelers plan and book

Online bookings continue to outpace the total market. 

Digital travel adoption accelerates worldwide: Online travel bookings surpassed $1 trillion, growing faster than offline channels across all major regions.

Digital adoption is deepest in fast-growing markets. 

Asia Pacific now accounts for over one-third of global OTA sales, reflecting rapid digital penetration. Emerging regions such as Latin America and the Middle East are expanding rapidly, underscoring how digitalization is reshaping the global travel marketplace.

Search is no longer the singular entry point. 

Travel has seen disruption before—the rise of the web, mobile, social media and the sharing economy—but what’s happening now feels bigger. This is the beginning of the era of autonomous agents.

Enabled by generative AI and digital identity, these platforms increasingly support planning, negotiate, purchase and personalize on behalf of travelers and businesses.

The share of travelers starting trip planning with traditional search has declined sharply year over year. 

Social platforms play a growing role in trip research. 

The rise of social networks is particularly telling. While Gen Z hasn’t fully embraced generative AI, they are highly active on social platforms, using them at rates comparable to general search engines. This points to a preference for peer-authentic voices over algorithmic recommendations. Across markets, social network usage for trip research is climbing: In the U.S., it rose from 16% in 2023 to 19% in 2025, with similar upward trends in the U.K. and Germany.

AI has entered the mainstream.

58% of active U.S. travelers report using AI for at least one purpose, marking a shift from novelty to normalcy. 

Travel planning is AI’s primary use case. 

39% of travelers have used AI specifically for travel research or planning. 

Interest in AI booking is growing faster than adoption. 

Between 25–33% of travelers express interest in AI-enabled booking tools, though transactional use remains early. 

Digital identity is critical to AI-driven commerce. 

Hundreds of millions of travelers are expected to adopt digital identity wallets by 2026, enabling more secure and automated booking experiences.  

Key Online Resources Used by U.S. Travelers to Research and Select Travel Components, 2H23-2H25

Use of Social Networks in Trip Planning

U.S. Travelers Who Used AI to Research and Plan Trips, by Generation, 2H25

Distribution and competition

OTAs remain central to global travel distribution. 

OTAs generated approximately $408 billion in gross bookings, maintaining a dominant role despite supplier pushback. OTAs’ power remains deeply asymmetric across categories: dominant in lodging, modest in air and far less significant in cruise and rail. While suppliers have reclaimed parts of the online channel post-pandemic, intermediaries continue to command the hotel segment—the cornerstone of OTA profitability.

OTA penetration varies dramatically by market. 

In India, OTAs account for more than half of all online travel bookings, far exceeding mature markets. The U.S. continues to anchor the OTA landscape with roughly $112 billion in projected 2025 gross bookings—about 27% of global OTA value—driven by platform maturity, deep loyalty ecosystems and a strong mix of hotel and air transactions.

Direct bookings are holding steady in North America and Europe. 

Supplier-direct channels continue to outperform OTAs in select mature markets through loyalty and app-based engagement. 

Global Online Bookings (US$B) by Channel, 2022-2026

2025 OTA Bookings (US$B) and Share (%) by Region

Accommodation competition is fully cross-category. 

Hotels and short-term rentals increasingly compete for the same traveler within the same booking journey. 82% of STR guests compare hotels and rentals when shopping; the most common booking channel is STR marketplaces (61%), with OTAs a distant second (12%).

Consumer behavior and loyalty 

Travel loyalty is increasingly situational. 

Loyalty entered a new phase in 2025, as travelers now join more programs, redeem more often and expect brands to compete on flexibility, recognition and real-world value rather than on points alone. Travelers maintain multiple preferred brands rather than relying on a single primary provider. Travelers often keep multiple options in play, shifting between brands and channels depending on trip type, timing or perceived value. This dynamic appears clearly when we look at how often people actually rely on a single “go-to” choice.

Trust matters more than rewards alone. 

Repeat booking behavior correlates more strongly with familiarity and reliability than with points accumulation. Recommendations play a meaningful role, illustrating that loyalty increasingly reflects advocacy, not just frequency. As programs evolve, these expectations push brands to demonstrate value in ways that matter to everyday travelers rather than simply rewarding the highest spenders.

Ways Travelers Define Travel Loyalty, Overall and by Generation

High-value travelers drive outsized impact. 

Luxury and “indulgent explorer” segments represent a disproportionate share of total travel spend. They lean into premium experiences, rely heavily on trusted expertise and expect a level of personalization that moves beyond standard elite benefits. At the same time, they prize variety and seek out new destinations, creating a tension between their desire for recognition and their appetite for discovery. Understanding how these travelers choose, book and evaluate experiences is central to capturing growth in the year ahead.

Indulgent explorers want to see the world and are taking the time to do it

Luxury travelers blend digital tools with expert help.

High-spend travelers actively use digital platforms while still relying on human expertise for complex trips. Indulgent explorers frequently turn to travel advisors to navigate complex itineraries, secure premium inventory and ensure a seamless planning experience. Their reliance on professional support highlights a core truth about luxury travel: When expectations rise, trusted expertise matters as much as convenience. Advisors remain integral to this segment’s decision-making and booking patterns.

Offline resources have greater appeal for indulgent explorers

Corporate travel and operations 

Corporate travel policies remain widely used. 

After years of recovery, U.S. corporate travel is redefining itself—balancing control and autonomy, compliance and convenience. The managed segment was projected to contract slightly in 2025, falling 1% to $141 billion. Small and midsize firms, meetings and events are sustaining momentum while large-enterprise demand remains cautious. Still, growth is projected to normalize in 2026. Approximately 63% of business travelers book within managed travel programs. 

Out-of-policy booking persists.

Travel managers are tightening rules while giving travelers more say. About 63% of business travelers operate under a managed policy, and one in four companies have recently made their policies more restrictive. Yet compliance isn’t universal; nearly 20% of bookings fall outside policy, mainly for convenience, lower prices or loyalty perks.

AI is reshaping corporate travel behind the scenes. 

Artificial intelligence has become the quiet disruptor behind every itinerary. More than half of business travelers use AI for travel, from inspiration to booking and rebooking. Booking tools are integrating AI for real-time support, while finance platforms use it to audit receipts and flag anomalies.

U.S. Corporate Travel Market Gross Bookings (US$M) and YoY Change (%), 2024-2026

Generative AI Uses Among Business Travelers

Technology, startup investment and execution 

AI is now table stakes for travel startups.

Only 5% of travel startups don’t currently use AI and have no plans for it. Overall, 81% of travel startups are using it in some meaningful form. Almost two thirds are using AI internally for productivity, a little over half for content creation, and half have integrated it into the core product or user experience for their customers.

Travel Startups Current Uses of Gen AI

AI delivers measurable value. 

The majority of companies using AI report positive impacts on efficiency, decision-making or customer experience. 86% report positive impact of AI on their business. The positive impact is most notable for faster product development and prototyping. A full third ranked those as the top positive impact.

2026 is about execution, not experimentation. 

With funding tighter than in prior years, companies that demonstrate clear unit economics and scalable use of data are best positioned to win.  Investors are prioritizing evidence of operating leverage and repeatable demand over headline growth.

Areas of Impact of Gen AI

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