Travel Trends 2026
Big changes are taking off in the travel world. Travellers want more, tech is moving fast, and efficiency is the name of the game. As 2026 approaches, OTAs must level up or risk falling behind. So what are the changes we should look out for?
Pax2pay CEO Päivo Eerola weighs in with his opinions:
Major Shifts in Consumer Behaviour and Their Impact on OTAs:
Consumer decision-making in travel is increasingly influenced by social media and Artificial Intelligence (AI). Travellers are demanding more tailored, convenient, and value-aligned experiences, with an increasing trend towards self-packaging of trips. This empowers consumers to curate their itineraries, making it crucial for OTAs to articulate and enhance their unique value proposition.
Sustainability, the challenges of hyper-tourism in popular destinations, and climate change are also reshaping travel patterns, influencing where, when, and how consumers choose to explore. The rise of destinations like Lapland for winter sports exemplifies this shift.
From a financial perspective, the industry faces an urgent need for substantial cost optimisation due to inherently thin margins.
There’s a growing demand for enhanced operational efficiency, robust security measures to combat sophisticated fraud, and seamless capabilities for complex cross-border transactions. Despite these challenges, the global travel industry continues its robust growth, with a 10% Compound Annual Growth Rate (CAGR), particularly driven by developing countries with rising middle classes seeking premium experiences.
Key Challenges for OTAs
OTAs will navigate several critical challenges in the coming years:
The Influence of Social Media and AI-driven travel curation: Social media platforms are now powerful tools for travel inspiration, reviews, and recommendations. This, coupled with AI tools, allows consumers to “self-package” their travel. To compete, OTAs must continuously highlight their unique value proposition, offering unparalleled choice and comparison capabilities, competitive bundled deals, and a superior, friction-free booking experience across various travel components.
Direct Booking Pressures: Many suppliers (airlines, hotels) are actively encouraging direct bookings through loyalty programmes, exclusive deals, and enhanced direct digital experiences. This puts significant cost pressure on OTAs, who must adapt to operating with even thinner margins as price-conscious consumers compare alternatives.
Building Customer Loyalty: Well-defined loyalty programmes and innovative pricing models, such as travel clubs based on monthly subscriptions, are becoming crucial for increasing retention and loyalty. OTAs will need to build their own loyalty programmes or strategically integrate with supplier loyalty schemes.
The Pivotal Role of Technology and Payments Innovation:
Technology and payment innovations are central to an OTA’s success.
Key areas of focus include:
Addressing the Liquidity Gap: Efficient management of cash flow is vital.
Optimising Acceptance: Ensuring a wide range of accepted payment methods is essential for global reach.
Cost Optimisation and Automation: Streamlining financial processes to reduce operational costs.
New payment technologies, such as virtual cards and real-time settlement systems, are already transforming cross-border transactions for OTAs.
AI and data analytics are poised to play an even larger role in improving the payment experience, particularly in fraud prevention and payment optimisation. Furthermore, embedded finance and payment automation offer significant opportunities for OTAs to streamline operations and reduce costs.
Managing Global Operations and Currency Risks: As OTAs expand globally, they face challenges with international payments and currency fluctuations. Virtual cards offer a powerful solution, enabling OTAs to minimise foreign exchange risk and optimise payment processes when working with international suppliers.
Strategic Opportunities in Travel Payments: The travel payments space presents untapped opportunities. OTAs should strategically enhance their payment infrastructure, prioritising efficiency, security, and customer experience to stay competitive.
The Future of Virtual Cards in Travel Payments: Virtual cards are expected to play an increasingly significant role in OTA payments, streamlining supplier payments and enhancing operational control. Many OTAs are already leveraging virtual cards to improve payment processes, realising benefits such as enhanced security, reduced manual reconciliation, and greater financial control.
The Importance of Financial Agility and Resilience: Financial agility is paramount for OTAs in the coming years, enabling them to navigate fluctuating market conditions, demand, and price sensitivity. Payment innovations like virtual cards are crucial tools for OTAs to become more resilient in the face of disruptions such as market volatility, climate events, or political uncertainty.
Looking Ahead: Adapting and Exploiting Opportunities
To thrive, OTAs must proactively adapt to identified threats and strategically exploit new opportunities. This involves continuous innovation in their value proposition, embracing cutting-edge payment technologies, prioritising customer loyalty, and building robust financial agility to withstand market shifts.
The future of OTAs lies in their ability to seamlessly integrate technology, understand evolving consumer demands, and optimise their financial operations for sustained growth and resilience.