Deloitte: Travel demand faces cautious growth in 2026

Economic uncertainty, generational shifts, AI adoption, and regulation reshape the travel industry outlook

Hotel demand is expected to remain resilient in 2026, but growth may become more cautious as economic uncertainty influences traveler spending patterns. Both leisure and corporate guests are showing signs of greater price sensitivity, which may affect occupancy, rate strategy, and channel mix. At the same time, generative AI, demographic shifts, and regulatory developments are reshaping how guests discover, evaluate, and book hotels. The outlook points to continued opportunity for hoteliers who adapt strategically rather than relying on past demand patterns.

Key takeaways

• More price-sensitive guests: Travelers may shorten stays, trade down in category, or book closer to arrival, requiring flexible pricing and revenue strategies.
• Premium demand becoming selective: Luxury demand remains relatively resilient, but midscale and upper-midscale hotels may see stronger competitive pressure on rates.
• Generational demand shift: Millennials and Gen Z travelers increasingly influence booking channels, sustainability expectations, and digital guest experience requirements.
• AI reshaping hotel discovery: Generative AI tools are changing how travelers search and compare hotels, making strong digital content, visibility, and distribution strategy more critical.
• Regulation affecting operations: Data privacy, sustainability policies, visa rules, and consumer protection regulations may impact hotel costs, marketing practices, and compliance requirements.
• Strategic adaptation required: Hotels that diversify demand sources, optimize distribution mix, and align with evolving traveler expectations are better positioned for stable performance.

Source: Deloitte

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