For years, the travel and hospitality sector has been navigating a quiet but important disconnect. Demand remains visible – airports are busy, hotels are full and travel continues to play a central role in consumers’ lives – but the logic guiding travel decisions has shifted.
Rather than pulling back, consumers are becoming more selective, applying a sharper value lens and prioritising differently when they travel. What matters now is not how much people travel, but what they are willing to prioritise when they do.
Our latest Teneo Travel, Leisure and Hospitality survey of 1,500 UK and U.S. consumers reveals not a retreat from travel, but a reprioritisation. Six insights from our research point to a consumer that is more selective, pragmatic and structurally segmented than headline demand figures suggest.
1: For under 45s in the UK, travel isn’t a luxury – it’s essential
Among UK consumers under the age of 45, leisure travel has crossed a psychological threshold. 63% of this cohort now view it as an essential expense, on par with rent, utilities and other fixed costs. That perception drops sharply among older age groups, underscoring a clear generational divide.
For younger consumers, travel has become tightly bound to identity, wellbeing and self-definition. This is a generation that has grown up with low-cost carriers, flexible work and constant digital connectivity. Mobility is not aspirational; it is embedded. As traditional milestones such as home ownership and early family formation are delayed or feel less attainable, experiences increasingly absorb both emotional and financial priority.
This reframing helps explain why demand among younger travellers has remained resilient despite inflation, rising interest rates and cost-of-living pressures: travel is not what they cut first. Looking ahead, generational wealth transfer may further reinforce this dynamic, as inherited assets increasingly support discretionary spend.
For the industry, this points to structurally more durable demand than historical leisure models imply, but only for propositions that resonate with values around fairness, flexibility and perceived value.
2: The staycation is not a hangover – it’s the backbone of demand
International travel may capture attention, but domestic travel delivers volume. Nearly 40% of planned leisure trips in the UK and close to 60% in the U.S. remain domestic. This is not a temporary post-pandemic artefact; it is a structural feature of how people travel today.
Younger travellers are layering travel types rather than substituting. International trips are aspirational and intentional, while domestic trips are shorter, more frequent and often driven by convenience or social connection. For families aged 35–44, the staycation dominates almost by necessity, shaped by school calendars, time scarcity and budget discipline.
Even older travellers, despite greater flexibility and disposable income, anchor a large share of trips closer to home, where familiarity, comfort and risk management influence decision making.
The commercial implication is simple but often overlooked: domestic travel underpins cashflow stability. Brands that treat staycations as secondary risk ignoring the most predictable, repeatable source of demand in the system.
3: Gen Z hasn’t abandoned hotels – but it has redefined what they compete with
The future traveller does not think about accommodation the way the industry does. Among 18–24-year-olds, 56% now prefer Airbnb over traditional formats, a signal driven not only by price, but by perceived control, identity and flexibility.
For Gen Z, accommodation is part of the lived travel experience, not a service layer. They prioritise inhabiting space – valuing neighbourhood immersion, shared areas and personalisation over standardisation.
As a result, traditional hotels increasingly feel transactional, with competition extending beyond other hotels to entirely different ways of occupying space. This does not make hotels obsolete, but it does raise the bar: emotional relevance must be earned.
Brands that combine high-quality assets with flexibility, local authenticity and personalisation are best positioned to recapture loyalty as this cohort ages.
4: Experiences matter – but they don’t drive budgets
The industry has spent a decade talking about the ‘experience economy.’ Yet when consumers allocate travel budgets, experiences rank well below accommodation quality and trip duration in the spending hierarchy.
This does not mean travellers no longer care about experiences. Rather, experiences tend to be prioritised later, once the fundamentals of the trip are locked in. In a financially constrained environment, consumers prioritise certainty – booking accommodation they trust, limiting travel time and opting for trips where costs and logistics feel predictable.
Accommodation has become the emotional centre of the trip. A strong stay can compensate for a quieter destination; a weak one can ruin even the most exciting location. Similarly, the preference for longer stays over more frequent trips reflects a desire for time richness rather than constant movement.
For operators, this suggests a reframing: accommodation quality, travel convenience and trip duration are the product. Experiences enhance a strong core offer, but they rarely rescue a weak one.
5: Price and location dominate everything else
When selecting accommodation, consumers overwhelmingly prioritise price and location. Factors once considered differentiators – style, amenities and even reviews – now sit firmly in second place.
This reflects both sustained financial pressure and a reversion to long-standing travel decision drivers. Demand remains resilient but increasingly conditional, with travellers shortening trips, shifting off-peak, staying closer to home, and trading down to make budgets work. Even higher-income consumers are applying a sharper value lens.
For brands, this signals a structural shift away from experience first messaging toward relevance and affordability. Transparent pricing, clear value articulation and flexible cancellation policies remove more friction than aspirational branding alone.
6: Sustainability hasn’t disappeared – but it rarely closes the deal
Sustainability ranks lowest among primary factors of accommodation choice, cited by just 22% of respondents. The generational picture is nuanced: concern peaks among 25–44-year-olds and drops off sharply among younger and older cohorts.
Among younger travellers, this appears less like indifference and more like fatigue. Economic pressure, climate message saturation and scepticism around greenwashing have eroded the translation of values into action.
The lesson for the industry is not to abandon sustainability, but to stop leading with it. Sustainability now functions as a baseline expectation, not a booking trigger. It must be embedded credibly into the product without compromising price, convenience or quality.
What this means for leaders
The travel market in 2026 is not defined by whether people want to travel, but by what they are willing to prioritise. Age increasingly acts as a proxy for mindset rather than life stage, and a one size fits all strategy no longer works.
Leaders should be asking:
- Where is our demand truly structural, and where is it conditional?
- Are we optimised for volume and frequency, or just aspiration?
- Do our propositions build confidence in spend, or assume discretionary indulgence?
- How do we build trust and loyalty in this dynamic travel environment?
Travel is still happening. But the winners will be those who recognise that relevance, value and emotional alignment now matter more than ever.
If demand hasn’t gone away, but assumptions have changed – which parts of your strategy are still built for a world that no longer exists?