Spread the love

Post Views: 86

The travel industry has spent years talking about artificial intelligence as though it were a particularly clever guest waiting in the lobby. In 2026, that guest has checked in, found the Wi-Fi password and started rearranging the furniture.

Skift Research’s State of Travel 2026 paints a global industry that is still growing, still hungry for experiences and still powered by the very human urge to get out and see the world. Yet the machinery behind that urge is changing at speed.

Skift frames travel as an $11 trillion industry and rebuilds its annual analysis around four universal layers: consumers, commerce, operations and experiences. Every travel business, whether airline, hotel, cruise line, tour operator, online booking platform or neighbourhood travel agency, touches those layers somewhere along the customer journey.

That change of structure is more than editorial housekeeping.

It reflects a business reality. Airlines, hotels, cruise lines, online travel agencies, tour operators and travel advisors are no longer competing only within neat sector boundaries. They are competing for discovery, trust, data, loyalty and the right to remain relevant when an AI assistant may increasingly sit between the traveller and the sale.

For Australian travel sellers, suppliers and tourism businesses, the message is difficult to miss: AI is becoming part of the distribution system, but human judgement has not been shown the door.

Quite the opposite.

The more complicated travel becomes, the more valuable trusted expertise may prove.

AI moves from novelty to habit

Skift’s consumer research says 62 per cent of global travellers are familiar with AI travel-planning tools. Among high-income consumers familiar with those tools, 81 per cent have already used them to plan a journey.

Priceline’s Penny is cited as one example of the shift towards agentic systems, using more than 10 specialised agents to help plan, compare, and book elements of a complete trip within a single conversation. Early results cited by Skift included higher engagement and conversion, fewer support contacts and about 10 minutes saved per journey.

That sounds like science fiction until one remembers how quickly online booking once moved from novelty to normality.

The catch is trust.

Travellers may happily ask AI where to go, what to see and how to stitch a complicated itinerary together, but Skift argues relatively few are yet ready to surrender the entire booking process without retaining control.

The opportunity, therefore, is not simply to automate everything that moves. It is to remove friction without removing reassurance.

The industry itself is not keeping pace with its customers. Skift records 124 per cent year-on-year growth in AI trip planning, yet only 2 per cent of travel organisations have scaled agentic AI. Another part of the research finds 33 per cent of travel operators are experimenting with agentic AI, highlighting a yawning gap between enthusiasm and execution.
There is money behind the technology story too.

Booking Holdings is cited as delivering a 10 per cent lower service cost per booking through AI, even while booking volumes increased.

In an industry where margins have rarely been mistaken for a licence to print money, that is the sort of number likely to make finance directors sit up considerably straighter.

Hotels face a loyalty and identity test

For hotels, the post-pandemic rebound has largely run its course.

Skift expects global hotel revenue growth to settle at about 5–7 per cent through 2027. From here, simply adding another flag to an already crowded hotel portfolio may not be enough.

Indeed, Skift says 74 per cent of US travellers believe hotel brands feel very similar to one another. It also argues loyalty is shifting away from a simple points race towards relevance, personalisation and genuine ownership of the guest relationship.

That matters because first-party data has become strategic currency.

A hotel group that understands its guests can feed better information into its own technology, sharpen its direct marketing, and make personalisation useful rather than theatrical. A hotel that does not own the relationship risks becoming another bed on somebody else’s screen.

Accor Group Deputy CEO Jean-Jacques Morin argues that technology should remove friction so staff can concentrate on the value people are uniquely equipped to deliver. Accor is also positioning loyalty, quality content and direct digital conversations as strategic responses to the growing influence of AI-powered trip planning.

It is a sensible distinction.

Nobody has ever returned from a memorable hotel stay raving about the emotional warmth of the property-management system.

Short-term rentals, meanwhile, are moving from hyper-growth towards maturity.

Skift estimates global short-term rental revenue will rise from US$234 billion in 2025 to US$241 billion in 2026. Airbnb’s share of short-term rental gross bookings is estimated to reach 42 per cent in 2026, compared with 26 per cent in 2019.

AI adoption among short-term rental operators passed 60 per cent in 2025, suggesting technology is becoming a basic operating requirement rather than an optional extra.

Airlines grow, but the easy recovery is over

Aviation tells a similar story of growth with increasingly sharp edges.

Skift expects global airline passenger revenue to approach US$900 billion by 2027, but says annual growth has normalised to low single digits.

The report identifies rising fuel prices, geopolitical disruption, airspace closures and higher operating costs as structural pressures rather than temporary irritants.

Global air-traffic growth is forecast at just 2.1 per cent in 2026, while capacity growth of 1.6 per cent helps push load factors towards a record 84 per cent. The Middle East carries the heaviest burden in Skift’s cited IATA data, while Asia-Pacific and Africa pick up some rerouted traffic.

Independent IATA data reinforces that tougher outlook. Its June 2026 financial forecast put airline net profit at US$23 billion, roughly half the 2025 estimate, with a 2 per cent net margin as fuel costs and Middle East disruption bite.

The lesson for airlines is less glamorous than a champagne-soaked lounge opening, but considerably more important: disciplined capacity, premium demand, operational resilience and cost control will decide who converts enormous revenue into sustainable profit.

Travel agents refuse to read their own obituary

Perhaps the most satisfying section for the traditional travel trade is the one confirming that travel advisors remain very much alive.

Skift says 25 per cent of travel is still booked through traditional travel agents. It also reports that 63 per cent of cruise travellers used an advisor to book their trip during the previous 12 months, while travel-advisor employment is expected to increase by 3–4 per cent through 2033.

Another study in the report finds 58 per cent of travellers plan to use an OTA for their next hotel or airline booking, 50 per cent plan to book direct and a substantial 25 per cent still intend to use a professional travel agent.

The mass-market battlefield may belong largely to online and direct booking, but complicated, expensive and high-stakes travel remains fertile ground for professional advice.

Luxury itineraries, cruises, multi-stop international journeys and large-group travel all reward expertise, taste and judgement.

Skift’s conclusion is particularly important for the trade: complexity has become the advisor’s strongest competitive advantage. AI may encroach on basic research and routine itinerary building, but a human curation layer becomes more valuable as travellers face an almost ridiculous abundance of possibilities.

AI therefore threatens the old justification for charging someone merely to conduct basic research. But it also gives good advisors a formidable new back office.

Used intelligently, AI can reduce administration, accelerate itinerary building, and create more time for the parts clients actually value: judgement, service, and someone competent to call when the wheels come off.

Skift points to AI-enabled travel agency Fora, which raised US$60 million at a valuation above US$1 billion in July 2026. The company had more than 15,000 travel advisors in its network and had generated US$2.3 billion in sales during its first five years.

That is not the profile of an industry waiting quietly for extinction.

Experiences become the real battleground

One of the report’s strongest themes is that travellers increasingly choose trips around what they want to experience, rather than treating activities as something to organise after the flights and hotel are safely tucked away.

Skift highlights research showing that experiences can now trigger destination choice itself, effectively turning the traditional booking funnel on its head.

The commercial gap is enormous.

Skift estimates travellers spend about US$1.1–1.3 trillion on experiences, yet only roughly US$250-310 billion flows through paid, structured channels.

Food leads the opportunity. Seventy-one per cent of travellers plan to spend on culinary experiences in 2026, ahead of adventure at 48 per cent, culture at 42 per cent and wellness at 36 per cent.

Technology penetration remains remarkably low.

Only 34 per cent of travel experiences were booked online in 2024, compared with 66 per cent of accommodation and 81 per cent of flights. Skift attributes some of that gap to the fragmented supplier base: 95 per cent of experience merchants are small and medium-sized enterprises.

This is where AI, social commerce and local expertise may collide most productively.

Experiences are fragmented, highly visual and often supplied by small businesses. Better digitisation could make thousands of authentic products visible to travellers who would never have found them through a conventional search box.

The challenge is to digitise authenticity without flattening it into sameness.

That may be easier said than done.

Cruise keeps getting bigger and younger

Cruise provides one of the clearest growth stories.

Skift reports that 37.2 million people took cruise holidays in 2025, up from 34.6 million in 2024 and 31.7 million in 2023, with passenger numbers expected to reach 42 million by 2028.

Nearly 90 per cent of cruisers say they intend to sail again, while roughly one-third of cruise passengers are now under 40.

The Cruise Lines International Association’s 2026 State of the Cruise Industry Report independently confirms the record 37.2 million global passengers in 2025 and says nearly 90 per cent intend to cruise again.

For travel advisors, that is especially useful news because cruise remains one of those reassuringly complex categories where product knowledge still matters.

Matching the right passenger with the right ship, cabin, itinerary and experience is rather more involved than clicking the first cheerful photograph of a swimming pool.

Expedition and luxury cruising are also among the fastest-growing subsegments identified by travel advisors surveyed in the report, adding further weight to the premium end of the agency market.

Sustainability meets the reality test

The sustainability argument has also become more nuanced.

Travellers care, but many want sustainable choices to be easy, affordable and convenient. Skift finds 32 per cent prefer sustainable options provided they do not cost more or take longer, while another 25 per cent express interest but admit convenience usually wins.

At the same time, overtourism is becoming a practical purchase consideration.

Some 42 per cent of travellers surveyed for Skift’s 2026 research said they were willing to avoid overcrowded or environmentally stressed destinations, while 44 per cent were prepared to choose nonstop flights to reduce emissions.

For destinations, that changes the conversation.

Growth can no longer be measured simply by counting arrivals and congratulating everyone concerned. Capacity, resident sentiment, infrastructure and dispersal increasingly matter.

The old tourism maxim of putting more heads in beds remains useful but preferably not so many heads that the locals start hiding the pillows.

The next competitive advantage is trust

The State of Travel 2026 is ultimately less a celebration of artificial intelligence than a warning against confusing technology with strategy.

AI can lower costs, improve discovery, personalise offers and accelerate service.

It can also flood travellers with options, weaken old distribution habits and make mediocre products easier than ever to compare.

In that environment, the winners are unlikely to be the businesses issuing the loudest AI press release.

They will be the organisations with trusted brands, distinctive products, strong first-party data, reliable operations and people who understand when to let the machine work and when to pick up the phone.

That is particularly encouraging for the travel-advisor community.

A machine may be able to produce 40 possibilities before breakfast. Expertise is knowing which three are worth showing the client.

Travel has always reinvented its machinery while preserving its motive. People still want to go somewhere, feel something and come home with a story worth telling.

In 2026, the software may be smarter.

The fundamental business remains reassuringly human.