Global tourism: record revenues but shrinking margins for 2026
A Travel Trends Advisory report describes a 'Great Repricing': pricier trips, fewer travelers and squeezed profits at airlines and tour operators.
The first edition of Travel Trends Monthly, produced by Travel Trends Advisory with Sherpa, describes what it calls 'The Great Repricing': record revenues that no longer translate into matching profitability. Dan Christian, head of Travel Trends Advisory, said: "I've been in this industry long enough to be suspicious when everyone announces records in the same quarter."
In the US, intent to take summer vacations fell to 45%, the lowest in six years, while the average budget of those who do travel rose 17% to $4,069. Airfare costs rose 25.5% in July against 3.4% inflation. American Airlines reported record revenue of $16.7 billion but net profit of just $71 million. TUI's underlying EBIT fell 27% to €233.8 million, while Tripadvisor saw revenue drop 7% and adjusted profit 21%.
Europe stands out as the only major region growing both volume and value, with international arrivals up 5% and overnight stays up 4.8%. In Greece, June traveler numbers rose 6.9% but receipts grew only 1.2%, with average spend per trip down 6.2% — described by the report as 'volume is being bought.' Spain, by contrast, saw arrivals up 4.6% and spending up 10.9%.
International arrivals to the US fell 7% in July, a fourth consecutive monthly decline, with sharp drops from France, the Netherlands, Switzerland, Germany and South Korea. In the Middle East, arrivals fell 14%, with the WTTC forecasting a 14.5% drop in the region's tourism contribution to GDP.
On technology, Google is testing hotel booking inside AI Mode with partners including Booking.com and Expedia, though AI-driven bookings remain below 1%. In the US hotel market, RevPAR rose 8.2% in July, while over a third of hotel spending now comes from just one-ninth of the wealthiest households.