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Key takeaways:
- Younger travelers now represent a meaningful share of hospitality spending and cultural influence, and their expectations around authenticity, recognition, and trust are already redrawing brand strategy.
- Artificial intelligence is reordering the economics of hotel discovery, structurally favoring brands over independents and lodging companies over online travel agencies.
- Loyalty is moving from transactional accrual toward recognition, and the brands better positioned to compete are those that can see a guest’s life beyond the stay.
This summer, consumers seem to be spending money on experiences, even as they grow more cautious about nearly everything else. International inbound travel to the United States has softened, but domestic leisure demand remains resilient. Luxury is pacing well ahead of the middle of the market, and the middle of the market is pacing well ahead of the lower end. Airlines have trimmed capacity in anticipation of a slower fall, but hotels, for their part, are finally seeing RevPAR rebound and demand broaden. The picture is not uniformly good, but it is better than it has been in some time. Whether it holds through the holiday season is a question we’ll be watching closely this fall.
Against this backdrop, there is room for cautious optimism. Forecasts for 2026 have been revised upward, as noted in PwC’s Hospitality Directions report. Luxury transactions are moving again, and the bid-ask spread has begun to narrow. When the industry convened in New York in June for the annual NYU International Hospitality Investment Forum, the headline data gave the room a chance to exhale. By the standards of a business that has spent much of the post-pandemic period recalibrating, this counts as good news.
Still, the mood across the industry is not celebratory so much as watchful. Geopolitical uncertainty remains a fixture in each forecast. Wage negotiations are unresolved in several major markets. Fuel and food prices continue to put pressure on US households. And a growing number of owners are asking, more openly than in past years, whether a brand universe has become too crowded to allocate capital with real conviction.
What’s notable this summer, though, is less the state of the cycle than the shape of the conversation underneath it. Two questions in particular are organizing nearly every strategy discussion. The first concerns the top of the funnel—how travelers can find hotels in a world where search is increasingly mediated by artificial intelligence, and what that means for brands, independents, and the online travel agencies (OTAs) that have long sat between them. The second concerns the traveler on the other end of that funnel—specifically, a younger generation whose commercial power and cultural influence have moved, quietly but decisively, from the projected to the present tense.
These themes came into sharp focus at NYU, where PwC’s Jeanelle Johnson led an on-stage discussion with a recent NYU graduate about how her generation actually travels. Here’s what stood out from that conversation—and from a broader set of summer conversations with operators, owners, and brands—and what it all means for the hospitality leaders now planning for the second half of 2026 and beyond.
You’ve pushed back on the phrase “next generation.” Why does the language matter?
Because the language we use shapes the decisions we make, and the phrase “next generation” gives the industry permission to wait. It suggests that a younger cohort of travelers, namely Gen Z, is still coming into view, still forming their preferences, still on their way to becoming meaningful. None of that is true anymore. They’re adults. They’re earning. They’re traveling. They already represent a significant share of hospitality spending, and their cultural influence—on where people go, how they book, what they expect when they arrive—extends well beyond their own demographic. When we call them the next generation, we’re describing a customer in the future tense who has, in fact, already arrived.
What stood out from your recent conversation with a Gen Z traveler?
Two things, in particular. The first was her clear desire to travel like a local rather than a tourist. She said that her generation is less interested in curating a manufactured version of a trip than in absorbing the place they are in. And I think that’s a meaningful shift away from the social media-driven, shareable-moment model that shaped a decade of hotel design and marketing.
The second, related to the first, was her interest in the idea of a digital detox. She spoke about wanting to be offline, to have the space to be present. That is coming from a generation raised on screens, and it should tell us something about what this group of travelers actually values in an experience.
What does that mean for how brands should think about product and experience?
It means brands shouldn’t be binary. There’s still real demand for the rooftop, the shareable dinner, the moment worth photographing. That’s not going away. But there’s also a growing cohort of travelers who want something closer to the opposite—presence, place, quiet, authenticity. The brands that will likely win the next decade are the ones that can design for both without diluting either.
That’s harder than it sounds. It requires real clarity about who a property is for, what role it plays in a guest’s life, and how the experience is delivered consistently across a portfolio. Micro-segmentation, which the industry has been pursuing at the brand level, with roughly seven new brands introduced in the US each year since 1980, has to translate into micro-experiences on property. A new flag is not, by itself, a strategy.
Loyalty has been a recurring theme this year. Where’s that conversation heading?
Away from points, and toward recognition. The traditional earn-and-burn model—stay enough nights, receive a free one—is losing its hold on younger travelers. They’re less brand-captive than the generation before them, and they will often trade loyalty for a distinctive experience without much hesitation.
What’s becoming clear is that loyalty in an AI-mediated world is going to look fundamentally different. The programs that win will likely be the ones that can use AI to map a guest’s full spend and aspirations—on-property, off-property, entertainment, dining, broader consumer behavior—and use that map to show the guest, credibly, that the brand understands them. Points are becoming table stakes. Recognition, in the fullest sense of the word, is the new currency.
And this generation will verify. They will happily use AI to plan a trip, and they will then cross-check what the model tells them against online forums, against friends, against community sources they trust. Trust is not automatic, and it cannot be manufactured. Brands that show up authentically in those verification loops will likely win. Brands that optimize only for the model may not.
How has the tone on AI shifted this year?
The industry has moved from imagining AI to operationalizing it. A year ago, the conversation was about digital concierges and reimagined guest journeys. This year it was about return on investment, revenue management, and specific customer service touchpoints. Operators want what one panelist called a single pane of glass—one integrated view, not five systems their teams have to reconcile. AI is not replacing the humanity of hospitality. It’s helping teams see patterns faster and make better daily decisions. The larger prize of potentially using AI to help model business strategy and inform capital allocation is still ahead, but it is coming into focus.
The discoverability piece is the part owners and operators should be paying closest attention to. Consumer travel search is increasingly starting with AI. The hotel or brand that surfaces in that search is the one with rich, structured, machine-readable property data—down to details as specific as the temperature of the pool. That structurally favors brands over independents, and lodging companies over online travel agencies, because the OTAs depend on the hotels for the underlying data in the first place. Data readiness and governance are no longer back-office concerns. They’re commercial strategy.
What are a few things hotel owners and operators should focus on this year into next?
Three things, and none of them can wait for a clearer signal. First, audit your data. If your property information is not structured, current, and optimized for AI-mediated search, you’re losing bookings you may never know you lost. This is a board-level issue, not an IT one, and the gap between leaders and laggards is likely to widen quickly. Second, look at your loyalty program. Is it a points ledger, or does it actually recognize your guest? Those are two very different things and the distance between them could define brand competition for the next decade. Third, move beyond designing for a traveler who has already arrived as though they are still on their way. The generation you are planning for in 2027 is checking in this summer. They are telling you, clearly, what they want. The work is to listen.
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