This report explores the future of travel in the US. Covering market dynamics, consumer insights, and launch activity and innovation. The report is vital reading for brands and businesses looking to secure future growth in the US travel sector.
This report looks at the following areas:
- Projected growth and trends shaping the future of the tourism market
- Emerging economic shifts and their cross-sector impacts
- Anticipated traveler behaviors under evolving economic scenarios
- Budget-conscious travel decisions and their future implications
- The evolving role of loyalty programs in tomorrow’s travel landscape
- How travelers envision marketing adapting to future tech innovations
- Forecasting traveler demands over the next two to five years
What does the future of travel look like in the US?
Where we are now: the will to travel hasn’t diminished, with the majority of consumers saying they plan to take a vacation in the next 12 months. However, economic uncertainty has led would-be travelers to be less confident in making concrete travel plans. Even as they plan their trips, they’re keeping a sharp eye on their budget, and are willing to make trade-offs in factors like trip length and service quality to be able to travel.
In the next two years: regardless of the direction the economy takes, there will be changes in how brands operate, particularly in the loyalty sphere. Programs will introduce more diverse ways to accrue loyalty points and will form deeper partnerships with other brands to keep their programs relevant. As more travelers book through loyalty portals, these platforms will have to become more seamless to stay competitive with traditional travel booking outlets.
Five years and beyond: successful travel brands will give travelers the most relevant information with the least amount of friction, such as through booking through influencer posts. Moreover, brands that can make significant sustainability progress will see more business from an increasingly sustainably-minded travel population.
Meet the Expert Behind the Analysis
This report is written by Mike Gallinari. Mike joined Mintel in 2018 as a Travel & Leisure Analyst. Mike writes primarily about consumers’ travel preferences, building on his professional background at Groupon Getaways and Travelzoo, as well as his personal passion for travel.
Economic uncertainty has travelers reluctant to make firm plans. Brands can address their current needs in ways that will dovetail into their future demands.
Mike Gallinari
Senior Travel & Leisure Analyst
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EXECUTIVE SUMMARY
- What you need to know
- Market size & forecast
- Market predictions – mainstream view scenario
- Market predictions – tariff turmoil scenario
- What consumers want & why
- Opportunities
- Orient travel programs toward travelers’ spending needs
- Leverage technology for personalized experiences
- Invest in meaningful sustainability initiatives
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MARKET DYNAMICS
- Market context
- Consumers feel pressured by higher travel prices, rising costs of everyday items
- Graph 1: negative effects on travel/vacation plans, 2025
- Rising core inflation will see consumers pulling back on leisure
- Graph 2: headline CPI and core CPI, 2021-25
- Employment numbers are healthy, but tension bubbles below the surface
- Graph 3: unemployment and underemployment rates, 2019-25
- Drop in confidence after a summer increase reveals shaky economy
- Graph 4: consumer sentiment index, 2022-25
- Market drivers
- Industry players will play cat-and-mouse according to consumer demand
- Inbound tourism drop puts pressure on the market
- Government actions raise the question: “Does the US even want inbound tourism?”
- Travelers anticipate complications due to government actions
- Brands have to step in to guide travelers through government-induced hurdles
- TSA hopes to reverse its image and expedite the security process for domestic travelers
- Market size and forecast
- Tourism spending faces short-term sluggishness
- Graph 5: total tourism spending and forecast, at current prices, 2019-30
- Tourism spending faces short-term sluggishness
- Tariffs put tourism growth at a crossroads
- How travel sectors will fare
- Airlines won’t see clear skies
- Sustained economic doldrums will stress carriers
- Hotels will be upended by tariffs and immigration policy enforcment
- Hotels face more pressure with prolonged downturn
- Cruise lines can anticipate (relatively) smooth sailing
- Value-seeking travelers will boost cruising popularity
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CONSUMER INSIGHTS
- Consumer fast facts
- Travel plans in the next 12 months
- Travel is a top priority…
- …however, consumers are hesitant to commit to plans
- Graph 6: any vacation planned and declared intent for domestic or international vacation in the next 12 months, 2024 and 2025
- Younger travelers are less sure of plans, but will book suddenly when ready
- Graph 7: any vacation planned and declared intent for domestic or international vacation in the next 12 months, by generation, 2025
- Airbnb brings BNPL in-house
- Financial security doesn’t mean people are ready to commit to reservations
- Graph 8: declared intent to take either a domestic or international vacation in the next 12 months, by HHI and by financial situation, 2025
- Google is ready for planners across the financial spectrum
- Meet planners with deals, budgeting solutions and short itineraries
- Graph 9: anticipated changes in travel habits in the next 12 months, 2025
- Engage with financially “Healthy” householders now, watch for increased activity from more restrained householders
- Graph 10: anticipated changes in travel habits in the next 12 months, by financial situation, 2025
- Airbnb Services is a solution for budget hawks looking for hotel amenities
- Approach Gen X as a family vacation planning asset
- Graph 11: anticipated changes in travel habits in the next 12 months, by generation, 2025
- Visit NYC reminds vacation planners that there are viable budget options in the city
- Loyalty’s role in the next year
- TLPs must lead with savings, improve their portals
- Graph 12: attitudes toward travel loyalty programs – any agree, by generation, 2025
- Kudos usage by young travelers can change the direction of TLPs
- Debt-wary travelers will likely limit future travel, so marketers have to appeal to emotion
- Graph 13: attitudes toward travel affordability – any agree, by generation, 2025
- Booking.com’s new card can promote travel booking, optimism
- How vacation priorities may change in the next year
- Vacationers are focused on maximizing value, but will prioritize other aspects in the long-term
- Graph 14: importance of vacation aspects, next vacation vs last vacation, 2025
- Stay ahead by maintaining sustainability and event strategies
- Graph 15: vacation aspects more important for the next trip – environmental imact and special events, by generation and by financial situation, 2025
- Market “coolcation” and dupe destinations as a solution to weather concerns
- Graph 16: weather/climate considerations while planning, by generation, 2025
- Providers at dupe destinations will find parents receptive
- Graph 17: weather/climate considerations while planning, by number of children living in household, 2025
- Travel in the next two years
- Loyalty networks will empower travelers across categories
- Finserv programs will challenge advancements by OTAs
- Travel tour companies will allow freedom of exploration while removing hassle of research
- Travel in the next five years
- Proximity and cost matters now, but prioritize accurate info in the future
- Graph 18: desired personalized travel marketing types, 2025
- Future travel tech will give immediate, proximal data
- Graph 19: desired travel tech services in the next five years, by generation, 2025
- Tech can’t do all the heavy lifting, so brands will need a presence in travel communities
- Convenience of AI influencers won’t be worth the reputation risk
- Younger travelers will treat AI travel tech with more scrutiny, which can affect brand trust levels
- Social media will become the primary place to plan and book travel
- Destinations will make their marketing an immersive social outing
- Brands will spearhead more participatory sustainability initiatives
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INNOVATION AND MARKETING STRATEGIES
- Launch activity and innovation
- JetBlue enables Venmo payments to fit into travelers’ everyday habits
- Delta’s AI pricing tool meets heavy resistance
- Intrepid’s “Active-ism” responds quickly to shifts in society
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APPENDIX
- Market definition
- Consumer research questions
- Consumer research methodology
- Generations
- Abbreviations and terms
- Forecast methodology
- Forecast fan chart methodology
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