AI, identity and demand shifts take center stage as industry leaders face a rapidly changing travel world | News

Day 2 at Phocuswright Europe started with a clear message: the forces reshaping travel are increasing, and the industry must adapt at the same speed. From AI-driven distribution battles to digital identity pilots, changing demand patterns and new loyalty expectations, the day delivered a steady stream of insights, debate and practical direction for the year ahead.

Travel demand remains resilient as AI reshapes the purchasing journey

Phocuswright’s Pete Comeau and Mitra Sorrells opened Day 2 with a data-rich look at the global travel economy, underscoring the industry’s resilience in the face of geopolitical tensions, economic pressures and rising traveler anxiety. Global gross bookings are on track to surpass $2 trillion by 2027, with Europe remaining one of the most valuable regions in the world. Yet more than a third of European travelers say they are more concerned about international travel than they were just a few years ago, creating a strategic challenge for every company in the room.

AI was in the middle of the morning frame. Traveler usage is surging, executives are prioritizing investments, and agent systems are beginning to influence the way discovery, consideration, and booking unfold. Comeau also announced the launch of Phocuswright’s AI Research Assistant for its Open Access subscribers, previewing the day’s themes: distribution battles, product marketing in an AI-first world, digital identity, changing demand, and the evolving role of loyalty and trust.

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

James Waters, Chief Business Officer of Booking.com, joined Pete Comeau for a wide-ranging conversation about AI, demand signals and the realities of operating on a global scale. Waters reflected on his 17-year journey with the company and the human psychology underlying 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, leaving a significant gap between curiosity and action.

Waters highlighted strong global demand, with luxury proving to be the most resilient segment during the disruption. Booking times are getting shorter, domestic travel is increasing and demand for long-haul flights is declining in some markets. He also addressed regulatory burdens, especially in Europe, and the need to balance transparency with innovation. On AI channels, Waters described the current environment as “signal collection” rather than volume, with LLMs teaching consumers to view itineraries as unified entities rather than disconnected components. The challenge, he said, is making smart bets, maintaining humility and knowing when to pull back.

Marketers face the messy middle of AI adoption

That morning’s marketing panel explored how AI is reshaping discoverability, content and loyalty. Simon Matthews, Group CTO at HomeToGo, described the rapid shifts in inbound discovery patterns and the need to translate the AI ​​hype into real value for hosts and travelers. Cendyn’s Fritz Müller highlighted 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 fundamental data hygiene needed 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 evolving toward invisibility, with the brand simply knowing the traveler and anticipating their needs. AI can enable one-to-one marketing, but only if data silos break down. Independent hotels can benefit from the leveling effect of AI, provided they are organized and agile. The panel concluded with a discussion on direct bookings, with the consensus that hotels can drive more traffic if they use first-party data effectively.

European travelers want less hassle, more confidence and real control

Phocuswright’s research director Alicia Schmid presented new research showing that European travel demand remains high, but travelers are making decisions at the intersection of convenience, trust and control. Planning windows are shrinking, online booking is nearly universal, and travelers are delegating an increasing share of the research burden to platforms and tools. AI use is increasing, but trust remains layered, with human recommendations, reviews and well-known brands still trumping AI-generated content.

Digital identity emerged as an important theme. Awareness of 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 affecting comfort levels in destinations, with long-haul travel outside Europe facing more hesitation. Schmid concluded with four imperatives: reduce effort, strengthen trust signals, use AI for specific tasks, and ensure data and identity tools provide real control.

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

Pablo Laucirica outlined Microsoft’s vision of the three networks 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 the way travel is discovered and booked, with agents performing end-to-end tasks on behalf of users. To prepare, companies should ensure their content is readable by agents, avoid bot blocking, and optimize for generative engine visibility.

In the panel discussion, Perk’s Nikita Miller and Revolut’s Stanislav Bondarenko agreed that agentic systems are coming, but that trust and human oversight remain essential. Business travel can help agents adopt faster because of structured data and repetition patterns, but approvals and compliance still require human review. Bondarenko highlighted 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 officers make decisions. When asked how willing they were to have an AI book a full trip today, answers ranged from seven to nine.

Middle Eastern leaders parse resilience, recovery and the rise of domestic and religious travel

WiT’s Siew Hoon Yeoh led a dynamic conversation on the changing travel landscape in the Middle East. Wego CEO Ross Veitch described his cautious optimism following news of a possible ceasefire, noting that outbound travel has fully recovered while inbound travel remains sluggish. Almosafer’s Muzzammil Ahussain highlighted the region’s diversity, with Saudi Arabia showing exceptional strength in 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 the differences in AI usage patterns, with Asian travelers relying more on AI for destination decisions and European travelers using AI for early travel planning. The panel explored resilience in religious travel, the rise of domestic products in Saudi Arabia and the importance of trust during crisis responses, including Trip.com’s fast refund policy.

Airlines leaders are exploring how AI can improve connectivity without adding friction

The Airline Connectivity panel, moderated by Phocuswire Editor-in-Chief Linda Fox, explored how AI is impacting the distribution, merchandising and construction of multi-segment travel. Travelport’s Juan Manuel Agudo Carrizo discussed deterministic questions, 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 complexities of building connected journeys and noted that adding AI to interline logic proved more difficult than expected.

Tanner Huysman of Vueling Airlines described how Vueling uses AI to improve self-service, personalize communications and understand traveler intentions. He emphasized the need for caution in hyperpersonalization, especially when intent signals can be ambiguous. The panel agreed that AI can increase relevance, but only if airlines maintain strong core product structures and avoid friction when personalization misses the mark.