US Travel in 2026: From Turbulence to Tailwinds?

After a few years of volatility, the US travel sector is set to be returning to more familiar patterns. The post-pandemic surge has faded into memory and 2025 served as a reminder that travel turbulence comes in many shapes and sizes. Despite this, the medium-term is promising – through 2026 and onwards, travel is set to return to structurally attractive long-term growth, underpinned by enduring demand tailwinds, clear category hotspots and rapidly evolving business models shaped by AI.

For travel operators, the question is not whether demand will return to growth, but where growth will come from, and how strategies must adapt to capture it.

Travel in 2025

Following a strong rebound from Covid, 2025 marked a clear slowdown for US travel. Overall market growth moderated to around 1–2%, with domestic and inbound travel experiencing the sharpest pressure. Industry data shows that domestic air passenger volumes flattened and inbound international travel declined in all but two months of the year, while outbound travel slowed but proved comparatively resilient.

The softness in air travel flowed across multiple sectors. US hotel chains saw occupancy decline through 2025, with only modest ADR increases, resulting in subdued RevPAR growth. Experience providers and tour operators also felt the impact, with many reporting flat or declining engagement and softer booking momentum.

Crucially, this downturn was not driven by a loss of consumer appetite for travel. On the contrary, it reflected a spike in macroeconomic and geopolitical uncertainty. Tariff announcements and trade tensions pushed economic policy uncertainty to record levels in the first half of the year, while stock market volatility and a slowing job market made consumers more cautious about discretionary spend. Consumers postponed trips, shortened or traded down, rather than abandoning travel altogether.

Why the fundamentals still point to growth

Despite the turbulence of 2025, the structural case for travel remains intact. Multiple forecasts anticipate US travel spending growth of approximately 3–6% per annum between 2025 and 2028, broadly in line with pre-Covid trends.

This confidence is rooted in long-term behavioral shifts that continue to favor travel. Consumers are still reallocating spend from goods to experiences, with travel retaining a privileged position as a source of enrichment and with increased stickiness and resilience post-pandemic. Premiumization remains a powerful force, as travelers increasingly “trade up” during their trips with upgrades and more immersive and exclusive off-the-beaten-track activities. At the same time, the persistence of remote and hybrid working continues to support blended leisure and business travel, enabling more frequent and longer stays.

Rather than reversing, these trends merely slowed in 2025. As macro conditions stabilize, they are expected to reassert themselves from 2026 onwards.

Travel Growth will be uneven: clear winners are emerging

While the overall outlook is positive, performance across the travel value chain continues to diverge sharply. Certain categories are structurally better positioned to outperform.

Cruise is a standout example. Even through the 2025 slowdown, cruise operators continued to grow ahead of the broader market. With only around 5% of Americans cruising each year, compared with more than 80% taking leisure trips overall, penetration remains structurally low despite a strong value proposition compared to land-based trips. Cruise accounts for just 2–3% of total travel spend, leaving significant headroom for expansion. High repeat rates, strong value propositions versus land-based travel and growing appeal to multi-generational families all underpin resilience. Luxury and boutique cruises, in particular, are benefiting from strong demand and the capacity growth of smaller, premium ships.

Luxury travel more broadly is also outperforming across verticals. Luxury hotel brands and premium airline cabins delivered stronger revenue growth than their mass-market counterparts in 2025. This reflects both premiumization among mainstream travelers and the growing economic weight of high-net-worth individuals (HNWIs) in the US. The number of HNWIs and the wealth they control continues to rise, and surveys indicate that the majority expect to maintain or increase travel spending, even as they moderate spend on luxury goods.

Importantly, luxury demand is reinforcing the value of human-led travel planning. Most affluent travelers still prefer people-driven advice over purely digital or AI-generated itineraries, particularly for complex, high-value trips. This dynamic provides a degree of insulation from digital disintermediation for operators and intermediaries with strong advisory capabilities.

Asset-light, experiential intermediaries also stand to benefit disproportionately. Flexible cost structures, differentiated content and limited balance-sheet exposure allow these players to respond more quickly to shifts in demand while capturing premium growth.

AI is reshaping the rules of competition

Alongside cyclical recovery, a more structural force is reshaping travel: artificial intelligence. AI is no longer an emerging trend but a defining feature of the next competitive cycle.

On the back end, automation of customer service, revenue management and operational processes is rapidly becoming table stakes, freeing up resources for reinvestment. On the front end, AI-driven personalization, semantic search and richer content are improving conversion and customer engagement.

More disruptively, AI is transforming discovery, planning and booking. Agentic search and generative planning tools are beginning to erode traditional search driven traffic, which historically accounted for a significant share of customer acquisition for many travel retailers. Zero-click search rates are rising, and AI booking agents are compressing the research phase that many incumbents rely on to capture demand early in the journey. Though actual disintermediation is early, AI has meaningful potential to redirect enquiries across channels and capture booking flow, with the ultimate impact on distribution mix remaining an open question.

Exposure to this shift is uneven. Businesses with proprietary or exclusive inventory, strong brands, loyalty programs and high-touch trip design are significantly more defensible. By contrast, players reliant on commoditized supply, price comparison and search-led acquisition face a higher risk of disintermediation. Operators across travel verticals are starting to respond to these threats with a collection of offensive and defensive strategies.

Strategic imperatives for travel operators

As the market returns to growth, travel retailers need to adapt to a structurally different environment. Five priorities stand out:

1. Defensibility is a priority.

Investment in exclusive content, differentiated experiences and deeper customer relationships will increasingly determine who remains relevant as AI reshapes discovery and booking.

2. Play into structurally advantaged growth themes.

Consider how to enhance exposure to luxury and experiential demand through portfolio reweighting, product development and partnership, where demand is more resilient and economics are stronger.

3. Rethink distribution.

Over-reliance on traditional SEO and paid search is increasingly risky. Building visibility within AI ecosystems, through content partnerships, proprietary data and emerging generative optimization approaches will be critical.

4. Use AI to amplify human advantage.

AI should be used aggressively to enhance efficiency and personalization, while preserving human judgement where it creates real value for the customer.

Looking ahead

The turbulence of 2025 now appears to be waning with tailwinds forecast through 2026 for US travel, supported by enduring demand and attractive growth hotspots. However, the next phase will not fuel all operators equally. Travel operators that adapt their strategies to premium demand, invest in defensibility and respond decisively to AI-driven disruption will be best placed to capture the next wave of growth.