Deloitte: Trends Driving Travel Demand

Travel demand is expected to remain strong in 2025, according to Deloitte Development’s annual report. The study focuses on four key trends that businesses in the industry must manage to make the most of the new year’s opportunities – from the use of artificial intelligence to the impact of the new US administration.

What’s driving travel demand

Since the end of pandemic restrictions, travel activity has seen a sharp increase, and everything indicates that this momentum will continue. During the recent holiday season, Americans planned more and longer trips, with increased spending compared to 2023. Passenger traffic at US airports increased by 7% between December 20 and January 5.

Three main factors driving increased demand:

• New priorities after the pandemic: Many travelers said they would increase their travel budgets, with 40% now considering travel as the most important thing in their lives.
• Working on the go as a new reality: The percentage of travelers who work during their longest trip increased from 33% to 50%, showing that combining work and travel is becoming a way of life.
• Positive economic outlook: 37% of Americans said their financial situation is better than it was last year (up from 31% in 2023).

Challenges and Opportunities for Tourism Businesses

To capitalize on demand, tourism businesses are challenged to manage a series of changing parameters:

1. Accelerating Artificial Intelligence (AI)
   AI is now being applied to various aspects of tourism, from customer service and operations management to maintenance and the booking experience. Businesses are testing solutions that are expected to transform both their operations and the traveler experience – from personalized communication with hotel guests to airline revenue management.
2. Personalizing experiences
   Personalizing experiences is a central strategy for hoteliers and airlines. Concepts such as “modern retailing” for airlines and “attribute-based selling” in hospitality are gaining increasing importance. Online travel agents are investing in the so-called “connected trip” – a single experience that integrates all phases of the trip.
3. Imbalance between inbound and outbound tourism
   While international travelers from the US have returned dynamically, visits to the US remain below pre-pandemic levels. Adjusting the marketing strategy, targeting emerging markets (e.g., India,) and facilitating visa issuance are some of the proposals to boost inbound tourism.
4. The new US administration
   The change of administration also brings new policies that may affect the tourism sector. The new President, Donald Trump, has proposed a series of changes, such as tax cuts, tariffs, and regulations for airline acquisitions, which could have direct consequences for the operation of businesses in the sector.

Source:
tornosnews.gr
https://www.tornosnews.gr/en/tornos/trends/51452-deloitte-trends-driving-travel-demand.html