Travel takes off once more in 2026, with AI now an crucial

Following a considerably disappointing 2025, this 12 months will see extra progress within the U.S. journey sector, supported by a powerful medium-term outlook and stronger demand. From agentic search to generative planning instruments that help in planning and reserving, AI will a significant a part of the following cycle of competitiveness in journey, in response to a report from OC&C Strategy Consultants.

The analysis additionally exhibits that AI is starting to reshape the foundations of competitors. From discovery and planning via to reserving and distribution, AI is difficult conventional sources of aggressive benefit.

Multiple sources predict that U.S. journey could be very prone to rebound to a progress sample in 2026, following a major decelerate in 2025. That comes as tendencies level to extra shopper spending on expertise moderately than bodily items and extra personalised journey plans that always concentrate on ‘authentic’ experiences and off-the-beaten-path locations.

Source: OC&C evaluation, Euromonitor, US Travel Association, Phocuswright, Mintel

The 2025 calendar 12 months marked a transparent slowdown for U.S. journey following a powerful restoration from the pandemic crash in 2020. Overall market progress moderated to roughly 1% or 2%, with home and inbound worldwide journey experiencing the sharpest strain.

Domestic air passenger volumes flattened, and inbound worldwide journey suffered in almost each month of the 12 months. This softness impacted a number of sectors, as lodge chains noticed occupancy charges decline and expertise suppliers reported flat or softening reserving momentum.

Source: Bureau of Transportation Statistics, US International Trade Administration, OC&C Analysis

This downturn didn’t replicate a lack of shopper urge for food however moderately a spike in macroeconomic and geopolitical uncertainty. Factors resembling tariff bulletins, commerce tensions, and inventory market volatility made customers extra cautious about discretionary spending. Instead of abandoning journey, many customers postponed journeys, shortened their stays, or traded all the way down to extra inexpensive choices.

Despite these challenges, the structural case for journey stays intact. Multiple forecasts anticipate U.S. journey spending will develop by roughly 3% to six% yearly between 2025 and 2028, matching pre-pandemic tendencies.

Experience-focused journey and luxurious

This confidence is rooted in long-term behavioral shifts, as customers proceed to reallocate spending from items to experiences. Premiumization additionally stays a robust drive, with vacationers more and more selecting upgrades and unique actions. Additionally, the persistence of distant and hybrid work helps blended leisure and enterprise journey, enabling extra frequent and longer stays.

While the general outlook is optimistic, sure classes are higher positioned to outperform. The cruise trade is a standout instance, as operators continued to develop forward of the broader market even throughout the 2025 slowdown.

With solely 5% of Americans cruising annually, in comparison with greater than 80% taking leisure journeys, important room for growth stays. Luxury journey can also be outperforming, with premium airline cabins and luxurious lodge manufacturers delivering stronger income progress than mass-market counterparts.

Source: Euromonitor, Previous OC&C Experience, OC&C evaluation

Growing significance of AI

Alongside this restoration, AI has begun reshaping the trade. On the again finish, automation of customer support and operational processes is changing into customary. On the entrance finish, AI-driven personalization and planning instruments are reworking how vacationers uncover and guide journeys. While this expertise introduces dangers of disintermediation for some, companies with unique stock, robust manufacturers, and high-touch service stay extra defensible.

Going ahead, journey operators might want to adapt, prioritizing funding in unique content material, taking part in into luxurious and experiential demand, and rethinking distribution to account for AI-driven search.

“The turbulence of 2025 now appears to be waning with tailwinds forecast through 2026 for U.S. travel, supported by enduring demand and attractive growth hotspots,” Phil Hunt, accomplice with OC&C Strategy Consultants.

“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.”