Amid an uncertain world, travelers shift plans but not intent

The travel economy this year is defined by one word: adaptability.

Amid geopolitical tensions and higher fuel prices, consumers and businesses are showing how they are changing their travel behaviors in response to a constantly changing world, according to the Mastercard Economics Institute’s latest edition of its annual travel report, which published Tuesday.

“We are in a world of high uncertainty and have been for some time,” said Michelle Meyer, Mastercard’s chief economist. “While there has been volatility, we continue to see healthy spending on travel across consumers and businesses.”

The ongoing war in the Middle East is the latest of many geopolitical shocks the world has experienced recently. Throughout the past six turbulent years since the pandemic, people have consistently exhibited a desire to travel, Meyer noted, and supportive underlying economic conditions could ensure that trend continues.

Consumers are adapting by reorienting their destinations, timing, budgets and priorities as dynamics keep changing, the report found.

This year’s report, titled “The new travel equation: Macro, machines, motivation,” breaks down trends across three main topics: economic forces, AI’s influence on travel and people’s personal priorities when traveling.

Meyer said the global economy has remained strong, labor markets have been healthy and wage growth has largely outpaced price inflation — dynamics that have supported the continued strength in tourism and travel.

Digging deeper beyond those headline trends, the story becomes more nuanced due to geopolitical forces and foreign exchange rate swings. Several countries with appreciating currencies saw travel spending decline, in some cases substantially, as affordability concerns kicked in for travelers looking for more attractive exchange rates. The reverse also holds, where travelers looking for value will seek destinations with weaker currencies. 

Meanwhile, business travel is shifting in other ways. Looking at Mastercard’s aggregated and anonymized data across several markets, MEI found several cities in India are gaining ground in corporate travel. Hyderabad and Bangalore, respectively, took the number three and four spots on MEI’s list tracking corporate travel momentum. Abu Dhabi took the top rank, showing the greatest acceleration in corporate travel relative to leisure, though these rankings were based on 2025 data, prior to the conflict in the Middle East. The cities dominating corporate travel momentum are those with strong IT and AI focus, a clear signal for the path ahead for the global economy.

The growth of generative AI platforms has broadened what travel experiences people are pursuing.

Paying subscribers of these AI services have used these tools to move past generic destinations and instead visit locales that are both rich in experiences and speak directly to their interests, such as historical sites, emerging wine regions and wellness-focused resorts.

AI has also accelerated the discovery of so-called “dupe destinations,” which are typically more affordable, less busy and offer similar experiences as more popular hotspots.

In both these cases, people are empowered by the information they’re getting from AI to adapt their travel plans in a variety of ways.

The report found that AI subscribers are spending more on travel than non-subscribers. While this could be a function of demographics or income differences — AI users tend to skew younger and more affluent — it could also reflect the increase in travel interest and opportunities that come with leveraging AI. 

What people do when traveling tends to vary based on where they are and where they come from.

The report highlighted how spending patterns are remarkably consistent over time for tourists from different countries. In Japan, for instance, visitors from the U.K. tend to spend more on the rail network, while visitors from Singapore focus more on shopping. In another example, MEI’s research found that 28% of global tourists’ budgets go to retail when in the U.S., but visitors from Mexico outpace all others by spending 54% of their budgets on retail.

This trend shows that when the specialties of a destination fit the interests of specific visitor groups, the results show clearly in how tourists spend their money.

Amid all this uncertainty, travelers will continue to make careful decisions throughout the year, Meyer said. But it will come down to how and when people travel, not whether they do at all.

“The travel economy is ever changing,” she added. “The decision to travel will remain a function of geopolitical dynamics, a search for value and the personal motivations people have driving the decision to travel.”