The European travel landscape is undergoing a transformation, with shifting budgets, evolving loyalty trends, and new booking behaviors shaping the industry. Skift Research’s latest report, European Travel Insights: Unveiling the Top Trends for 2025, breaks down the biggest shifts in traveler behavior.

The Crossroads of Travel Budgets

Europe’s travel economy is at a crossroads. While some travelers are eager to spend, others are feeling the pressure of economic uncertainty.

The latest data reveals that 39% to 48% of travelers report no changes to their travel budgets, yet concerns about affordability are still shaping spending decisions.

Many travelers are prioritizing flexibility, with 24% increasing their spending on refundable bookings and 33% placing a greater emphasis on travel protection. Meanwhile, budget pressures persist, with 28% raising their travel budget while 20% are cutting back.

These adjustments are leading to a new pattern in spending — some travelers are splurging on experiences and accommodations, while others are scaling down, with 25% reducing their trip frequency and 22% opting for shorter stays rather than eliminating travel altogether.

Value-Driven Pricing: The New Normal?

As a result, businesses must focus on offering value-driven pricing. Refundable bookings, travel insurance, and strategic discounts will play a key role in capturing the attention of cautious travelers.

The question now is whether these budget shifts translate to a long-term change in travel habits.

Rising Travel Budgets: Myth or Reality?

While spending remains stable for many, growth in travel budgets is modest. Across Europe, Spain and Germany lead the trend, with 65% of travelers expecting to spend more on travel in the next year, while the UK trails at 58%.

The majority of travelers are expecting a rise of up to 10%, with just 12% predicting their spending will increase by more than 20%. This suggests that rising costs — not a surge in discretionary spending — are driving higher budgets.

Price sensitivity remains high, meaning brands that can deliver a balance between affordability and premium experiences will have a competitive edge.

Loyalty is Changing: Who Holds the Edge?

Loyalty trends are shifting, with airlines maintaining stronger customer retention than hotels. UK travelers report the highest airline loyalty scores at 66, with the European average at 62. In contrast, hotel loyalty remains weaker, with an average score of 53 across Europe.

Our Loyalty Stickiness Index measures how consistently travelers engage with brands despite price fluctuations. The data reveals that while frequent travelers participate in loyalty programs, many remain flexible and willing to switch brands for better pricing or convenience.

To strengthen retention, brands must evolve beyond traditional loyalty programs, offering personalized, experience-driven rewards that create stronger emotional connections with travelers.

What’s Next for European Travel?

From booking trends to shifting brand preferences, the European travel market is evolving rapidly. Understanding who is spending, how they are spending, and why they are switching brands is the key to success in 2025.

As travelers navigate economic pressures, brands that offer adaptable, consumer-focused solutions will emerge as winners. For airlines, hotels, OTAs, and tourism boards, this report is your roadmap to navigating these changes.