2024 was another superb year for the travel sector; while the steep post-pandemic recovery of 2022/23 leveled out, signalling a return to normalcy, we expect growth to continue throughout 2025 as travel remains a priority for consumers.
We are seeing a few trends emerge for 2025 from our global client base of travel operators, accommodation providers, travel agents, and DMCs. Personalized experiences will be in demand. In the pursuit of these personalized experiences, luxury travelers are valuing travel agents and their services more than ever. We are also seeing destinations in Northern Europe, Scandinavia, and Asia receive increased interest from travelers.
The companies that will be best placed to take advantage and drive growth will be those that have invested in continuing to improve their tech stack. Here is what will be big in 2025.
1. “Gig-tripping” for live experiences in demand
Live special events will also drive tourism as travelers, particularly younger generations.
“Gig-tripping” - the act of booking travel around experiences such as concerts (but also sports fixtures and other live events) - while not a new concept, exploded in 2024 as major cities across the globe benefited from tourism booms while playing host to Taylor Swift’s Eras world tour and, for Paris, the Olympics.
This didn’t come as a surprise to us. In our 2024 luxury travel report, we noted that 85% of luxury travelers said they like to plan travel around special events, rising to 95% for Gen Z/Millennial travelers. So, with some of the world’s biggest artists, including Oasis, Billie Eilish, and Coldplay, having already confirmed world tour dates for 2025, gig-tripping is likely to continue as a leading driver for travel.
From bucket list trips and adventure to sampling the best cuisine, or achieving a general feeling of relaxation and wellbeing, experiences will continue to be important to luxury travelers in 2025.
Travelers wanting authentic, meaningful experiences will favor more exotic, less populated destinations, particularly if they are off the beaten track. For some, the journey will be as important as the destination, but, crucially, they will look for itineraries tailored to their own, individual values and interests, with local guides to help them build a deeper connection with the places they visit.
2. Macro-factors to drive increased interest in Scandinavian and Southeast Asian destinations
Economic, environmental, and political factors have always impacted destination popularity; this will be no different in 2025, and we anticipate interest in destinations to change somewhat.
The Japanese travel sector looks set to continue benefiting from interest driven by the Yen’s weaker FX position; the wider APAC region will also benefit, as both international and domestic luxury travelers are enticed by new luxury hotel offerings, more lenient visa requirements, and more flight options.
Global warming is also impacting destination choice. Heatwaves are becoming more common, and popular destinations in Southern Europe are recording temperatures over 100℉ for most of their summer peak season. As a result, more luxury travelers are turning to the stunning natural beauty, deserted beaches, and warmer (but comparatively milder) summers of so-called “shoulder season” countries in Scandinavia to avoid the uncomfortably hot temperatures and crowds further south.
3. Luxury travelers turn to travel agents/advisors more than ever
DIY is one way to personalize travel. But the process of researching and booking all the different elements of a trip - creating an itinerary and ensuring operators are reputable - can be time-consuming. This is where luxury travel agents and DMCs come into their own.
With their knowledge, experience, and relationships, they craft itineraries for their clients that include the best travel arrangements, accommodations, guides, and tours. But, importantly, by seeking to understand their clients’ motivations and interests, agents and DMC advisors equip themselves with the insight to deliver the most emotionally nourishing experiences.
Luxury travelers themselves recognize the value agents and DMCs bring to the table. In our 2024 luxury travel report, 93% said they believe using travel agents is the best way to create personalized travel experiences. It also showed that more Gen Z and Millennial travelers, compared to their older counterparts, said they couldn’t imagine traveling without a travel agent, indicating how vital travel advisors are, and will continue to be, to the luxury traveler.
4. Success will be driven by continual improvement and tech stack investment, solving payments critical
Now that post-pandemic growth in the travel sector has stabilized and returned to “normal,” significant growth will only be achieved by companies that invest in their infrastructure to simplify processes that cause friction for both travelers and providers alike. In doing so, not only will these companies improve customer experience, they will be able to act quickly to capitalize on opportunities for growth.
From our 2024 luxury traveler research, we know that most luxury travelers want an easy way to pay for different parts of their trip at once. But we also know that most have at least one pain point when trying to do so - whether they have concerns about payment security, difficulties with unexpected fees/exchange rate confusion, or they lack local payment options (currency or payment method) to pay their bill.
We also know, from our travel provider research (released in late 2023) that providers find accepting international payments difficult. That report showed that only one-third of providers said taking international payments was very easy. Outgoing payments are also causing problems, with over 80% saying they wished they had a better way to make payments to their agents and vendors.
Payment issues impact operations by causing process inefficiencies, leading to confirmation delays and a poor customer experience. By finding a better way to handle payments, including accepting payments in a customer’s local currency or making vendor and commission payments simpler, travel businesses will see operational efficiencies and create the conditions needed to drive growth.
Find out more
- Learn how Flywire has saved Master Liveaboards time and money, driving growth by improving payments
- Discover how luxury DMC Made for Spain and Portugal simplified payments to improve their customer experience while offering optionality
- Read how luxury safari company, Hidden Africa uses Flywire to provide simple, secure and speedy payments for clients
- Discover how Flywire solves payments for travel companies across the globe