2025 travel industry outlook

AI is increasingly being applied to travel. Early efforts have been pointed across the business, at customer service, operations optimization, predictive maintenance, shopping and discovery, and more. Travel providers and startups are piloting applications with more potential for impact to both the business and the experience of travel, ranging from airline revenue management to personalized hotel guest communications.

Both hoteliers and airlines are in various stages of continuous efforts to sell to travelers in a more robust, customizable way. “Modern retailing” is the phrase in airlines, and “attribute-based selling” is a comparable effort in hospitality. For online travel agencies, it’s “the connected trip.” Whatever you call it, across travel, providers are looking to expand their offerings and enable travelers to purchase the experiences and amenities they want most.

International travel returned slower after the pandemic. US travelers’ enthusiasm to explore brought international trip volume and spend up, but inbound visits have yet to return to pre-pandemic levels. Many factors driving this imbalance are more difficult to address, but US travel companies can focus on marketing to growth countries, catering to Indian travelers, and supporting the visa process, to name a few.

The waiting game that is the recent US election cycle is over. A new administration has taken office, and a new Congress has been sworn in. President Donald Trump proposed several policy changes that could affect travel, some of which were big campaign priorities—including tax cuts, tariffs, and airline acquisitions.