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每9 percent annually through 2026, with online bookings advancing 8每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 每 74 percent
- Researching flights 每 65 percent
- Comparing and choosing destinations 每 63 percent
- Comparing activities and experiences 每 55 percent
- Building itineraries 每 54 percent
- Getting ideas for things to do 每 52 percent
- Researching hotels and rentals 每 49 percent
- Researching car rentals 每 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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