Travelers are becoming more comfortable with AI and incorporating it into their trip discovery and planning processes, presenting an opportunity for travel companies to apply the technology for decision-making and customer experiences. However, the travel industry is still in an experimental phase and could be missing user and revenue gains. To capitalize on travelers’ use of and confidence in AI, travel companies need to move from testing the technology to fully integrating it. That includes building traveler trust through transparency, investing in data infrastructure, and exploring consumer-facing AI agents.
Google is expanding its AI-powered travel planning and booking tools, introducing Canvas itineraries and broader agentic booking features directly within AI Mode in Search. The update brings real-time flight and hotel data, personalized recommendations, and streamlined reservations across major platforms, with full flight and hotel bookings coming soon. Google is also rolling out its Flight Deals tool globally. The shift toward surfacing these capabilities in Search should boost adoption and intensify pressure on travel companies that lag in AI-driven decision-making.
Airbnb and Instacart plan to launch a pilot program that would enable guests in select cities to order grocery delivery before and during their stays, per Bloomberg. The partnership is a win-win, offering Airbnb the chance to improve the guest experience, and giving Instacart an opportunity to expand its reach and boost ad revenues. As competition between delivery platforms heats up, deals like these are poised to become more common as companies look for new ways to win over customers.
Travel companies are cutting jobs to keep costs under control and adapt to softening US demand, part of a broader wave of layoffs. US employers set more than 153,000 job cuts in October, per Challenger, Gray & Christmas. Hotels and airlines have come under renewed pressure as demand moderates, costs remain elevated, and operational disruptions—including those tied to the current government shutdown—test their performance. The longer the shutdown lasts, the greater the risk of disruptions to holiday operations and travel. To stay resilient, companies can target international and more affluent consumers less affected by economic uncertainty, while cross-training airline and hotel staffers to beef up customer support.
The fourth quarter is shaping up to be a strong season for travel companies catering to affluent consumers—but an uncertain one for everyone else. From the perspective of the Big Four airlines—American, Southwest, Delta, and United—holiday demand looks strong. But hotel operators are warning of weakness as interest in US travel declines. And while affluent consumers are driving travel spending, much of that money is being spent on international trips. That’s small consolation for the many retailers and restaurants that are counting on domestic demand to make up for declining inbound tourism.
Airbnb opted against launching a third-party app integration with ChatGPT because it “didn’t think [the technology] was quite ready,” CEO Brian Chesky told Bloomberg. While the company hasn’t ruled out joining the platform, its measured approach contrasts sharply with the enthusiasm of competitors like Expedia and Booking.com. Airbnb is prudent to have reservations about OpenAI’s commerce capabilities. While chatbots could reshape travel discovery and booking, early reports indicate ChatGPT’s utility for now is hampered by a clunky, finicky interface that is more frustrating than helpful. Rather than forge commerce partnerships with AI companies, Airbnb is focused on making its service an indispensable travel resource to keep its platform sticky.
United Airlines is forecasting record-breaking Q4 profits as CEO Scott Kirby credits international travel and high-spending passengers for driving growth, with premium cabin and loyalty program revenues up 6% and 9% year over year. The optimism echoes Delta’s positive outlook, but the broader travel market shows strain: only 21% of US adults plan to travel this holiday season, according to Bankrate, down from 27% last year. As costs rise and options shrink, especially for younger travelers, the industry faces a widening divide—prospering at the top while losing price-sensitive consumers it can’t afford to ignore.
Delta expects another record-breaking holiday season as the airline’s affluent customer base spends big on domestic and international travel. However, the travel industry is in a far more uncertain state than Delta’s upbeat earnings suggest. Softening demand from low- and middle-income consumers and international visitors is weighing heavily on the airline and hospitality industries, while the government shutdown could also prove painful.
OpenAI is now allowing users to connect to select third-party apps within the ChatGPT interface. The integrations expand the chatbot’s utility while encouraging users to spend more time within the platform. Consumers may not yet be willing to make transactions within ChatGPT, but they are open to its recommendations. ChatGPT’s integrations with Expedia and Booking.com could transform how people approach trip planning, all while siphoning more traffic from Google—and familiarizing users with the idea of making more purchasing decisions with the help of AI.
United Airlines teamed up with Instacart to give its loyalty program members sweetened perks like free grocery delivery and bonus miles. The $0 delivery fee—what United calls a first for an airline—applies on orders placed just before, during, or shortly after a domestic flight. Loyalty program participants can also earn miles for setting up new Instacart+ memberships and for linking their United and Instacart accounts.The United-Instacart collaboration is more than just a marketing tie-up. It shows how companies are responding to the desire for more flexible loyalty programs and sets the stage for more cross-industry ties among retailers, travel companies, and other industries.
Budget hotel chains are facing the same turbulence as discount airlines, per Yahoo Finance. Lower-income travelers are pulling back while wealthier consumers trade up to more comfortable stays, pressuring budget hotels. Usually resilient in downturns, these companies face what Bank of America calls “structural” headwinds: lower-income travelers contending with slow income growth, weakening sentiment, and persistent inflation.Companies like Hyatt and Marriott have the cushion of diversified portfolios—and may even pick up business as wealthier travelers trade up. But others, such as Choice Hotels and Wyndham, don’t have that safety net. Their focus on the budget segment makes them more vulnerable, which is why Bank of America downgraded Choice shares to “underperform” from “buy” this week.
Airline group Lufthansa plans to cut 4,000 roles by 2030 to boost profitability as it leans into AI adoption. The Germany-based company said most layoffs will be limited to administrative roles as it evaluates what work won’t be necessary in the future. Identifying areas where AI is making work redundant and redeploying or retraining employees to higher-value tasks—rather than hacking away at worker numbers—can preserve institutional knowledge and build trust in the technology’s use across an organization.
The US government faces a shutdown Wednesday unless Congress approves funding for FY 2026 or a stopgap bill, and this one could prove more damaging than past episodes. Unlike prior furloughs, President Donald Trump has vowed mass layoffs of federal workers, a move Goldman Sachs warns could push unemployment higher and worsen already fragile labor conditions. A prolonged shutdown would disrupt air travel, tourism, and retail, with the US Travel Association estimating $1 billion in weekly losses from cancellations and closures. With tariffs, weak international demand, and cautious consumers already weighing on spending, the timing threatens to intensify holiday-season challenges for retailers and travel companies.
The worldwide average session duration for apps in the Entertainment category was 7.3 minutes between April 2022 and June 2025, more than twice the time spent per session on the next-highest category, according to a June 2025 report from Airship.
Albertsons added a travel perk to its loyalty program, joining retailers that are extending membership benefits beyond core offerings in a bid to boost sign-ups and engagement. Loyalty programs increasingly serve dual functions for retailers. Not only do they help reward and retain customers, they are also an invaluable source of consumer data that can power companies’ retail media strategies. By enhancing the value of its loyalty program—and extending those perks to free members—Albertsons can make inroads with both customers and advertisers.
Spirit Airlines’ financial troubles exposed weaknesses in the ultra-low-cost airline model. The carrier has entered Chapter 11 bankruptcy protection twice in the past year, most recently in late August, and is aggressively cutting costs to rightsize operations. The ultra low-cost model isn’t dead—carriers such as Allegiant and Sun Country Airlines are still profitable—but it’s in trouble. Should costs increase and middle- and lower-income consumers continue to cut back, bargain-hunting travelers may face much higher fares as airlines replace economy seats with pricier ones.
Companies are beginning to feel the sting of anti-US boycotts. Anti-US sentiment is especially visible in Canada, where consumers are directing more spending to local retailers and brands—and making fewer visits south of the border. Still, while Canadians are using boycotts to push back against US trade policy, there are few signs elsewhere that anti-American sentiment is driving shoppers away from US brands.
Airbnb may launch a loyalty program at some point, chief business officer Dave Stephenson told Bloomberg. The company has all the ingredients “that would make a compelling loyalty program,” he said—especially following the launch of Airbnb’s services and experiences booking platform. While it’s hardly surprising that Airbnb, a company that has thoroughly disrupted the travel industry, would be reluctant to copy its competitors’ approach to loyalty, there is something to be said for simplicity. What worked for Amazon may not translate as well to Airbnb, given the number of competing platforms that offer similar services—and the fact that most of what it offers is highly discretionary.
President Donald Trump said the US will set a global “baseline” tariff in the 15%–20% range, up from the 10% rate he outlined in April. Our take: Steep tariffs are the new normal. Consumers currently face an average effective tariff of 18.2%—17.3% after adjusting for spending shifts—the highest since the 1930s, per Yale Budget Lab.