Next stop for global travel

Frank Holmes, CEO and CIO | U.S. Global Investors

Global airfares are expected to remain mostly stable through 2026.

In 2025, we’ve seen global travel transition from a rapid post-pandemic rebound to a more mature, normalised phase. Demand for experiences over things has proven resilient, even as growth is slower than the breakneck pace of 2022-2024.

Against this backdrop, we believe the airlines, hotels and cruise lines that make up travel’s investable universe are entering 2026 from a place of cautious strength.

In the U.S., overall travel spending continues to grow, albeit at a more moderate rate. The U.S. Travel Association projects travel spending to rise only 1% this year, to $1.35 trillion, supported largely by domestic leisure travel, which is forecast to increase approximately 2% to $895 billion. International inbound travel is expected to decline 6% in 2025, reflecting a mix of economic uncertainty, a strong U.S. dollar and higher entry and visa-related fees.

We believe 2026 looks more promising, due to major upcoming events such as the FIFA World Cup and America’s 250th anniversary.

« Looking ahead, we believe the environment for travel companies continues to shift from recovery to rational growth. »

Commercial Aviation
Airlines see a similar pattern of normalisation. Lufthansa’s chief executive recently suggested that weak transatlantic demand has likely bottomed, with bookings for late 2025 and 2026 looking “very encouraging.” Low-cost carrier Ryanair has lifted its fiscal 2026 passenger goal to 207 million on the back of robust demand and improving aircraft deliveries. Meanwhile, American Express Global Business Travel expects global airfares to remain mostly stable through 2026, pushing carriers to focus more on premium cabins, ancillary services and more.

Hotel occupancy and pricing remain near historically healthy levels.

Hotels
The hotel segment looks to be experiencing a mild reset rather than a downturn. CoStar and Tourism Economics have modestly downgraded their U.S. outlook, with 2025 occupancy now projected at 62.3% and revenue per available room (RevPAR) expected to decline 0.4%, marking the first annual pullback since 2020. Similar small adjustments were made for 2026. Even so, occupancy and pricing remain near historically healthy levels, and a multi-year pipeline of global sporting and cultural events should help support demand across key North American cities.

Cruise Lines
One of the brightest spots in the travel ecosystem continues to be cruises. AAA expects 20.7 million Americans to cruise in 2025 and a record 21.7 million in 2026, implying an 8.4% increase from 2024 and 2025 and a further 4.5% gain the following year. This speaks to the strength of the U.S. consumer and the value of all-inclusive travel experiences.

Summary
Looking ahead, we believe the environment for travel companies continues to shift from recovery to rational growth. Domestic leisure demand and cruises remain key pillars, while U.S. tourism and some hotel markets face near-term headwinds from higher costs and softer incomes in select economies. Within this context, the TRIP ETF offers investors diversified exposure to airlines, hotels and cruise lines that are positioned to participate in a multi-year normalisation of travel, supported by stable airfares, improving capacity and a full calendar of major events.
The Travel UCITS ETF (TRIP) seeks to offer exposure to the travel industry as it tracks Airlines, Hotels, Cruise Liners and Online Booking companies.

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Next stop for global travel

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« Looking ahead, we believe the environment for travel companies continues to shift from recovery to rational growth. »