Travel is still booming by many measures. But behind the record spending and luxury hotel openings, a growing number of people are shortening trips, trading down or staying home altogether.
Stand in the lobby of a new luxury hotel in Bangkok, Dubai, Mumbai or Tokyo and it can be difficult to believe that travellers are feeling financially constrained.
Suites are selling. Restaurants are full. Private tours, airport transfers and elaborate wellness experiences are being added to already expensive itineraries. Hotels continue to open at the highest end of the market, while airlines devote more space and attention to premium cabins.
A few blocks away, however, another version of the travel economy is emerging.
Budget-conscious travellers are booking later, travelling closer to home, shortening their stays and scrutinizing every additional charge. Some are replacing hotels with vacation rentals. Others are cancelling trips entirely.
Travel may still be booming, but not everyone is participating in that boom in the same way.
The result is a widening divide between travellers who can absorb higher prices and those for whom every increase in airfare, accommodation, insurance, food and transportation makes the journey harder to justify.
It is creating a travel industry in which the five-star hotel can appear full while the three-star property struggles—and where strong spending figures can disguise the fact that fewer people can afford the same freedom to travel.
A boom measured in dollars
On the surface, global tourism looks remarkably healthy.
The World Travel & Tourism Council estimates that travel and tourism contributed US$11.6 trillion to the global economy in 2025, representing 9.8 percent of global GDP. International visitor spending reached US$2.02 trillion, while the sector supported approximately 366 million jobs worldwide.
Those are enormous numbers. They reinforce the familiar narrative that travel has recovered, demand remains resilient and consumers continue to prioritize experiences over material purchases.
But total spending does not reveal who is doing the spending.
A smaller number of affluent travellers can generate extraordinary revenues through premium flights, luxury accommodation, private transportation, fine dining and highly curated experiences. A family taking one modest road trip and a couple spending US$30,000 on a private island holiday both count as travellers, but their economic impact is dramatically different.
Visa estimates that households earning more than US$200,000 annually account for as much as one-quarter of all travel spending worldwide, despite representing a relatively small percentage of the population. Their choices increasingly influence which destinations, hotels and experiences receive investment and international attention.
The industry can therefore continue growing even when a significant share of potential travellers is cutting back.
Travel’s headline numbers may remain impressive, but the boom is becoming increasingly concentrated.
The hotel market is revealing the gap
Few sectors illustrate the divide as clearly as hotels.
According to PwC’s hospitality outlook, based on STR data through August 2025, revenue per available room increased 5.3 percent in the luxury hotel segment compared with the previous year. Economy hotels recorded a 1.8 percent decline.
Luxury and upper-upscale hotels were the only two major hotel categories to achieve positive revenue growth over that period. Much of the luxury increase came from higher room rates rather than greater occupancy, suggesting affluent guests were willing to pay more even as other travellers became increasingly price-sensitive.
That pattern continued to appear in the financial results of some of the world’s largest hotel companies.
Marriott reported that room revenue at its US luxury hotels increased 4.9 percent during the final quarter of 2025, while its more budget-oriented select-service segment declined 1.8 percent. Globally, revenue from Marriott’s luxury properties grew by more than six percent. Chief executive Anthony Capuano described international demand for luxury as “almost insatiable.”
Hilton offered a similar picture early in 2026. The company said spending by budget-conscious travellers had softened demand for its midscale and lower-priced properties, while luxury brands such as Waldorf Astoria and Conrad continued to benefit from strong premium demand.
The divide is not absolute. Some lower-priced hotel segments have since shown signs of improvement, and performance varies considerably by destination, event calendar and local economy. Three-star hotels are not literally empty, just as every five-star property is not full.
But the underlying direction is difficult to ignore: affluent travellers have generally been better able to continue spending, while travellers with less financial flexibility are more likely to reduce nights, seek discounts or abandon the trip.
The people disappearing from the statistics
For many travellers, the first response to higher prices is not to stop travelling altogether. It is to quietly make the trip smaller.
The international holiday becomes a domestic one. Ten nights become seven. The city-centre hotel becomes a property farther from the attractions. Restaurant dinners become supermarket meals. Checked luggage, airport transfers and guided tours become optional luxuries.
Eventually, there is little left to remove.
Bank of America’s 2026 Summer Travel Outlook found that nearly 40 percent of lower-income US households had no summer travel plans. Card spending on travel among those households was also lower than a year earlier, while middle- and higher-income households were recording stronger travel spending.
A separate 2026 survey cited by Reuters found that only 45 percent of Americans planned to travel during the summer, the lowest proportion in six years. The decline was especially pronounced among middle-income households. Among those who continued to travel, many were waiting longer to book, hoping for lower prices or choosing less expensive alternatives.
This behaviour does not always register as a crisis.
There are no dramatic airport scenes when a family decides not to take a holiday. No cancellation announcement is issued when someone concludes that the airfare, hotel, meals and local transportation have become too expensive.
They simply disappear from the market.
That disappearance matters because travel has become more than an occasional indulgence. It is one of the ways people maintain family relationships, encounter different cultures, celebrate milestones and understand a world beyond their own communities.
When access to those experiences narrows, the consequences are cultural as well as economic.
Asia is experiencing both sides of the divide
Across Asia, the contrast can be particularly striking.
The region continues to experience strong demand, expanding air connectivity and an extraordinary wave of high-end hotel development. STR forecasts revenue per available room across 16 major Asia-Pacific hotel markets to rise 3.6 percent in 2026, supported partly by higher average room rates.
India offers one of the clearest examples of premium resilience.
Leela Palaces Hotels & Resorts reported a 20 percent increase in revenue per available room during the quarter ending in December 2025, with occupancy reaching 71 percent. The company is expanding from 23 hotels, including properties under development, to at least 35 over the next five to seven years, betting on a growing affluent population and a limited supply of luxury rooms.
Similar investment can be seen in Bangkok, Singapore, Bali, the Maldives, Japan and the Middle East, where international brands continue to introduce private villas, branded residences, exclusive clubs and increasingly elaborate wellness programs.
Yet Asia also depends heavily on price-sensitive travellers—from regional families and young independent visitors to domestic tourists, backpackers and the expanding middle classes that powered much of the region’s tourism growth.
For these travellers, rising airfares can quickly outweigh the relatively affordable cost of food or accommodation after arrival. A destination may still appear inexpensive on the ground, but reaching it has become the largest obstacle.
This creates a difficult contradiction for tourism-dependent countries. Luxury travellers bring high spending with relatively low visitor volume, an attractive combination for destinations concerned about overtourism. But a tourism economy built primarily around affluent visitors can also become detached from the small hotels, restaurants, drivers, guides and local businesses that depend on a much broader flow of guests.
A full luxury resort does not necessarily compensate the entire community for thousands of missing mid-market travellers.
The industry is following the money
Travel companies are not causing the income divide, but they are adapting to it.
Airlines are adding premium suites, private doors, lounges and high-end dining because those products produce considerably more revenue than another row of economy seats. Hotel companies are expanding luxury portfolios because affluent guests are less price-sensitive and more likely to spend on dining, spas and experiences.
Destinations are also targeting what tourism officials often call “high-value travellers”—visitors who stay longer, spend more and place less pressure on infrastructure than large tour groups.
There is logic behind the strategy. No company can be expected to ignore its most profitable customers.
The danger comes when the entire industry begins designing itself around them.
Affordable rooms become harder to build because land, construction and staffing costs favour higher rates. Airlines introduce a growing maze of fees around the lowest fares. Attractions create premium access, express lines and exclusive experiences. Even previously public or spontaneous parts of a destination can become packaged, reserved and monetized.
Travel does not disappear. It becomes tiered.
There is one version for those who can move quickly, comfortably and conveniently, and another for those who spend more time comparing, waiting, compromising and worrying about the final bill.
A different definition of tourism success
The widening divide raises an uncomfortable question: what does it mean to say tourism is thriving?
If hotel revenue rises because room rates are higher, but fewer people stay, is that success?
If airlines earn more from premium cabins while economy travellers fly less often, is international mobility genuinely expanding?
If a destination attracts greater spending but becomes inaccessible to average visitors—or even to its own residents—what exactly has been gained?
Tourism will always include luxury. Exceptional hotels, ambitious restaurants and carefully designed experiences contribute creativity, employment and investment to destinations around the world.
The concern is not that some travellers choose five-star hotels. It is that travel could gradually become less attainable for everyone else.
There are still reasons to believe the divide can be narrowed. Low-cost airlines, rail travel, hostels, vacation rentals and independent hotels continue to create alternatives. Travellers are becoming more flexible about seasons and destinations. Secondary cities can offer richer experiences at lower prices, while improved regional transportation can spread visitors beyond expensive tourism centres.
The travel industry can also protect accessibility by offering transparent pricing, meaningful mid-market options and experiences that do not require every moment of a journey to be upgraded.
Because the future of travel should not be measured only by how much money the industry generates.
It should also be measured by how many people still feel the world is within their reach.
Right now, travel is still growing. Hotels are opening. Flights are full. Luxury demand remains remarkably strong.
But behind those confident numbers, the distance between those who can travel without hesitation and those who must question whether they can travel at all is becoming increasingly difficult to ignore.
