As we head into 2026, one theme cuts across every dataset: travel demand is holding, but it’s more deliberate, selective, and uneven. The opportunity isn’t about reigniting interest; it’s about converting intent into bookings in a confidence-driven market.

Domestically, most travelers remain employed and active, but optimism is fragile. Budgets are tightening, planning windows are shortening, and travelers are taking fewer trips, but they’re still traveling. Internationally, recovery is far from guaranteed, and competition for inbound travelers is intensifying. On the supply side, hotel performance continues to normalize, with clear winners and laggards by segment.

For destinations, 2026 is shaping up to be a year of conversion over momentum. Clear value, relevance, and timing will matter more than broad inspiration.

Travel Trends & Forecast

How Destinations Can Win in a More Selective Travel Market

According to Future Partners’ January 2026 State of the American Traveler study, U.S. travelers are entering the year with cautious confidence, not outright pessimism, but far from optimism. Only 31.3% say they are financially better off than a year ago, and just 43.9% expect to be better off in the next 12 months, down five points year over year. Nearly half of Americans expect a recession within six months, and half report being more careful with their spending.

That caution is reflected in forward-looking intent. Only a quarter of Americans expect to take more leisure trips in the next year, and 29.5% expect to spend more on travel. The average annual leisure travel budget has declined 6.6% YOY to $5,511.

Yet recent behavior tells a different story: 68.6% of Americans took an overnight leisure trip in the past month, and 50% took a VFR trip, both up year over year. Travelers still expect to take an average of 3.8 leisure trips in the year ahead, with higher-income households planning significantly more travel than lower-income groups. Source: Future Partners

What this means for destinations:

• How destinations should respond: Shift from broad inspiration to decision-driving messaging. Travelers aren’t canceling trips; they’re justifying them. Lead with specific experiences, seasonal relevance, and clear reasons to travel now, not someday.

• Shorter planning windows (roughly 11 weeks) mean heavier emphasis on mid- and lower-funnel tactics. Increase spend closer to travel dates, prioritize retargeting and in-market audiences, and lean into event- and moment-driven demand like the big soccer line-up this summer. 

Analytics trends to watch in your Datafy dashboard:

1. Individual audience segments - which are having the most impact?
2. Engagement and repeat visits among higher-income households and recent travelers

Together, these signals will matter more than top-line reach as destinations work to convert cautious intent into actual trips.

Travel Pricing

Travel Is Getting Cheaper—But Confidence Is the Real Barrier

The U.S. Travel Association’s Travel Price Index shows a notable shift: overall travel prices are down 0.8% year over year, driven by declining airfares and moderating hotel rates. This comes even as broader inflation continues to pressure household budgets.

The implication is critical. If travel prices are easing while consumer caution remains elevated, cost is no longer the primary obstacle. The real barrier is confidence and justification—why this trip, why now. Source: U.S. Travel Association

What this means for destinations:

• How destinations should respond: Translate easing prices into clear, locally relevant value. This is a strong moment to highlight resident and regional offers—for example, in-state or local resident rates similar to California-resident hotel pricing. When international visitation is soft, encouraging nearby travelers to rediscover their own backyard can stabilize demand.

• Lean into drive-market and short-haul messaging that reinforces ease, proximity, and affordability. Promote shoulder-season value, flexible stays, and bundled experiences rather than blanket discounts. Messaging should make the decision feel low-risk and smart, not cheap.

Analytics trends to watch in your Datafy dashboard:

1. Growth of in-state, regional, and drive-market visitation
2. Conversion rates tied to resident or regional offers
3. Shifts in booking windows and length of stay among domestic travelers

Used well, easing travel prices create a window to activate local and regional demand, especially where international visitation remains uneven, by reinforcing value, convenience, and confidence.

International Visitation

U.S. International Demand Lags Global Recovery

Despite global tourism spending growing 6.7% in 2025, foreign visitation to the U.S. fell by roughly 6%, with international visitor spending down an estimated 7%. Europe and Asia captured a growing share of global travel, while the U.S. underperformed. Source: The Economic Times

What this means for destinations: International recovery cannot be assumed in 2026. Destinations will need to compete aggressively by prioritizing high-intent markets, simplifying travel narratives, and clearly articulating unique value, while relying on domestic and drive markets for stability.

Canada: Declines Persist, Importance Remains

Canadian travel to the U.S. remained sharply down in 2025, with overnight visitation off 22.1% YTD. Land travel declined more than 30%, while air travel proved more resilient. Younger, higher-value travelers ages 25–39 continue to lead demand, with spring and early summer 2026 showing the strongest intent. Source: XBorder Research

What this means for destinations: Canada remains the most important international market by volume, but recovery will require active competition. Air-accessible markets, peak-season messaging, and clear value and ease-of-travel narratives will be essential.

Hotel Performance

Normalization, Divergence, and the Mid-Market Squeeze

U.S. hotels recorded their first full-year declines in occupancy and RevPAR since 2020. National occupancy fell to 62.3%, and RevPAR declined 0.3%, while ADR grew modestly (+0.9%). Performance continues to vary widely by market, with New York and San Francisco outperforming while Las Vegas and Houston lagged.

At the segment level, the split is becoming more pronounced and more consequential. Luxury pricing remains high and continues to attract affluent travelers willing to pay for experience. Economy options remain relatively affordable. The pressure point is the mid-scale and upper-mid-scale segment, where rates have climbed sharply and are increasingly out of step with traveler expectations.

This pricing dynamic is reshaping travel behavior. Travelers may still take trips, but they are adjusting how they travel, opting for shorter stays, tighter itineraries, and fewer add-ons to justify higher nightly rates. Sources: CoStar

What this means for destinations:

How destinations should respond: Plan for more trips with shorter lengths of stay. Messaging should spotlight itineraries that feel complete in fewer nights, emphasize must-do experiences, and encourage visitors to prioritize quality over quantity.

Promote shoulder nights, weekday travel, and multi-night value adds (not discounts) that encourage longer stays. Partnering with mid-scale hotels on experience bundles can help offset rate pressure while supporting local spend.

Analytics trends to watch in your Datafy dashboard:

1. Changes in average length of stay by hotel segment
2. Day-spend and trip-spend patterns across attractions, dining, and retail
3. Conversion differences between mid-scale, luxury, and economy traveler cohorts

While shorter stays may not materially hurt hotel room demand, they do impact destination economics. Fewer nights typically mean fewer meals, fewer attractions visited, and less retail spend, making it critical for destinations to actively defend length of stay, not just visitation.

Economic Context

Employment Holds, Caution Grows

The U.S. labor market remains stable but clearly cooler. Unemployment sits at 4.4%, while job growth slowed sharply at the end of 2025. Inflation remains elevated at 2.8% YOY, and interest rates are expected to stay higher for longer.

Sources: Reuters

What this means for destinations: Travel demand isn’t collapsing, but it is becoming more selective. Travelers are employed, yet cautious, reinforcing the need for urgency, relevance, and clear value rather than passive inspiration.

Analytics trends to watch in your Datafy dashboard:

1. Shifts in booking hesitation and abandonment rates
2. Changes in advance purchase behavior
3. Performance differences between value-led and experience-led campaigns

Bottom Line

2026 is not about waiting for demand to rebound, it’s about earning the booking. Destinations that clearly answer why now and why here, stay visible closer to travel dates, and lead with value instead of discounts will outperform in a cautious but still-traveling market. 

Curious how these trends are showing up in your destination? See how traveler intent and conversion signals are shifting in your market and where opportunity exists in 2026 with Datafy. Book a demo.