How shifting budgets, changing loyalty trends and value-driven pricing are reshaping the industry
Feb 28, 2025
The European travel industry is undergoing significant changes as traveler behavior and budgets continue to evolve. While some travelers are increasing their spending, others are cutting back due to economic pressures. Skift Research’s latest report, ‘European Travel Insights: Unveiling the Top Trends for 2025,’ highlights key shifts shaping the industry, underscoring the need for value-driven pricing, changing loyalty dynamics, and strategic adaptability for travel brands.
Key takeaways
- Divergent spending trends: 39% to 48% of travelers report no change in their travel budgets, but affordability remains a concern. 28% are increasing their travel budgets, while 20% are reducing them. Many travelers value flexibility, with 24% spending more on refundable bookings and 33% valuing travel protection;
- Value-driven pricing is key: Refundable bookings, travel insurance and strategic discounts are becoming essential to win over cautious travelers. Brands that balance affordability with premium experiences will gain a competitive advantage;
- Rising travel budgets – a cost-driven reality: Travel budgets are rising modestly, driven primarily by rising costs rather than discretionary spending. Spain and Germany are leading the trend, with 65% of travelers expecting to spend more, compared to 58% in the UK;
- Loyalty trends are changing: Airline loyalty is stronger than hotel loyalty, with UK travelers having the highest airline loyalty at 66 (European average: 62). Hotel loyalty remains weaker, with a European average of 53. Traditional loyalty programs are less effective – brands need to offer personalized, experiential rewards to build stronger emotional connections;
- Adapting to market shifts is key: Travel brands must understand who spends, how they spend, and why they switch brands. Companies that prioritize flexible, consumer-centric solutions will thrive in the evolving marketplace.
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