On Tuesday at a conference in Berlin, IHG’s CEO outlined how the hotel group is navigating ongoing uncertainty: "Uncertainty is the only certainty we have," he said. His CEO peer at Hyatt used his stage time to explain how the company is using AI on its site to influence travel decisions before a traveler chooses a destination. Back in the U.S., New York City saw a drop in international tourists last year – seven out of the city’s top 10 international markets declined.
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CHART OF THE DAY
The other side of the “K-shaped” economy is that, outside of the luxury market, travelers across the world are moving toward value-oriented behavior. This is a reaction to high inflation and affordability challenges.
When faced with tighter wallets, turning to cheaper flights is the first choice for most. Less expensive destinations or shorter trips are also commonly employed affordability tactics.
With worries about politics, affordability, and the health of the economy on the mind of many travelers, we expect some trading down in 2026.
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