Travel companies across the industry are investing heavily in AI-powered travel assistants designed to plan, compare, and eventually book trips automatically. The technology promises to transform travel planning into a conversational experience where AI agents handle research, itinerary building, and booking decisions. However, consumer adoption of fully automated travel planning remains limited, and many travelers still prefer to remain directly involved in the booking process. As a result, much of the current investment reflects a strategic bet on how travel discovery and booking may evolve rather than a response to existing customer demand.

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.

Online travel agencies significantly increased their marketing investments in 2025, with the largest players spending a combined $20 billion on sales and marketing. Booking Holdings and Expedia Group accounted for more than three quarters of the total, reflecting sustained competition for traveler attention. Despite ongoing discussions around loyalty, direct channels and AI-driven efficiencies, overall spend continues to rise year over year. While direct bookings are growing for several players, they are not yet reducing dependence on performance marketing and brand advertising.

Key takeaways

Scale of investment: The leading OTAs collectively spent $20 billion on sales and marketing in 2025, marking another year of growth and highlighting the intensity of competition in the sector.
Booking Holdings’ balanced strategy: Booking increased marketing spend to $8.2 billion, with direct business in the mid-60% range and Genius loyalty members accounting for a high-50% share of room nights, yet higher performance and social media investment offset direct gains.

OTAs reported double-digit gross bookings growth in the latest earnings cycle even as consumer travel spending declined. Credit-card data shows little correlation between overall travel spending and OTA performance over the past three years, confirming that OTA growth is increasingly decoupled from underlying demand trends. Instead of signaling a market-wide recovery, recent results point to share gains, B2B expansion, marketing efficiency, and monetization mechanics. The industry may need a new framework to interpret OTA results more accurately.

Key takeaways

Decorrelation confirmed: Credit-card data shows near-zero correlation between consumer travel spending and OTA gross bookings, indicating that OTA performance is no longer a reliable proxy for demand.
Strong growth despite soft spending: Booking Holdings, Airbnb, and Expedia posted double-digit or high single-digit gross bookings growth while overall travel spending declined year over year.

AI is rapidly transforming travel fraud, making scams more sophisticated and harder to detect for travelers and travel providers alike. Advanced language models, deepfake technology, and AI-generated websites allow criminals to impersonate legitimate travel brands convincingly. Experts warn that traditional warning signs are fading, increasing financial risks and trust challenges across the travel ecosystem. At the same time, travel companies are deploying counter-technologies, creating an ongoing technological arms race.

"The European Commission has introduced a voluntary Code of Conduct on Online Ratings and Reviews for Tourism Accommodation to address fake and misleading hotel reviews. The initiative aims to improve transparency, strengthen consumer trust and support fair competition within the European hospitality market. Major booking platforms and industry associations have joined the framework, which sets common principles for review verification and clearer rating methodologies. While not legally binding, the code aligns with broader EU digital regulation and signals continued scrutiny of online platform accountability."

In his recent Skift article, Rafat Ali uses the term “Claude Effect” to describe a new market pattern linked to Anthropic and its AI model Claude. The phrase does not refer to a specific travel product. Instead, it describes what happens when Anthropic announces a new AI capability: investors rapidly sell shares in the sector that could be affected, even if the tool is still early or unproven. Ali argues that travel — an industry built on managing complexity through intermediaries — could be next to experience this kind of market shock.

Key takeaways

The Claude effect is about anticipation, not replacement: Markets have reacted strongly to AI previews in legal, finance, and cybersecurity. The disruption is based on perceived future capability, not fully deployed products.
Travel’s business model is built on managing complexity: OTAs, GDSs, and TMCs earn margins by simplifying search, comparison, booking, policy enforcement, and pricing. If AI agents absorb that complexity, their role could be questioned.
Consumer booking is an obvious pressure point: An AI agent that can search, compare, and book trips through conversation — connected directly to airline and hotel systems — could challenge the traditional OTA interface model.

Across Europe, rising construction costs and mounting operational pressure are accelerating a wave of hotel-to-serviced-apartment conversions. Ageing, independently owned hotels are increasingly being repositioned into tech-enabled, service-light models that promise lower overheads and faster stabilisation. Investors are responding positively, attracted by stronger margins and predictable cash flows. For hoteliers, the trend signals both a competitive threat and a strategic opportunity to rethink operating models and asset positioning.

Key takeaways

Ageing inventory is under pressure: Many older, independent hotels face rising labour costs, deferred capex and succession challenges, making them vulnerable to repositioning or acquisition.
Service-light models reduce cost complexity: Tech-enabled serviced apartments eliminate traditional front desks, daily housekeeping and F&B operations, materially lowering fixed costs compared to classic hotel models.

Modern hotel technology platforms — call them hospitality operating systems, all-in-one suites, or simply the new PMS — have genuinely transformed what an independent hotel can do. Companies like Cloudbeds and Mews have made enterprise-grade distribution, revenue management, and guest experience tools accessible to properties that couldn't have dreamed of them a decade ago. The hospitality industry has spent the last five years celebrating this reinvention.

What it missed is that the corporate traveler was never part of the story.

Artificial intelligence tools such as ChatGPT are reshaping how travellers begin planning their trips. Research shows that while AI excels at generating fast, personalised suggestions, satisfaction declines when it takes on the role of narrowing choices or making final recommendations. Travelers are more comfortable using AI as a source of inspiration rather than as a decisive authority. The findings highlight the importance of keeping humans actively involved in the final stages of travel decision-making.

Key takeaways

Strong at inspiration: AI performs best when generating an initial pool of destinations, activities, or itineraries that spark ideas and exploration.
Weaker at final selection: Satisfaction and visit intention decrease when AI independently narrows options, as travellers may question what was excluded.

"Artificial intelligence is rapidly moving to the center of hotel operations and distribution strategies, but industry leaders caution that its impact will depend on how proactively hotels embrace it. Speaking at the Hotel Industry Development Event in London, panelists warned that without urgency, third parties could once again dominate the landscape—much as online travel agencies did during the rise of internet-based distribution. Rather than viewing AI as a threat, experts argued it should function as an “invisible employee” focused on improving efficiency, personalization, and profitability. The consensus: AI will reshape the industry, and hotels must act now to remain in control of their data, distribution, and bottom line."