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Squaremouth’s 2025 Travel Forecast: Rising Costs and Shifting Destinations – Image Credit Unsplash+
- Travel costs continue to rise, leading to a decline in overall interest in travel.
- Travelers are shifting their destinations, favoring European and Northern locations over others.
Amidst a challenging year for the travel and hotel industry, Squaremouth has released its predictions for travel trends in 2025. The projections are based on travel insurance policy sales data for travel dates between January 1, 2025, and December 31, 2025.
One of the main observations is the continued increase in travel costs. Over the past four years, the average international trip cost has grown 32%, and the trend shows no signs of slowing down. The average international trip cost for 2025 is predicted to be $9,922, an 11% increase from 2024, making travel less affordable for many.
As a result of these rising costs, overall interest in travel is predicted to decline. However, there is a notable shift in the preferred destinations for those still planning to travel. European destinations such as the UK and Italy are seeing a surge in popularity, with interest in trips to the UK rising by 16% and Italy by 11%.
North America is also seeing a shift in travel interest, with a decline in travel to Mexico and increased trips to Canada. This could be attributed to safety concerns, as Canada was recently named one of the safest destinations in the world for travelers.
Another significant trend for 2025 is that older generations are expected to travel more despite the rising costs. Squaremouth’s data indicates that over 80% of travelers in 2025 will be 45 years and older, a surge of 11% compared to 2024. This contrasts with the younger generations planning fewer trips in 2025, suggesting that the rising costs are more manageable for older generations with more disposable income.
|
Generation
|
% of Travelers 2025
|
2024
|
% Change YOY
|
|
Silent
|
6 %
|
5 %
|
+17 %
|
|
Boomers
|
53 %
|
50 %
|
+6 %
|
|
Gen X
|
21 %
|
20 %
|
+5 %
|
|
Millennial
|
11 %
|
11 %
|
0 %
|
|
Gen Alpha
|
3 %
|
5 %
|
-40 %
|
|
Gen Z
|
6 %
|
9 %
|
-50 %
|
Overall, the travel landscape in 2025 is expected to be characterized by high costs and shifting destination preferences. As the industry navigates these changes, it will be crucial for hotels and travel companies to adapt their strategies accordingly.
