Market Trends

🌏 Japan's travel market achieved US$94.2 billion in gross bookings in 2025, marking an 8% increase, with a record 42.7 million inbound arrivals. Outbound travel was 14.7 million. A stronger yen validated growth, shifting Japan from an outbound market to focusing on inbound tourism. Policymakers now view tourism as crucial for the economy, emphasizing value over volume, regional distribution, and handling success-related challenges.

📈 U.K. online travel agencies (OTAs) are projected to reach £10.3 billion in gross bookings by 2025, marking a record high. However, OTA market share continues to decline for the third year. Supplier-direct share is expected to grow slightly from 78% to 81% by 2029. The distribution battle is stabilizing, with hotels as the exception where OTAs and direct bookings maintain equal competition. Phocuswright's 2026 report analyzes these trends and potential changes.

🏨 PPHE Hotel Group Ltd, founded in 1989 and listed on the London Stock Exchange, operates 39 hotels with about 9,000 rooms and 8 campsites with around 6,000 units in Europe and beyond. In 2025, the group achieved revenues over €500 million, a 5.3% increase from the previous year, and a gross operating profit exceeding €160 million. The group's real estate value is over €1.2 billion. David Fattal won the 2024 Hospitality-ON Grand Prix for expanding the Fattal Group to over 300 hotels.

🌎 Mexico outperformed the U.S. and Canada in Travel & Tourism in 2025, with its GDP growing by 1.8%, surpassing the U.S. at 0.9% and Canada at 1.2%. Mexico's international visitor spending rose 3.5%, while the U.S. and Canada saw declines of 4.6% and 3.5%, respectively. Visitor arrivals in Mexico increased by 6.1%. The 2026 FIFA World Cup is projected to boost Travel & Tourism GDP growth by 6.4% in Canada, 2.4% in Mexico, and 2.1% in the U.S.

🌎 In 2026, Central and South America's Travel & Tourism sector is set to surpass the global average, with a 4.1% GDP growth, compared to the global 3.2%. International visitor spending in the region is expected to rise by 7.8%. Ecuador leads with an 11.6% GDP growth, while Venezuela's sector grows by 33.2%. Globally, Travel & Tourism will contribute $12 trillion, or 9.9% of GDP, supporting 376 million jobs. This growth highlights increased domestic demand and lower geopolitical disruptions.

🏨 Lifestyle hotels are the fastest-growing sector in global hospitality, driven by post-pandemic demand for experiential travel. In Asia Pacific, growth is rapid yet under-penetrated, with Gen Z preferring these hotels for their cultural and technological appeal. Despite rising construction costs, CBRE suggests conversions as a cost-effective investment strategy. As Gen Z's spending power grows, lifestyle hotels are set for sustained expansion. Gen Z is the largest demographic in the region, influencing market trends significantly.

📚 Major hotel groups have increased margins and customer ownership thanks to direct booking strategies over the past decade, as of May 28, 2026. Despite stable OTA market share, hotels benefit from lower commission costs and enhanced loyalty programs. U.S. business travel brands see more direct bookings compared to leisure properties internationally. AI travel assistants might impact both hotel and OTA visibility, posing a future distribution challenge.

🏨 Top-quartile branded assets in 2026 are refinancing into competitive five-year takeouts, while weaker assets struggle with lenders. Rate strategies from 2023-2024 now create disparities in profit, with select-service hotels outperforming full-service. Midweek business rebounds, driven by secondary markets' reshoring and healthcare. PIP costs have inflated 25-40%, and insurance renewals increased by 20-40%. Construction starts are below historical averages, protecting existing assets. Strategic refinancing and asset management are crucial for 2026's market, sorting hotels into "haves" and "have-nots.