Travel Industry Outlook: Investment Opportunities for 2026

Evolving consumer spending patterns, and ongoing economic uncertainty are reshaping the travel industry. With inflation expectations still above the Federal Reserve’s target and consumers prioritizing goods over services, the travel sector faces unique challenges.  

At the same time, within each segment of the industry, there are significant investment opportunities for advisors to bear in mind. From hotels and airlines to cruises and global distribution systems, each segment is navigating these trends differently.  

Get a complete analysis of the hurdles, top stock options, and trends of the travel services industry by downloading the full report.

Pervasive inflation and negative trends in employment data are pressuring consumer sentiment.  

Due to tariff policy uncertainty, consumers’ expectations for price increases remained high, at 4.5% in November 2025, versus 4.3% in February 2025. These expectations have translated into consumer hesitancy to spend, keeping savings rates elevated at 4.8% of disposable income. Inflation expectations also remain above the Federal Reserve’s target of 2%.  

There is also a noticeable shift in how much consumers are spending on goods versus services. Real goods spending has grown 3.8% over the past three months, outpacing services spending at 2.2% growth, and therefore affecting travel growth. 

Here’s a brief overview of how major segments of the travel industry—hotels and lodging, airlines, cruises, and global distribution systems—are performing.

Global revenue per available room, or RevPAR, contracted 1.1% in the third quarter of 2025. In the US specifically, RevPAR fell 3.0%. 

Economic concerns also hit occupancy rates, which dropped 33 basis points globally and 90 basis points domestically.  

Hotels are facing headwinds, but brand advantages and pricing systems provide some resilience. Updated reservation and management systems that use dynamic pricing and are supported by artificial intelligence likely helped industry rates.  

Advisors should assess how deeply discounted hotel stocks are and weigh them against a client’s risk tolerance.

Airlines experienced a decline in volume in the third quarter. Global passenger kilometer growth slowed to 4.4% in the recent five months, down from 6.3%. 

A clear divergence in demand exists between luxury and economy flights. Premium international travel grew 8.0%, showing resilience among higher-income households, while economy travel grew just 1.6%, reflecting pressure on lower-income consumers. 

The luxury segment shows resilience, but overall airline performance is under pressure. Advisors should evaluate the uncertainty in airline stocks and consider client-specific risk profiles.

The cruise industry stands out most among other sectors. Advance ticket sales are rising, with total deposits at nearly $16 billion in the third quarter of 2025, up 4% year over year. 

North American travelers are committing to cruises six months or longer in advance, showing clear demand. 

Cruise stocks have high uncertainty ratings but offer strong demand visibility. Advisors should review portfolio allocations based on how discounted these stocks are and align them with client goals. 

Volume growth at Sabre SABR and Amadeus AMS was weak in 2025 because of tariff uncertainty, elevated inflation, and weakening employment rates.  

Sabre’s third quarter bookings rose 5% versus a decline in the second quarter, which could mean potential improvement for business travel in 2026.  

Sabre’s financial health concerns present an opportunity for investors, as the company holds aggregation and processing advantages. Although we think some corporate travel could decline long-term because of video conferencing capabilities, we still expect business trips to see a rebound. As a result, we think Sabre's sales could return to 2019 levels by 2034. 

GDS stocks like Sabre have very high uncertainty ratings but may offer attractive entry points for risk-tolerant clients.

In the nearer-term future, we expect business travel conditions to worsen. Despite headwinds, we do anticipate modest revenue improvement for some sectors of travel:  

• Hotels: 5% sales growth expected

• Online Travel Agencies: 8% sales growth expected

• Cruise Lines: 9% sales growth expected (highest in our coverage)

Consumers’ generally ingrained desire to travel and recovery in group/business demand remain long-term tailwinds.

Travel shares were up only 2% on average year to date through November 30, lagging the global market. Overall, while the macroeconomic picture is mixed for the travel industry, "consumer angst" has created specific pockets of deep value in travel stocks.  

Sabre, with its narrow moat rating, is attractive for its network and switching cost advantages despite some debt concerns. 

Norwegian Cruise Line NCLH’s focus on strategic marketing over discounting, positions it for margin expansion. For Carnival, nearly half of 2026 is already booked at higher prices, limiting near-term pricing risk. Both cruise lines have narrow moats and stand to benefit from upcoming brand-enhancing projects.  

With Choice Hotels International CHH, market concerns over lower-income consumers offer an entry point. The company has a strong extended-stay portfolio and a narrow moat rating.  

Advisors should review client exposure to travel services, specifically looking at undervalued cruise lines and lodging companies that have been unfairly punished by broader market sentiment.  

Advisors looking to expand their perspective with more insights and in-depth analysis across consumer services industries should review our latest Gaming Pulse report.