Phocuswright Research Roundup 4Q24
The most robust quarterly summary, ever?
Phocuswright ended the last quarter of 2024 with 21 publications and the annual gathering of travel's best and brightest execs at The Phocuswright Conference. A few of our most important reports published during this quarter, including The State of Travel Startups 2024, U.S. Consumer Travel Report 2024 and a new, in-depth overview report Travel Forward: Data, Insights and Trends for 2025 (available to non-subscribers).
Here's a recap of the insights, data and more. (Click on each report title to access the report).
Travel Forward: Data, Insights and Trends for 2025
Global growth continues at a strong pace: Global gross travel bookings are projected to grow to $1.61 trillion in 2024, reflecting strong demand in the travel sector despite some economic headwinds. This growth marks a healthy expansion of the market as travel continues to advance, far surpassing pre-pandemic levels.
Phocuswright's Travel Forward: Data, Insights and Trends for 2025 provides broadscale insights into the $1.61 trillion global travel market, offering essential data for understanding industry trends and growth.
Featuring highlights by segment, channel, consumer behavior metrics and more, this report equips industry stakeholders with the key data and trends needed to navigate the evolving travel landscape. For more in-depth analysis and data including longer-term predictions, become an Open Access subscriber to use our Phocal Point market sizing data tool and to access all reports in the Phocuswright Research library.
Travel Technology
Among digital travelers, GenAI has taken the lead in general usage (not only for travel) across advanced technologies.
Travelers and Tech 2024: Attitudes and Usage
As technologies develop and travel providers implement them in their business processes, brands must understand their customers’ attitudes and perceptions about the tools. They must reflect on consumers’ willingness to use technology and how their purchasing decisions are impacted by their attitudes towards technology.
Phocuswright’sTravelers and Tech 2024: Attitudes and Usage is part of a comprehensive consumer research study delving into how travel consumers employ technology in the course of their trip planning and execution. This report examines travelers’ general attitudes toward and usage of technologies, while a companion report explores specific tools and tech, including generative AI.
The full report addresses these key questions:
- What is the state of travelers’ awareness and attitudes towards and motivations for using or avoiding certain technologies?
- What roles do mobile apps play in the traveler journey, in comparison and contrast to websites?
- What are consumers’ main pain points and key challenges with increasingly popular technologies?
- Which technologies are competitive differentiators?
- How do consumers feel about sharing personal data with travel suppliers, and are some types of data sharing more acceptable than others?
Travelers and Tech 2024: GenAI, VR and More
With rapid advances in generative AI, virtual reality and a range of other high-tech tools, travelers can increasingly leverage these technologies in their trip planning and incorporate them into their actual travel experiences. Phocuswright’s Travelers and Tech 2024: GenAI, VR and More is part of a comprehensive consumer research study delving into how travel consumers use technology in their trip planning and execution. The first report in the study examines travelers’ general attitudes toward and usage of technologies, while this report is more focused on specific tools and tech.
Research insights:
Distribution
As the travel industry evolves to be more data-driven, the need to balance personalization with privacy will represent a significant challenge. AI will be able to recognize obscure patterns that provide unprecedented levels of personalization. In many cases, the convenience and relevance created by authentic, traveler-centric recommendations will be welcomed. However, the same innovation could be perceived as transgressing a different traveler’s personal privacy boundaries.
The Future of the TMC
The business travel market is experiencing a resurgence, with spending projected to reach $1.48 trillion in 2024. Traditional TMCs are adapting by upgrading their technology stacks and focusing on automation, while newer entrants like are leveraging modern APIs, AI tools and blockchain to reshape corporate travel management. Staffing shortages and the rise of open systems further underscore the need for innovation. Ultimately, the future success of TMCs will depend on their ability to deliver seamless global coverage and efficient, traveler-centric solutions.
This analysis examines the evolving landscape of travel management companies (TMCs), highlighting the challenges facing traditional TMCs due to changes in airline distribution, advances in AI, and competition from new entrants. Key questions answered by this research include:
- What role does AI play in shaping the future of TMCs?
- How are traditional TMCs and new entrants adapting to changes in airline distribution and NDC
content? - What technological innovations are being introduced by new entrant TMCs?
- How are staffing shortages and automation impacting the evolution of TMCs?
Evolving Customer Journeys Transform Travel Marketing
The customer journey in travel marketing has transformed dramatically over time, reflecting broader shifts in traveler behavior, technology, and societal trends. From the early days of mass marketing in the "product era" to today’s emphasis on personalization and authenticity, each phase of the traveler’s journey—Inspiration, Research, Planning, Validation, Booking, Experience, and Sharing—has evolved into a complex, non-linear process. Travel marketers must now leverage advanced data and AI tools to personalize experiences, engage travelers across fragmented touchpoints, and align with rising expectations for seamless, meaningful, and sustainable journeys. Those who adapt and harness these tools effectively will secure a competitive edge in the dynamic future of travel marketing.
Key questions answered by this research include:
- How has the traveler’s customer journey evolved over time, and what are the key phases?
- What major trends, such as personalization and authenticity, are shaping the future of travel marketing?
- How can travel marketers leverage advanced data analytics and AI to optimize customer engagement across touchpoints?
- What challenges do travel marketers face in navigating privacy regulations and fragmented customer journeys?
- How can marketers align with changing traveler expectations to create seamless and meaningful travel experiences?
Digital and Green: The Future of Travel Regulation
The travel industry faces growing regulatory challenges as the digital age and environmental concerns reshape its landscape. From stringent data privacy laws like the EU's GDPR to AI and sustainability regulations, companies must navigate an evolving web of rules. Many pieces of legislation target key areas including consumer protection, competition, taxation, and environmental impact, with global initiatives pushing for generalized standardization. This article explores how travel operators are adapting to these developments and the potential for international cooperation to reduce compliance complexity and drive sustainable growth.
Key questions answered by this research include:
- How are digital regulations, such as data privacy laws, affecting the travel industry?
- What consumer protection regulations are in place for online travel bookings and platforms?
- How are competition laws evolving to address the dominance of Big Tech in the travel industry?
- How are environmental regulations, like carbon emissions policies, shaping the future of travel?
- What challenges do travel companies face in navigating a patchwork of global digital and environmental regulations?
Research insights: Is the future of travel regulation digital and green?
Market Sizing & Consumer Trends
Southeast Asia Travel Market Report 2023-2027
Southeast Asia’s gross bookings are set to exceed $59 billion in 2024, surpassing pre-pandemic levels, with online penetration climbing to 74% by 2027. Mobile-centric consumers and AI-driven tools are reshaping booking behaviors, while governments and businesses invest heavily in infrastructure and tourism development. This dynamic market reflects both recovery and transformation, with plenty of opportunities for further expansion.
Free research insights report: Southeast Asia prides itself on quick adoption of nascent technologies
Phocuswright’s Southeast Asia Travel Market Report 2023-2027 provides a comprehensive view of the Southeast Asia (Indonesia, Malaysia, Singapore, Thailand) travel market, including detailed market sizing and projections, distribution trends, analysis of major travel segments, key developments and more.
Get the accompanying Southeast Asia Travel Market Data Sheet 2023-2027
India Travel Market Report 2023-2027
The Indian travel market experienced strong growth in 2023, with gross bookings rising by 12% to $37.8 billion. This momentum is projected to continue, driven by rising travel international demand and higher prices. Online bookings are increasingly dominant, with growth expected to continue through 2027. Online travel agencies (OTAs) maintain a significant presence, particularly in the air and hotel sectors, with OTAs expected to gain market share over suppliers in the coming years. With its expanding middle class and robust economy, India’s travel landscape is set for sustained growth, presenting opportunities for both domestic and international travel providers.
Phocuswright’s India Travel Market Report 2023-2027 provides a comprehensive view of the India travel market, including detailed market sizing and projections, distribution trends, analysis of major travel segments, key developments and more.
Get the accompanying India Travel Market Data Sheet 2023-2027
These reports are part of the Asia Pacific Travel Market Report 2023-2027 series, which includes all of the following publications (available now or publishing soon):
- Asia Pacific Travel Market Report 2023-2027
- Australia-New Zealand Travel Market Report 2023-2027
- China Travel Market Report 2023-2027
- India Travel Market Report 2023-2027
- Japan Travel Market Report 2023-2027
- Southeast Asia Travel Market Report 2023-2027
- Northeast Asia Travel Market Report 2023-2027
- Asia Pacific Travel Market Data Sheet 2023-2027
Canada Travel Market Overview and Trends 2024
Canada’s travel market is evolving rapidly as it settles into a new post-pandemic normal. After a year of record-breaking growth, the market is transitioning to sustainable, single-digit gains amid strong traveler demand and shifting economic conditions. Digital sales channels are reshaping the landscape, with online bookings projected to capture 63% of the market by 2027 as airlines and hotels ramp up direct sales efforts. While inflation and rising costs present challenges, the sector’s resilience and innovative strategies—from mergers to new distribution tactics—underscore a promising outlook for Canada’s travel industry through 2027.
Phocuswright’s Canada Travel Market Overview and Trends 2024 provides a complete view of the Canada travel market, including detailed market sizing and projections through 2027, distribution trends, analysis of major travel segments, key developments and more.
Get the accompanying Canada Travel Market Data Sheet 2023-2027
10 insights that should be on your radar in 2025
2024 marked a year of solid global growth in the travel sector, with strong performance in APAC and steady gains in North America and Europe. The Middle East and LATAM continue to emerge as significant markets, albeit much smaller than the three regional powerhouses. Looking ahead, here are 10 key insights from the report that should be on your radar in 2025
Latin America Travel Market Data Sheet 2023-2027
Latin America’s travel market continued its recovery in 2023, with gross bookings rising 29% to $70.1 billion, driven by a robust rebound in domestic and international tourism. Mexico and Brazil continue to dominate in the region, accounting for over 75% of the market. Online bookings rose markedly, as consumer demand for digital travel planning soared across the region. The hotel and airline sectors led growth, and as Latin America’s internet access and e-commerce capabilities expand, the market is poised for further digital gains through 2027 despite ongoing economic and political challenges.
This data sheet provides quick and easy access to updated Latin America travel market sizing data and projections from 2021-2027, including online and total markets, segments and major distribution channels. Much of the data included here, along with expanded analysis, is also featured in Phocuswright’s Latin America Travel Market Report 2023-2027.
Australia-New Zealand Travel Market Data Sheet 2023-2027
The Australia/New Zealand travel market grew 21% to $35.6 billion in 2023, fueled by strong domestic demand and rising prices driven by inflation. Future growth is expected to moderate, as economic pressures and limited international flight capacity impact recovery. Online sales remain strong but are growing slowly, with supplier-direct channels gaining at the expense of OTAs. Despite economic challenges, travel remains a priority, with domestic travel thriving and international arrivals gradually improving.
This data sheet provides quick and easy access to updated Australia-New Zealand travel market sizing data and projections from 2021-2027, including online and total markets, segments and major distribution channels. Much of the data included here, along with expanded analysis, is also featured in Phocuswright’s Australia-New Zealand Travel Market Report 2023-2027.
The State of Startups 2024
The State of Travel Startups 2024
Phocuswright has tracked the digital travel startup landscape for over 15 years, and as of the time of publishing this report there are nearly 8,000 companies in our Travel Startups Interactive Database.
Free research insights summary report: A new era for travel startup investing
5 key findings from the report:
- Funding to travel startups dropped to nearly a 10-year low in 2023, coming in at $5.2 billion. Through the third quarter of 2024 (3Q24), funding rests at $4.3 billion, putting it roughly on track to be on par with 2023.
- 2023 marks by far the lowest activity on record when it comes to funding rounds completed.
- The next era of travel startup investment may look nothing like the last. Generative AI is expected to transform the travel industry as well as how companies operate, potentially shifting industry dynamics and reducing the need for funding in the long term.
- Funding to B2B-oriented companies in 2024 has overtaken B2C for the first time, reaching 51% of total funding as of 3Q24. This shift may be partly driven by clear use cases of generative AI in B2B areas like customer service, workflow automation and data analytics.
- Europe leads in regional funding share in 2024, driven by growth in mobility and corporate travel sectors, while the U.S. maintains a dominant position at the country level.
This analysis of travel startup funding covers companies founded since 2014 and includes funding rounds raised by these companies through the third quarter of 2024. Leveraging data from Phocuswright’s proprietary database as well as desk research and interviews, this report presents a comprehensive assessment and outlook for travel startups in today’s challenging environment. Specific topics covered include:
- Funding analysis by year, deal count and size
- Funding analysis by headquarter country and region
- Funding analysis by industry category
- Analysis of merger and acquisition activity
- Analysis of investor activity
- In-depth discussion of market forces driving investment trends
To explore the data behind this analysis, please check out the Travel Startups Interactive Database.
Across almost 800 exits tracked, the average time for travel startups to be acquired is 6.7 years from their founding.
The Impact of GenAI on Travel Startups
Phocuswright has tracked the digital travel startup landscape for over 15 years, and as of the nearly 8,000 companies are featured in the Travel Startups Interactive Database.
The emergence of generative AI (GenAI) is poised to revolutionize the travel startup ecosystem, creating unprecedented opportunities and challenges for entrepreneurs and investors. As startups adopt AI-driven technologies, traditional resource constraints in technology and staffing are dissolving, enabling leaner operations and accelerating innovation. However, this transformation could lead to increased competition and shifts in business models, marketing strategies, and distribution dynamics. Startups that adapt strategically to these changes, leveraging proprietary data and customer acquisition strategies, are positioned to lead this new era of travel innovation.
Free research insights summary report: 4 ways GenAI will impact travel startups
Key questions answered by this research include:
- How is generative AI reshaping the travel startup ecosystem and the way businesses operate?
- What opportunities and challenges does the rise of autonomous agents and LLMs create for startups and incumbents?
- How might travel distribution and booking processes change as AI-driven tools become mainstream?
- What strategies can startups employ to stand out amid heightened competition and shifting advertising dynamics?
- How will the changing role of AI influence travel startup funding and resource allocation in the coming years?
For a more comprehensive look at travel startups, check out The State of Travel Startups 2024 report and the Travel Startups Interactive Database.
Free research insights: $1.2T in online bookings by end of 2026
It’s gearing up to be a slow climb to new heights in 2025.
Travel’s global gross bookings are expected to increase from $1.6 trillion in 2024 to $1.72 trillion in 2025, marking a steady, but slower growth rate as the market matures.
And with the increasing adoption of online booking platforms, online gross bookings are estimated to reach $1.0 trillion in 2024 and climb to $1.2 trillion by 2026. By that time, nearly 65% of global travel gross bookings will be made online.
In the U.S., travelers chose to stay closer to home in 2024 compared to 2023, cautiously monitoring cost and discretionary spending in the upcoming year. In contrast, more European travelers are looking to explore internationally.
U.S. consumer traveler insights
U.S Consumer Travel 2024: Air
Phocuswright’s U.S Consumer Travel 2024: Air provides a snapshot of American travelers’ recent behavior and sentiment regarding air travel. Based on a comprehensive survey of United States leisure travelers, this report provides a range of data and analysis on the American consumer’s air travel behaviors and preferences, and what these trends look like over time.
Free research insights: 5 key findings on how American travelers shop and book air
Key research questions addressed by this research include:
- What role does social media play on transportation to destination decisions?
- What are the booking channel differences by age?
- How are air loyalty programs performing and influencing consumer choices?
- How do travelers feel about air travel in the near future?
The U.S. Consumer Travel 2024: Air report is part of the U.S. Consumer Travel Report 2024 series. All products in this suite include:
- U.S. Consumer Travel Report 2024
- U.S Consumer Travel 2024: Air
- U.S Consumer Travel 2024: Lodging
U.S. Consumer Travel Report 2024
Phocuswright’s U.S. Consumer Travel Report 2024 series provides a snapshot of American travelers’ recent behavior and sentiment regarding travel.
Based on a comprehensive, updated survey of United States leisure travelers, this overview report provides a range of data and analysis on the American consumer travel market, and what these trends look like over time.
Key research questions addressed by this research include:
- What are the future expectations and anticipated travel plans of U.S. travelers?
- How do travel trends vary year over year and across different age groups?
- What do U.S. travelers and their trips look like?
- What activities do U.S. travelers engage in during their trips?
- How do U.S. travelers book different trip components, and what factors are most likely to influence their booking decisions?
Also included in this series are two special carveout reports, which place greater focus on American travel consumers' interactions with the Airline and Lodging segments, respectively.
Shorter Trips, Lower Spend: Are U.S. Travelers Feeling the Pinch?
The travel industry has made a remarkable recovery post-pandemic, with shifts in traveler behavior that marked 2021 and 2022 as years of “revenge travel” and the rise of “bleisure” More adults prioritized leisure trips than ever, driving record-setting travel demand.
However, over the past year, inflation, rising service costs, and mounting credit card debt have reshaped the spending habits and priorities of U.S. consumers. The Consumer Price Index (CPI) rose 2.4% for all items in the 12 months ending September 2024, while interest rates remained high, impacting discretionary budgets. Geopolitical conflicts, including the ongoing Ukraine-Russia war and unrest in the Middle East, add to the global uncertainty, and the U.S. presidential election loomed on the horizon at the time the survey was conducted.
Key questions addressed by this article include:
- How have travelers’ discretionary spend priorities shifted?
- In what ways, if any, have traveler behaviors changed over the past 12 months?
- To what extent are travelers willing to incur debt in order to travel?
Europe Consumer Travel Report 2024: Major Markets Compared
Travel in the U.K., France, Germany, Italy, and Spain has increased over the past year. Booking decisions are often influenced by factors revolving around value and price. Social media use is also on the uptick when planning and searching for trip ideas. Looking ahead, most Europeans have a positive outlook for future travel plans, though these may be mired by prolonged rising costs and some sustainability concerns.
This report is based on a comprehensive survey of U.K., France, Germany, Italy and Spain consumers who traveled in 2023, along with those who planned to travel in 2024. It compares these European markets’ consumer trip-planning and purchasing behavior, including the impact of emerging technologies on the travel planning process, as well as their expectations and goals for travel looking forward.
Key questions answered include:
- What does the average traveler look like? How many trips do they take per year, where do they go, with whom, for how long, and how much do they spend?
- What resources - online and offline - do travelers use to research, plan and book their trips?
- How do preferences differ across age groups?
- What influences the decisions travelers make about various elements (e.g., air, hotel and activities) of their trips?
- What role does social media play in consumers’ travel planning activities?
- What is the sentiment towards future travel? What changes, if any, do travelers intend to make regarding their future travel?
For more on the dynamic European consumer travel landscape, check out our Europe Consumer Travel Report 2024 Series, a collection of reports that delve into further detail on key European markets.
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