AI, identity and demand shifts take center stage as industry leaders confront a fast‑changing travel

Day 2 at Phocuswright Europe opened with a clear message: the forces reshaping travel are accelerating, and the industry must adapt with equal speed. From AI‑driven distribution battles to digital identity pilots, shifting demand patterns and new expectations for loyalty, the day delivered a steady stream of insight, debate and practical direction for the year ahead.

Travel demand stays resilient as AI reshapes the path to purchase

Phocuswright’s Pete Comeau and Mitra Sorrells opened Day 2 with a data‑rich look at the global travel economy, underscoring the sector’s resilience despite geopolitical tension, economic pressure and rising traveler anxiety. Global gross bookings are on track to surpass 2 trillion dollars by 2027, with Europe remaining one of the world’s most valuable regions. Yet more than a third of European travelers say they feel more anxious about international travel than they did a few years ago, creating a strategic challenge for every company in the room.

AI sat at the center of the morning’s framing. Traveler usage is rising sharply, executives are prioritizing investment, and agentic systems are beginning to influence how discovery, consideration and booking unfold. Comeau also announced the launch of Phocuswright’s AI research assistant for its Open Access subscribers, and previewed the days themes: distribution battles, product marketing in an AI‑first world, digital identity, shifting demand and the evolving role of loyalty and trust.

Booking.com’s James Waters on trust, demand and the real AI adoption curve

Booking.com’s Chief Business Officer James Waters joined Pete Comeau for a wide‑ranging conversation on AI, demand signals and the realities of operating at global scale. Waters reflected on his 17‑year journey at the company and the human psychology that underpins both traveler behavior and organizational change. He noted that while 89 percent of travelers express interest in using AI for planning, only about 6 percent trust AI to make decisions, creating a significant gap between curiosity and action.

Waters highlighted strong global demand, with luxury proving the most resilient segment during disruption. Booking windows continue to shorten, domestic travel is rising, and long‑haul demand is softening in some markets. He also addressed regulatory pressure, particularly in Europe, and the need to balance transparency with innovation. On AI channels, Waters described today’s environment as “signal gathering” rather than volume, with LLMs teaching consumers to think about itineraries as unified entities rather than disconnected components. The challenge, he said, is placing smart bets, maintaining humility and knowing when to pull back.

Marketers confront the messy middle of AI adoption

The morning’s marketing panel explored how AI is reshaping discoverability, content and loyalty.  Simon Matthews, Group CTO at HomeToGo, described rapid shifts in inbound discovery patterns and the need to translate AI hype into real value for hosts and travelers.  Cendyn’s Fritz Müller emphasized the plumbing behind the scenes, noting that hotels must become readable and discoverable to meet AI’s content needs.  Penta Hotels’ Ksenia Tarasova highlighted the tension hotels face between wanting advanced AI capabilities and lacking the foundational data hygiene required to support them.

The group agreed that traveler expectations have not changed, but communication has. Guests want fewer clicks, fewer messages and more relevance.  Loyalty, they said, is moving toward invisibility, where the brand simply knows the traveler and anticipates needs.  AI can enable one‑to‑one marketing, but only if data silos break down. Independent hotels may benefit from AI’s equalizing effect, provided they are organized and agile.  The panel closed with a discussion on direct bookings, with consensus that hotels can win more traffic if they leverage first‑party data effectively.

European travelers want less effort, more trust and real control

Phocuswright’s Director of Research Alicia Schmid presented new research showing that European travel demand remains strong, but travelers are making decisions at the intersection of convenience, confidence and control. Planning windows are compressing, online booking is near universal and travelers are delegating more of the research burden to platforms and tools. AI usage is rising, but trust remains layered, with human recommendations, reviews and known brands still outranking AI‑generated content.

Digital identity emerged as a key theme. Familiarity with the EU Digital Identity Wallet is low, but intention to use it is high among those who understand it. Travelers want visible control over their data and clear benefits in exchange for sharing it. Geopolitical uncertainty is influencing destination comfort levels, with long‑haul travel outside Europe facing more hesitation. Schmid closed with four imperatives: reduce effort, strengthen trust signals, use AI for specific jobs and ensure data and identity tools deliver real control.

Microsoft outlines the rise of the agentic web as travel prepares for a new interface

Pablo Laucirica outlined Microsoft’s view of the three webs that will coexist in the coming years: the human web, the LLM web and the agentic web. He argued that agentic commerce will fundamentally change how travel is discovered and booked, with agents performing end‑to‑end tasks on behalf of users. To prepare, businesses must ensure their content is readable by agents, avoid blocking bots and optimize for generative engine visibility.

In the panel discussion, Nikita Miller of Perk and Stanislav Bondarenko from Revolut agreed that agentic systems are coming, but trust and human oversight remain essential. Corporate travel may adopt agents faster due to structured data and repeat patterns, but approvals and compliance still require human review. Bondarenko emphasized the power of transaction data for personalization and described Revolut’s voice‑enabled AI systems. The group discussed accountability, regulation and the need for clear guardrails when agents make decisions. When asked how willing they were to let an AI book a full trip today, answers ranged from seven to nine.

Middle East leaders dissect resilience, recovery and the rise of domestic and religious travel

WiT’s Siew Hoon Yeoh led a dynamic conversation on the Middle East’s shifting travel landscape. Ross Veitch, CEO of Wego, described cautious optimism following news of a potential ceasefire, noting that outbound travel has fully recovered while inbound remains sluggish. Muzzammil Ahussain of Almosafer highlighted the diversity of the region, with Saudi Arabia showing exceptional strength across domestic, religious and luxury travel.

Trip.com’s MD and VP International Markets Boon Sian Chai discussed the impact of new China‑Europe air routes and visa‑free policies, which are driving inbound growth. He also shared differences in AI usage patterns, with Asian travelers relying on AI more for in‑destination decisions and European travelers using it for early itinerary planning. The panel explored resilience in religious travel, the rise of domestic product in Saudi Arabia and the importance of trust during crisis response, including Trip.com’s rapid refund policies.

Airline leaders explore how AI can sharpen connectivity without adding friction

The airline connectivity panel, moderated by Phocuswire’s executive editor Linda Fox, examined how AI is influencing distribution, merchandising and the construction of multi‑segment journeys. Travelport’s Juan Manuel Agudo Carrizo discussed deterministic queries, zero‑moment‑of‑truth decision points and the role GDSs can play in adding value beyond traditional content pipes. David Gunnarsson, CEO of Dohop, reflected on the complexity of building connected journeys, noting that adding AI to interline logic proved harder than expected.

Vueling Airlines’ Tanner Huysman described how Vueling is using AI to improve self‑service, personalize communications and understand traveler intent. He emphasized the need for caution in hyper‑personalization, particularly when intent signals can be ambiguous. The panel agreed that AI can enhance relevance, but only if airlines maintain strong core product structures and avoid creating friction when personalization misses the mark.