Phocuswright’s Travel Forward 2026 report shows a global travel market worth $1.67 trillion in 2025, driven by strong demand despite economic pressures. Asia Pacific leads growth, online bookings hit $1.07 trillion, and OTAs generate $408 billion. AI is rapidly reshaping planning and booking, with 58% of U.S. travelers already using it, while loyalty, corporate travel and luxury continue to evolve.
GLO12 December 2025.
Phocuswright’s Travel Forward: Data, Insights & Trends for 2026 paints a picture of a global travel industry that has moved decisively beyond recovery and into a new phase of structural change. Valued at $1.67 trillion in global gross bookings in 2025, travel remains one of the world’s most resilient consumer sectors, supported by sustained demand for experiences despite inflation, high interest rates and geopolitical uncertainty.
The report highlights how growth is no longer uniform. Instead, it is shaped by regional shifts, accelerating digital adoption, changing traveler behavior and the rapid integration of artificial intelligence across the travel ecosystem.
Global Market: Growth Continues, but the Center Shifts
Global travel bookings are projected to reach $1.67 trillion in 2025, with demand extending beyond pre-pandemic benchmarks. Travel and tourism are expected to generate $11.7 trillion in global GDP, representing roughly 10% of all global spending, and to support nearly 371 million jobs worldwide.
International visitor spending is forecast to rise to a record $2.1 trillion, finally surpassing pre-COVID levels. Asia Pacific leads global growth, while North America and Europe are entering a period of stabilization after two years of strong expansion. Emerging markets in Latin America and the Middle East continue to accelerate from a smaller base, reshaping the global balance of travel demand.
Digital Channels Take the Lead
Online travel bookings are projected to rise 8% in 2025 to $1.07 trillion, reinforcing the long-term shift away from offline channels. Asia Pacific accounts for 36% of global OTA sales, while Europe continues to favor supplier-direct online bookings. North America maintains a more balanced channel mix, and emerging regions are rapidly digitizing.
Online travel agencies are expected to generate $408 billion in bookings in 2025, accounting for about one in four travel dollars globally. The U.S. remains the largest OTA market at $112 billion, followed by China at $60 billion. India stands out as a next-wave growth market, where OTAs already account for 55% of online travel bookings.
Air Travel: Resilient, but Price Sensitive
Global airline bookings are projected to reach $755 billion in 2025, with 50% booked via supplier-direct online channels, 34% offline and 17% through OTAs. However, cost pressures are influencing traveler behavior. In the U.S., 57% of travelers say they are more likely to take road trips due to high airfare, a sentiment shared across all generations.
Ancillary revenue remains critical for airlines, with checked baggage, Wi-Fi, food and beverage, and seat selection among the most commonly purchased add-ons.
Hotels and Short-Term Rentals: A Competitive Balance
Hotel bookings are projected at $589 billion globally in 2025, with 43% still booked offline, underscoring the sector’s slower digital shift compared to air. OTAs dominate hotel distribution with a 36% share, while supplier-direct online bookings account for 21%.
Short-term rentals continue to normalize after rapid pandemic-era growth. Global STR online bookings are nearing $190 billion, with Asia Pacific leading regional growth at 16% year-over-year, followed by Latin America at 15%. In the U.S., STR usage among leisure travelers remains stable at 24%, and 82% of guests compare hotels and rentals before booking.
AI Changes How Travel Is Planned and Booked
Artificial intelligence is rapidly reshaping travel discovery, planning and booking. By the second half of 2025, 58% of U.S. travelers had used AI tools for trip planning or travel experiences. Millennials are the heaviest users, with 58% adopting AI, compared with 45% of Gen Z and 11% of baby boomers.
Traditional search engines are losing influence, dropping from 51% of trip research usage in 2024 to 36% in 2025, while generative AI platforms rose from 6% to 15%. Social networks also gained ground, reinforcing the importance of peer-driven discovery.
Looking ahead, 25–33% of travelers say they are already interested in booking travel directly within an AI platform or letting an AI agent book on their behalf.
Corporate Travel: Policy Meets Personalization
U.S. managed corporate travel is projected to contract slightly in 2025, falling 1% to $141 billion, as large enterprises remain cautious. Still, small and midsize companies, meetings and events continue to support demand.
About 63% of business travelers operate under a managed policy, yet nearly 20% of bookings fall outside policy, often driven by convenience, pricing or loyalty benefits. AI is becoming embedded across the corporate travel lifecycle, from booking and rebooking to expense auditing, with automation expected to accelerate through 2026.
Loyalty, Luxury and Startups Redefine Value
Loyalty is shifting beyond points. Travelers increasingly define loyalty through habitual use, trust and recommendations rather than spend alone. At the same time, luxury travelers — described as “indulgent explorers” — remain a high-value segment, blending digital fluency with a strong reliance on travel advisors for complex, premium itineraries.
On the innovation front, 81% of travel startups are using AI in some form, and 86% report a positive business impact. Funding remains below pandemic-era peaks, but capital is concentrating in fewer, more disciplined companies, with corporate travel and expense technology leading investment in 2025.
Key Takeaways & Numbers at a Glance
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$1.67 trillion: Global travel bookings in 2025
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$11.7 trillion: Travel & tourism contribution to global GDP
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371 million jobs supported by travel worldwide
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$1.07 trillion: Online travel bookings in 2025 (+8% YoY)
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$408 billion: OTA bookings globally in 2025
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$755 billion: Global airline bookings
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57% of U.S. travelers more likely to drive due to airfare costs
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$589 billion: Global hotel bookings
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~$190 billion: Global short-term rental online bookings
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58% of U.S. travelers have used AI for travel
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$141 billion: U.S. corporate travel market in 2025
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81% of travel startups using AI
Travel is growing, but the rules are changing. Digital channels, AI-driven discovery, evolving loyalty expectations and uneven regional growth are redefining how travel is planned, booked and experienced heading into 2026.
Source: Phocuswrtight.
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