Travel Market Insights
Travel Industry’s Top New Research of Q1 2025
Phocuswright—the leading authority in travel, tourism and hospitality research—has started 2025 with one of its most insight-rich quarters to date. From the impact of cutting-edge technologies to the shifting mindset of today’s travelers and the evolution of the short-term rental market, the company’s recent research offers a window into the industry’s ever-changing dynamics. Here, we’ll recap a few of the most influential reports of the year so far.
Predominance of Online Travel Bookings
A January report from Phocuswright projects robust growth for the global travel market, particularly in the online travel booking sector, which is rapidly becoming the dominant channel for consumers. According to the findings, online travel bookings are expected to grow from $1 trillion in 2024 to $1.2 trillion by 2026, representing nearly 65 percent of all global travel bookings.
Key findings:
- Global travel bookings will rise from $1.6 trillion in 2024 to $1.72 trillion in 2025, reflecting slower but steady growth as the market matures.
- North America leads online travel bookings with $342 billion in 2024, followed by Asia-Pacific ($285 billion) and Europe ($254 billion).
- Offline bookings remain significant, with North America ($202 billion) again leading in 2024, followed by APAC ($166 billion) and Europe ($129 billion).
- Online hotel bookings are expected to grow from 55 percent in 2024 to 58 percent by 2026.
- The overall travel market will grow 6–9 percent annually through 2026, with online bookings advancing 8–12 percent annually.
Prevalence of AI in Travel Planning
Phocuswright’s February report, titled “Travelers and Tech 2024: GenAI, VR and More”, reveals a sharp rise in the use of Generative AI (GenAI) among U.S. travelers, with growing satisfaction and an increasing number of use cases tied specifically to leisure travel.
Key Findings:
- GenAI usage among U.S. travelers nearly doubled in one year, jumping from 22 percent in 2023 to 39 percent in 2024, surpassing more established consumer tech like virtual and augmented reality.
- Of those who used GenAI for any purpose in the past year, 46 percent applied it to travel, making travel the second most popular topic, after entertainment.
- Overall, 18 percent of U.S. travelers used GenAI specifically for leisure travel in the past year.
- Leisure travel is projected to be the top GenAI use case in the next 12 months.
Top Anticipated Uses of GenAI for Travel in the Next Year:
- Generating trip ideas – 74 percent
- Researching flights – 65 percent
- Comparing and choosing destinations – 63 percent
- Comparing activities and experiences – 55 percent
- Building itineraries – 54 percent
- Getting ideas for things to do – 52 percent
- Researching hotels and rentals – 49 percent
- Researching car rentals – 43 percent
Phocuswright identifies a significant shift in travel planning behavior, noting that generative chat and search environments are becoming central to travel intent and likely bookings in the near future.
Evolution of Short-Term Rentals
In its March report, “U.S. Short-Term Rentals 2025: Host and Property Manager Trends”, Phocuswright examines the evolving landscape of vacation rentals—such as Vrbo and Airbnb—exploring the ways in which operators are facing a new set of challenges shaped by rising competition, shifting guest expectations and increased regulatory pressure.
Key findings:
- The short-term rental (STR) market remains fragmented, with hosts pursuing a variety of financial goals:
- Despite varying goals, 87 percent of hosts report meeting their financial targets, especially those with upscale properties.
- Hosts cite maintenance (33 percent), operational costs (27 percent), and unexpected expenses (25 percent) as top challenges.
- 57 percent of hosts still struggle with accurate budgeting, especially those not profit-focused.
- 24 percent of hosts have stopped renting at least one property in the past year.
- 10 percent of surveyed homeowners are lapsed hosts.
- 47 percent of hosts have already adjusted operations due to regulations.
- 56 percent worry future laws could threaten their ability to operate.
- Despite concerns, 88 percent are confident in their ability to comply, and 87 percent prioritize community goodwill by adhering to local rules.
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Topics From This Article to Explore
Travel Market Insights
U.S. Visa Sticker Shock: New $250 ‘Integrity Fee’
Many travelers applying for U.S. tourist visas should be prepared to pay at least an additional $250 for a new “Integrity Fee.”
It’s part of the recent budget law and hasn’t been implemented yet, but the Department of Homeland Security is authorized to start charging this fiscal year. Starting in Fiscal Year 2026, which starts October 1, the Visa Integrity Fee will be adjusted annually for inflation.
It applies to travelers applying for non-immigrant visas, but people from the more than 40 Visa Waiver Program countries are not subject to the Visa Integrity Fee.
Travelers are eligible for reimbursement sometime after the visa expires as long as they don’t overstay the visa expiration date by more than five days or engage in unauthorized work.
“There is no timeline for implementation of the fee or direction as to how the fee will be collected and refunded,” according to the U.S. Travel Association.
One issue: It may discourage travelers from visiting the U.S. because they would have to shell out $250 and wonder if they would ever get the reimbursement.
“This fee, which will be at least $250 and comes on top of existing visa fees, adds an unnecessary financial barrier for international visitors,” said Erik Hansen, US Travel’s senior vice president, government relation affairs. “Among the top deterrents to visiting the U.S. are cost and visa wait times. And the new visa integrity fee increases the upfront costs of visiting the U.S. 144%, while doing nothing to lower interview wait times. Even if it is technically reimbursable, the added complexity and cost will discourage visitors.”
$24 I-94 Fee
That’s not all of the costly news for some international arrivals in the new law: The application fee for the I-94 arrival and departure record will rise to $24 from $6.
This fee will likely apply to travelers entering the U.S. by land, and to travelers from Visa Waiver Program countries.
This fee will also increase each year with inflation. Those exempt from filling out the form include American citizens, resident aliens, most Canadians, and aliens with immigration visas.
$40 ESTA Fee
The Electronic System for Travel Authorization (ESTA) fee is rising to $40 from the current $21. This will be paid by travelers who enter the U.S. from Visa Waiver Program countries at least through 2034.
These are the Visa Waiver Program countries, according to the U.S. Department of State:
Visa Wait Times and Cost
A family of four from Brazil, which is not a visa waiver program country, would pay $1,876 in visa fees under the new pay structure to travel to the U.S., an increase of more than $1,100, according to the trade association.
“At a time when the U.S. should be focused on attracting more international visitors, especially ahead of global events like the World Cup and Summer Olympics, burdening them with higher fees and reducing funding for Brand USA is counterproductive,” Hansen said. “We need smarter policies that enhance our global competitiveness, not ones that make the U.S. a less welcoming destination.”
Revenue Generators
Backers of the fees, however, see them as revenue generators.
For example, 20% of the I-94 fees are earmarked for the Land Border Inspection Fee account, 20% go to Customs & Border Protection, and 60% ends up in the Treasury Department general fund.
Regarding the ESTA fee, $10 goes to the Department of Homeland Security for cost recovery, $13 is funneled to the Treasury Department for Deficit Reduction, and $17 of the fee goes to the Travel Promotion Fund, which funds Brand USA.
The travel industry’s top event returns this fall.
September 16-18, 2025 – NEW YORK CITY
Travel Market Insights
Grand Canyon Fire Destroys Historic Lodge
Parts of the Grand Canyon National Park have been closed for the rest of the 2025 season as wildfires burn across the region, covering parts of one of the U.S.’s most visited natural landmarks in smoke.
The North Rim’s Dragon Bravo Fire exploded in size by 500 acres on the evening of July 12 as gusty winds, dry air and above-normal heat hit the area.
The fires destroyed the historic Grand Canyon Lodge and numerous surrounding cabins, according to the National Park Service.
Firefighters say there is currently zero containment.
“We are devastated by the loss of the Grand Canyon Lodge and historic buildings on the North Rim. All guests and staff are safe,” the lodge said in a statement, adding that it will be in touch with visitors who have future bookings.
Aerial footage released by the National Parks Service on Friday showed the remains of the famous lodge.
Grand Canyon Closures for the Rest of the Season
The cause of the fire was linked to lightning strikes, according to local reports.
Early damage assessments suggest that between 50 to 80 structures have been lost, including park administrative buildings and visitor facilities. No injuries or fatalities have been reported.
Fire fighting efforts continue around the threatened area.
But with fire activity still high and infrastructure at risk, officials say the North Rim will remain closed to all visitors for the rest of the year.
The South Rim, which receives the majority of visitor traffic, remains open.
Skift’s in-depth reporting on climate issues is made possible through the financial support of Intrepid Travel. This backing allows Skift to bring you high-quality journalism on one of the most important topics facing our planet today. Intrepid is not involved in any decisions made by Skift’s editorial team.
The travel industry’s top event returns this fall.
September 16-18, 2025 – NEW YORK CITY
Travel Market Insights
Skift IDEA Awards: Meet the 2025 Finalists
Key Points
- The 2025 Skift IDEA Awards spotlight over 240 finalists across seven major criteria groups, highlighting innovation, creativity, and impact within the global travel industry.
- Finalists include a diverse range of companies, individuals, and projects recognized for leadership in areas like technology, sustainability, DEI, and guest experience.
- The awards process showcases the travel ecosystem’s forward-looking, purpose-driven approach, judged by an independent panel of industry experts.
Summary
The 2025 Skift IDEA Awards, now in their seventh year, have announced over 240 finalists from more than 420 global submissions, cementing the awards as a benchmark for excellence in travel innovation. Divided into seven key criteria groups—including Industry Innovators, Change Makers, Creative Thinkers, Problem Solvers, Travel Technology, Short-Term Rentals, and Meetings & Events—the program highlights individuals and organizations driving the industry forward. With categories ranging from sustainability and DEI to technology and guest experience, the awards reflect the sector’s bold, purpose-led evolution, and will be judged by a diverse panel of travel industry leaders.
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