Travel AI spending remains pilot-led, not transformational

Despite broad adoption, most companies layer AI onto existing systems rather than redesigning workflows end to end

Phocuswright’s latest study, Budgets, Barriers and the Race to Agentic AI, finds that more than 60% of travel companies are already engaging with agentic AI, marking a decisive shift from experimentation to operational ambition. Presented ahead of discussions at ITB Berlin, the research suggests 2026 could be the year AI moves into the core of travel operations. Unlike earlier generative tools focused on content, agentic AI is designed to execute complex, real-world tasks across systems using real-time data. While enthusiasm and budgets are rising, many companies are still in early stages of scaling and organizational readiness.

Key takeaways

• Widespread engagement with agentic AI: 61% of travel companies are either experimenting with or scaling agentic AI, signaling that AI is now viewed as a long-term structural capability rather than a side initiative.
• Scaling remains limited but progressing: 6% of companies are scaling agentic AI across multiple domains, 22% are scaling in selected areas, and 35% remain in experimentation mode, with additional firms planning adoption within three to five years.
• Technology budgets support AI momentum: 62% of companies expect their technology budgets to increase in 2026, with most anticipating growth rather than cuts, creating financial room for AI investments.
• AI tops the strategic agenda: Generative AI has become the number one technology investment priority for many travel executives over the next 12 to 18 months, moving firmly into board-level planning discussions.
• Spending focused on pilots, not transformation: Although adoption is broad, most AI spending supports tactical experimentation layered onto existing systems rather than full workflow redesign.
• Preparedness lags behind ambition: Executives report positive business impact from AI, but integration complexity, talent shortages and data security concerns continue to slow large-scale deployment.
• Next competitive frontier is operational scale: The research suggests that companies able to move from pilots to production—supported by strong infrastructure, governance, interoperability and skills—will gain a disproportionate competitive advantage in the next phase of travel industry competition.

Source: PhocusWright

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