NEW YORK—Despite hospitality investors and travel consumers facing a turbulent landscape, the desire to experience new places has never been stronger, delegates heard at the NYU International Hospitality Investment Forum in New York on Monday.
Speaking about travel flows and demand trends, European guest Olaf Belgraver, global commercial director at Booking.com said that much of the industry’s future growth would be driven by emerging markets' backing up his viewpoint with several encouraging data points.
Belgraver pointed out that the travel industry is responsible for some 10 percent of global GDP today – and rising.
“By 2034 we expect the share to rise to 11.5 percent – some $16 trillion dollars,” he noted. “And despite being a very mature industry already, the outlook is positive. The number one choice for spending discretionary income remains travel, significantly above DIY or making one’s home more attractive.”
Markets to Watch
Certain key markets are expected to drive further growth - the number of trips that Indian travelers take is expected to double to reach five billion trips by 2030. This equates to India alone being responsible for some $240 billion of travel receipts by 2035, with Germans, by way of comparison, responsible for spending some $190 billion on travel.
Belgraver noted that global travel’s top markets – China, the US, the UK, India and Germany – would only increase their share even further by 2040, with the middle classes responsible for driving growth.
However, he said that travel professionals should be ready for change. The first aspect would be macroeconomic, in the light of tariffs and other global tensions.
However, positively, he noted: "The history of travel gives us some confidence, with the industry bouncing back to pre-Covid levels by 2023” as he highlighted that three out of four travelers were on record as looking forward to more trips and that half expected to spend more in 2025.
A Changing World
Other levers of change include regulation, with complexity expected to remain across areas including tax, fundamental rights, consumer protection, sustainability and competition. He warned that these were areas that global travel players exposed to multiple legal jurisdictions need to factor in.
Consumers are also likely to change the ways that they research and book travel, he noted, although online booking remained the preferred medium. Belgraver stated that some 57 percent of millennial and Gen Z travelers now use social media channels as a major trip planning source and stressed that marketing teams need to be able to adapt, particularly in a world where trends and destinations can go viral so quickly.
Looking further at technological change, he noted that users of artificial intelligence amongst the Gen Z cohort have grown exponentially, displaying a four times increase in the last nine months alone.
“Some 50 percent of 18- to 34-year-olds have used AI for holiday research and planning,” he said, while “agentic AI – when you ask AI to make reservations for you on your behalf – is also round the corner.”
Optimistic Outlook
In terms of U.S. and Canada travel trends, he suggested that both consumer groups were spending more on travel, allocating more budget to food and amenities and were happy to visit more expensive destinations. They too were using AI more and more to plan trips - for restaurant recommendations, to find accommodation, secure deals and discounts, and even to access safety information.
All that meant that now, some 75 percent of U.S. and Canadian travelers trust AI to plan a trip for them.
But all in all, he remained optimistic, pointing to the positive of rising travel budgets across multiple markets.
And while U.S. travelers have shown that they often prefer to stay in their own countries for reasons including convenience and cost, over 50 percent of Americans now hold passports, and they remain global travelers worth monitoring.