As you know, I’ve been watching the travel industry for a long time, and the data right now is telling a compelling story that’s hard to ignore. Despite the negative headlines, rising oil prices and a healthy dose of political noise, global travel is running at full throttle. By virtually every meaningful metric, the runway looks even longer to me.
According to the UN World Tourism Organization, an estimated 1.52 billion international tourists traveled the world in 2025. That’s nearly 60 million more than the year before, representing 4% growth, and it marks a return to the steady, pre-pandemic growth trend of 5% annually that the industry enjoyed between 2009 and 2019.
The recovery is real, it’s broad-based and it’s gaining momentum.
Asia-Pacific on Track to Surpass Europe as Largest Travel Market
The World Travel & Tourism Council projects the industry will contribute a record $11.7 trillion to the global economy in 2025, equivalent to 10.3% of world GDP. International visitor spending is forecast to hit $2.1 trillion, surpassing the previous all-time high of $1.9 trillion set in 2019.
Looking further out, a landmark study by Google and Alvarez & Marsal projects that by 2050, international travel will double to roughly 3.5 billion trips annually, generating $6 trillion in spending. That’s $4.2 trillion in incremental value created over the next 25 years.
Asia is the engine powering much of this long-term growth. The Asia-Pacific region (APAC) is in the middle of the largest middle-class expansion in human history. By 2035, APAC will be home to 3.2 billion of the world’s projected 5 billion middle-class consumers. These are people who aspire to see the world, and they increasingly have the means to do it.
APAC, in fact, is on track to surpass Europe as the world’s largest travel source market. China’s Spring Festival travel season is already offering us a preview: flight bookings for the 2026 festival surged an astounding 400% year-over-year.
Record Revenues for the Big Four Airlines
You don’t have to take the macro data at face value. Just look at the earnings reports coming out of the major U.S. carriers.
, for instance, generated a record $58.3 billion in 2025 revenue. hit $59.1 billion, also a record. delivered record fourth-quarter revenue of $14 billion. And , which spent 2025 executing its most ambitious business transformation in company history—introducing bag fees, assigned seating and extra legroom options—reported record fourth-quarter passenger revenues of $3.8 billion, up 7.6% year-over-year.
Premium demand in particular is outperforming. Travelers are trading up, spending more per trip and showing remarkable resilience in the face of economic headwinds.
Europe’s tourism sector illustrated this perfectly. While international arrivals grew a healthy 3.2% in 2025, spending grew nearly 10%. That gap should tell investors about the quality of demand right now. People aren’t just showing up… they’re showing up and opening their wallets.
Short-Term Turbulence: Iran and Oil
I’d be remiss if I didn’t acknowledge the near-term risks. The most pressing, as I write this, is oil. West Texas Intermediate (WTI) crude is up more than 16% year-to-date, and with President Donald Trump signaling a potential military decision on Iran within days, oil markets are pricing in a meaningful risk premium.
For airlines, where fuel costs can represent 20% to 40% of total operating expenses, a prolonged oil spike could be a serious margin headwind. Airline stocks already came under pressure last week as a result.
History tells us, though, that geopolitical shocks to oil prices tend to be temporary in nature. Travel demand has proven remarkably durable through past crises, and the structural drivers—the middle-class expansion, the rising connectivity, the pent-up desire to explore—don’t evaporate because of a short-term spike in crude.
I think smart investors know to distinguish between cyclical noise and secular trends. And right now, the secular trend in travel is unmistakably upward.
A Word on the Plunge in Canadian Travel to the U.S.
Canadian visits to the U.S. fell roughly 20% between January and October 2025, while January 2026 data from Statistics Canada shows Canadian trips to the U.S. down a staggering 28% compared to 2024 levels. A Blue Cross survey found that 76% of Canadians now say they are less likely to visit the U.S., a direct result of some of President Trump’s political rhetoric directed at our northern neighbors.
As a proud Canadian-born American, I’ve long believed that former Prime Minister Justin Trudeau’s economic policies hurt Canada, and I wasn’t alone in that view. But there’s a huge difference between criticizing a government’s policies and treating an entire nation and its people as adversaries.
Canadians are among the most loyal visitors, trading partners and friends the U.S. has ever had. Alienating them is a self-inflicted economic wound, I believe, and the numbers are beginning to prove it. The U.S. Travel Association estimates that Canadian visitors generated $20.5 billion in spending and supported 140,000 American jobs in 2024. That’s not a trivial number to wave away.
The Investment Thesis Remains Intact
Despite the near-term volatility, I remain firmly constructive on the travel and tourism sector as a long-term investment opportunity. The macro tailwinds are among the strongest I’ve seen in my career: a once-in-a-generation middle-class expansion across Asia, record global tourism volumes, airline earnings at all-time highs and a pipeline of growth stretching out to mid-century.
U.S. hotel investment hit $24 billion in transaction volume in 2025—up 17.5% year-over-year—signaling that institutional capital is moving confidently into the sector. The 2026 FIFA World Cup, hosted across major U.S. cities, is a near-term catalyst that analysts project could drive mid-double-digit revenue-per-available-room growth in host markets. Europe is forecasting 6.2% arrival growth in 2026, with long-haul travel expected to surge 9%.
The short-term risks (elevated oil prices, the Iran situation, U.S.-Canada relations) are real and deserve monitoring. But they don’t change the fundamental trajectory of an industry that’s growing larger, more global and more economically significant with each passing year. For patient investors with a long-term appetite, that trajectory is the story worth focusing on.
Wheels up!
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Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of (12/31/2025): Southwest Airlines Co., United Airlines Holdings Inc., Delta Air Lines Inc., American Airlines Group Inc.
