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Read articleTravel demand remains resilient, but AI and changing distribution are beginning to reshape how travelers discover, compare and ultimately purchase experiences
We see travel and hospitality companies balancing healthy demand with labor, pricing and distribution economics as AI becomes a new intermediary between travelers and traditional brands.
Travel and hospitality enter September 2026 with demand remaining broadly resilient while technology begins to alter the customer journey more fundamentally. Generative AI is increasingly used for trip planning and could move from inspiration toward autonomous search and booking, potentially reducing direct interaction with traditional travel websites and intermediaries. Hotels and experience providers still contend with labor, asset and service-quality constraints, while dynamic pricing and personalization become more sophisticated. The strategic question is therefore who will retain influence over traveler choice, customer data and economics as discovery becomes increasingly mediated by intelligent systems.
Focus
Travel demand is normalizing as financial caution reaches higher-spending customers
The post-pandemic surge is giving way to more selective spending, increasing pressure on hospitality and travel operators to prove value.
Read nowStrategic Challenges
What happens when premium travelers become more selective about experience value?
The challenge is protecting pricing while consumers scrutinize whether higher travel costs still produce experiences worth paying for.
Read nowStrategic Impacts
A more selective traveler is making experience quality economically visible
Operators with differentiated service and stronger loyalty can better defend spend when customers begin questioning discretionary trips.
Read nowObserved Patterns
Travel companies often mistake post-pandemic pricing power for permanent demand strength
Exceptional willingness to spend can normalize, exposing propositions that relied more on scarcity and pent-up demand than differentiation.
Read nowStrategic Challenges
What happens when premium travelers become more selective about experience value?
The challenge is protecting pricing while consumers scrutinize whether higher travel costs still produce experiences worth paying for.
Read nowStrategic Impacts
A more selective traveler is making experience quality economically visible
Operators with differentiated service and stronger loyalty can better defend spend when customers begin questioning discretionary trips.
Read nowObserved Patterns
Travel companies often mistake post-pandemic pricing power for permanent demand strength
Exceptional willingness to spend can normalize, exposing propositions that relied more on scarcity and pent-up demand than differentiation.
Read nowIndustry Challenge
Travel demand is resilient, but geopolitics and affordability are changing behavior
Travel and hospitality companies are operating with strong underlying consumer interest but greater uncertainty around where, when and how people travel. Geopolitical disruption can abruptly change air connectivity and destination demand, while higher fuel prices flow into fares and operating costs. At the same time, travelers remain sensitive to value and are shortening booking windows in some markets. The challenge is to preserve pricing power and service quality without assuming that post-pandemic volume growth will continue uniformly. Diversification across markets now matters more.
Future Outlook
Travel will become more personalized, distributed and adaptive to disruption
The future travel economy will combine AI-driven discovery, dynamic pricing and more personalized experiences with stronger operational resilience. Travelers can already use AI to compare destinations and itineraries, potentially shifting demand toward lesser-known locations and reducing the power of traditional discovery channels. Hotels and travel platforms will need richer first-party data and more flexible revenue management. Sustainability and overtourism will also influence destination development. Companies that can redirect demand, personalize offers and adapt capacity quickly.
Market Outlook
Tourism remains resilient in 2026, while regional performance has become more uneven
Travel demand remains broadly resilient in 2026 despite geopolitical and energy-price shocks. OECD evidence indicates most reporting destinations expect performance to exceed 2025 levels, although Gulf disruptions, higher transport costs and safety perceptions are redirecting some flows. Hotel revenue growth is increasingly driven by room rates rather than occupancy in mature markets, while performance varies sharply by region. International air traffic also slowed in July. The market has therefore moved beyond broad post-pandemic recovery into a more fragmented phase where execution matters.
POV
The revenge-travel era was never going to be a permanent business model
As demand normalizes, travel businesses must compete again on experience economics rather than assume customers will absorb every price increase.
Read nowOur approach
Read travel through the complete journey from discovery and booking to asset economics and the delivered experience
Our approach� connects traveler demand with acquisition, distribution, pricing, loyalty, capacity, labor and asset utilization. We distinguish demand generated by destination or brand strength from demand purchased through intermediaries and examine how that affects lifetime economics. AI-enabled discovery is assessed as a potential change in distribution power rather than simply another marketing channel. Across hotels, destinations and experience businesses, we then evaluate portfolio and commercial choices through both customer relevance and operating economics, recognizing that attractive demand can still produce weak returns when distribution or asset costs absorb too much value.
The data and estimates presented are indicative and intended for illustrative purposes. Actual outcomes may vary based on each company’s specific context, market conditions, operating model, implementation choices, and the quality and consistency of execution, including actions undertaken by the client.
Keypillars
Explore the key pillars that define this capability and shape how we create focused, measurable business impact.
Demand economics
Examines occupancy, pricing, seasonality, customer spend, channel mix, and demand cycles across travel and hospitality markets
Experience operations
Connects properties, destinations, distribution, service delivery, workforce, and customer journeys across experience-led businesses
Market evolution
Tracks digital distribution, loyalty, changing traveler behavior, labor constraints, and new experience formats across the sector
Can your business keep winning as travelers redefine value, experience and how they choose where to spend?
Get in touch with our Travel, hospitality and experience economy team to address demand, experience, growth and operating challenges.
Get in touchStrategic Framework
Explore our Strategic Framework
Autonomous AI agents are changing how work is executed, enabling adaptive processes that respond intelligently to changing conditions instead of following predefined rules.
Discover our framework01. Map demand
Assess travelers, occasions, destinations, lodging, experiences, channels, spending, and customer segments
06. Track demand
Monitor bookings, occupancy, rates, traffic, spending, destination shifts, and competitor activity
05. Define growth
Prioritize destinations, segments, formats, experiences, pricing, channels, and portfolio expansion
02. Trace behavior
Examine mobility, income, seasonality, digital booking, loyalty, experience preferences, and destination shifts
03. Assess position
Evaluate brand, portfolio, locations, occupancy, pricing, distribution, loyalty, and customer experience
04. Model scenarios
Test travel demand, rates, occupancy, seasonality, capacity, disruption, and channel conditions
How we help
Support travel and hospitality businesses in protecting customer ownership and asset economics as AI and new intermediaries reshape discovery and booking
We help hospitality, travel and experience businesses assess demand, markets, portfolios and customer segments; strengthen pricing, distribution and loyalty economics; and evaluate how AI changes discovery and conversion. Support can include growth strategy, asset and format choices, operating-model transformation, geographic expansion, partnerships, digital propositions and M&A. We connect customer acquisition with delivered experience and asset economics so growth decisions reflect the full value retained after distribution, service and capacity costs.
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Hospitality growth strategy
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Hotel portfolio strategy
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Hotel revenue management
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Hotel pricing strategy
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Hotel operating model
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Hotel productivity transformation
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Guest experience strategy
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Hospitality loyalty strategy
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Direct booking strategy
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OTA strategy
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Hospitality distribution strategy
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Destination strategy
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Tourism demand intelligence
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Experience portfolio strategy
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Travel platform strategy
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Hospitality workforce strategy
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Hospitality asset repositioning
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Hotel development strategy
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Hospitality sustainability strategy
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Travel disruption resilience
Explore our FAQs
Find answers to the most common questions about this service, including key features, processes, and practical considerations. Explore our FAQs for additional insights and guidance.
Changing traveler preferences, digital distribution and economic volatility are altering demand patterns and customer expectations.
Use pricing, capacity and customer segmentation to improve economics while avoiding fixed costs designed around peak demand alone.
Location, occupancy, rate, operating efficiency and capital requirements jointly determine sustainable asset economics.
Assess the demand they provide against commissions, customer ownership and the economics of building direct relationships.
Experiences can increase differentiation and customer value when demand is repeatable and delivery complexity remains economically manageable.
Use scenarios, flexible capacity and liquidity planning where geopolitical, health or economic events can change demand rapidly.
Growth depends on attractive unit economics, differentiated demand and an operating model that can maintain service as the footprint expands.
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