Travel Industry Outlook 2025: Key Trends for Agents and Hotels

The Travel Landscape in 2025: What Agents and Hotels need to know

The travel industry in 2025 continues to grow, but not evenly. For travel agents and hotels, understanding where demand is rising, how travelers are spending, and which markets are softening is essential to staying profitable and competitive.

Global growth with regional imbalances

Global travel is trending two percent higher than in 2024, according to the Skift Travel Health Index. While this represents stability, growth is uneven across regions.

Asia-Pacific is expanding at high single-digit rates year-on-year, yet overall volumes remain eight percent below 2019 levels due to the slower recovery of outbound Chinese tourism. By contrast, the Middle East is seeing exceptional momentum, with international arrivals 41 percent higher than 2019. Religious tourism in Saudi Arabia and rising demand for cultural and event-driven experiences in destinations like the UAE are leading this growth.

For travel businesses, these imbalances require regional strategies. Agents and hotels in Asia must plan for volatility in Chinese source markets. Those working with Middle Eastern suppliers must prepare for seasonal peaks and ensure payment structures and margins can accommodate event-driven demand surges.

The U.S. Market: Still essential, but unstable

Inbound travel to the United States remains a focal point but presents challenges. Between January and April 2025, the U.S. welcomed 21.6 million international visitors, a 1.1 percent decrease from the same period in 2024. Overseas visitation, excluding Canada and Mexico, totaled 15.9 million between January and June, just one percent lower than 2024. While the overall decline is modest, source markets are shifting.

The United Kingdom remains the largest overseas source market, while Italy has emerged as the strongest growth market, with arrivals up nine percent year-on-year. Germany and South Korea have seen double-digit drops. Forecasts project 66.5 million total international visitors to the U.S. in 2025, which is eight percent lower than 2024, though recovery is expected to begin in 2026.

Agents selling U.S. travel products must monitor these market changes carefully and adjust currency hedging and commission structures accordingly. Hotels should focus marketing efforts on resilient or expanding markets such as Italy, Japan, and Brazil, while protecting against potential softening in Canada, Germany, and South Korea.

Travelers are spending more, but differently

Forty-five percent of U.S. travelers say they expect to spend more on travel in the next year. Despite this optimism, traveler behavior is evolving. Many are booking trips closer to departure, taking more frequent short breaks, and directing more of their budgets to immersive experiences such as festivals, food tours, and cultural events, rather than traditional sightseeing.

For hotels, this means developing partnerships with local experience providers and offering flexible, event-focused packages to capture in-destination spending. For agents, particularly those operating as intermediaries rather than merchants of record, dynamic pricing, careful commission tracking, and real-time reconciliation tools are becoming essential to profitability.

Europe and Latin America: Different directions

Europe remains the top international destination for U.S. travelers, but growth is slowing. A two percent decline in May followed a strong Easter-driven April, as new tourist taxes in Italy and the United Kingdom’s Electronic Travel Authorisation scheme created friction for some travelers.

Latin America, on the other hand, continues to expand. U.S. travel to the region is now 36 percent above 2019 levels, with Mexico and the Caribbean leading growth. Puerto Rico, in particular, has seen flight searches rise by 44 percent for the July through September 2025 period, with growing demand from Mexican, Colombian, and Brazilian travelers.

For agents and hotels, Latin America represents a more resilient growth opportunity than Europe, though managing currency exposure and supplier payment structures is essential to protect margins in these markets.

Technology as the competitive divider

Artificial intelligence has moved beyond trend status to become standard practice. Sixty-one percent of travel marketers now use AI to map customer journeys and deliver personalized engagement across booking, travel, and post-stay phases. Generative AI and large language models are accelerating the shift toward automated planning, dynamic pricing, and streamlined customer support.

The businesses seeing the most success with AI are those that invest in clean, organized data and build systems to leverage automation without losing the personal service that drives loyalty.

Staying ahead in 2025

For agents and hotels, the lessons are clear. Growth is available, but only for businesses willing to focus on the right markets, adapt to new spending habits, and use technology intelligently. Flexible commission and pricing models, robust financial planning, and careful management of foreign exchange and payment structures are becoming the foundation of profitability.

Travel demand in 2025 is not just about numbers. It is about understanding where the money is flowing, how travelers want to spend, and what tools can keep a business ahead of its competitors.

References

1. Skift Research – State of Travel 2025 (June 2025): https://research.skift.com

2. U.S. Department of Commerce / National Travel and Tourism Office (NTTO) – International Arrivals Data (July 2025): https://www.trade.gov/national-travel-and-tourism-office

3. Brand USA – Summer 2025 Public Board Deck: Research update slides on inbound visitation, market performance, and forecasts (July 2025)

4. UN Tourism Dashboard – Global Arrivals Data (December 2024): https://www.unwto.org/dashboard

5. Epsilon Travel Insights – Consumer Booking and Behavior Trends (2025)

6. Euromonitor – Voice of Consumer Travel Survey (2024)