Phocuswright’s latest “Travel Forward: Data, Insights & Trends for 2026” positions the global travel economy as firmly back on a growth track, with 2025 gross bookings projected to reach US$1.67 trillion, even as the post-rebound surge of 2023–24 normalises into steadier expansion.
The report argues that, despite inflation, interest-rate pressure and geopolitical volatility, travellers continue to prioritise experiences, keeping both leisure and corporate demand resilient across most regions.
That recovery, however, is uneven and increasingly shaped by where growth is coming from. Phocuswright points to Asia Pacific as the pace-setter for outbound momentum, while North America and Europe stabilise after two years of expansion and emerging markets accelerate from a smaller base. The changing balance is clear in country-level sizing: the U.S. remains the world’s largest travel market at US$506.8 billion in 2025, but growth is stronger across parts of APAC and in several emerging economies.
A central theme running through the data is the continued shift to digital purchasing. Online bookings are projected to rise 8% in 2025 to US$1.07 trillion, with Phocuswright highlighting accelerating digital adoption worldwide and noting that APAC accounts for a sizeable share of global OTA sales while Europe remains strong in supplier-direct online bookings. This widening online footprint is now the baseline for 2026 strategies, from performance marketing to product design.
Intermediaries remain powerful, particularly where lodging drives margin. Phocuswright projects online travel agencies will generate US$408 billion in bookings in 2025 around one in four travel dollars globally, while emphasising that OTA influence varies sharply by category, with dominance in lodging and a more modest role in air. The report also underlines how concentrated the OTA landscape remains: the U.S. is projected at roughly US$112 billion in OTA gross bookings (about 27% of global OTA value), followed by China at US$60 billion, with Japan, Germany and India rounding out the top five. In India, OTAs are already cited as representing 55% of the country’s online gross bookings, reflecting the rise of “superapp” models bundling travel with financial and lifestyle services.
Short-term rentals are entering what Phocuswright frames as a more professional, operationally complex phase. It describes a sector where online bookings are nearing US$190 billion in 2025, multi-listing is now standard practice (with the average host listing across 2.9 marketplaces), and operational tooling has become mainstream, including widespread use of property management systems. The report also points to significant AI uptake among hosts for practical business functions such as pricing, messaging and analytics, suggesting that competitive advantage in rentals is increasingly tied to technology maturity and operational scale rather than simply supply growth.
If there is one “most consequential” trend for 2026, Phocuswright makes a strong case for AI moving from novelty to infrastructure. In the U.S., it reports that 58% of active travellers use AI for something and 39% use it specifically for travel, with adoption in the U.K. also surpassing one in five travellers. Importantly, it finds the heaviest trip-planning use among time-poor millennials (58%), reinforcing the idea that AI’s early mass value lies in efficiency reducing search friction and compressing decision time rather than purely in inspiration.
This behavioural change is already reshaping the discovery funnel. Phocuswright notes that search engines are losing share as a trip-research starting point (falling from 51% in late 2024 to 36% by the second half of 2025), while generative AI platforms rise (from 6% to 15%) and social networks edge up as travellers seek peer-authentic signals. It also highlights the marketing implications of “zero-click” behaviour, arguing that the new competitive target is not simply ranking, but being cited inside AI-assembled answers pushing travel brands towards structured, verified and machine-readable content.
Phocuswright then extends this beyond planning into transaction, pointing to the convergence of AI with digital identity. With digital ID wallets expected to hold verified credentials, payment details and preferences, the report argues that agent-driven, one-click booking becomes more feasible at scale and cites a projection of half a billion smartphone users having a digital ID wallet by 2026. For suppliers and platforms, the implication is clear: readiness for “agentic” traffic will depend on clean data, modern feeds and systems that can support automated reasoning and fulfilment without degrading trust.
Loyalty and luxury are positioned as the commercial accelerants of this next phase. Phocuswright says travellers are joining more programmes and redeeming more often, but are redefining loyalty around flexibility, recognition and “real-world” value rather than points alone creating a gap between stated preference and actual behaviour as travellers keep options open based on trip context. In the premium segment, it describes “indulgent explorers” as a relatively small cohort with outsized economic impact, combining digital fluency with a strong reliance on trusted expertise reinforcing the enduring role of travel advisors in high-value, complex itineraries even as tech platforms improve.
Corporate travel, meanwhile, is portrayed as a proving ground for policy-led personalisation and automation. Phocuswright reports the U.S. managed segment was projected to contract slightly in 2025 (down 1% to US$141 billion) as large-enterprise demand remains cautious, but suggests growth should normalise in 2026. It also describes a tightening environment 63% of business travellers operating under a managed policy, a recent trend towards more restrictive rules, and nearly 20% of bookings still falling outside policy alongside rapid AI adoption for booking support and back-office functions such as receipt auditing and expense review.
Finally, the startup outlook for 2026 is defined by a funding reset rather than a hype cycle. Phocuswright notes that funding has slumped to decade lows, yet AI is now near-universal in startup operations: 81% are using AI in a meaningful form and 86% report positive business impact, with speed of prototyping and product development standing out. Investor appetite, the report suggests, is concentrating around infrastructure and efficiency plays particularly corporate travel and expense rather than pure consumer growth narratives.