Global travel may see strong growth in 2026

The global tourism forecast for 2026 indicates continued strong demand, driven by value-seeking, experience-focused travelers, even amid economic pressures, with trends leaning towards personalization, secondary destinations (such as Eastern Europe), ‘pawprint’ travel (including pets), and tech-driven convenience (AI, connected hotels). Key shifts include dispersing tourism beyond major hubs, increased spending on premium/curated trips, and rising demand for ‘destination dupes’ and culinary souvenirs, all while airports and airlines improve amenities.

Internationally, the industry is also looking positively into the future. According to the biannual study by the UFI, the Global Association of the Exhibition Industry (UFI Global Barometer), 34 to 39 per cent of companies expect an increase in turnover of more than five per cent in 2026 from space rental and services. Particularly strong growth is forecast in Saudi Arabia, the United Arab Emirates, India, Mexico, Argentina, Brazil, and Colombia. In contrast, stability is predominantly expected in the major markets of the USA and Germany, while the Chinese trade fair market is projected to see a downturn. The greatest challenges cited are the uncertain global economy, geopolitical tensions, and dealing with sustainability and digitalisation. 2026 is set to be another strong year for the global travel industry. IATA expects global traffic to reach 5.2 billion passengers in 2026. Total net profit and operating profit are expected to increase to combined $41 billion and $72.8 billion, respectively, with a record load factor forecast of 83.8 per cent.

Airlines are expected to generate a 3.9 per cent net margin and a $41 billion profit in 2026. “That’s extremely welcome news considering the headwinds that the industry faces—rising costs from bottlenecks in the aerospace supply chain, geopolitical conflict, sluggish global trade, and growing regulatory burdens among them. Airlines have successfully built shock-absorbing resilience into their businesses that is delivering stable profitability,” said Willie Walsh, IATA’s Director General. While the strong performance of airlines in the face of a changing and challenging operating environment is impressive, the fact that the airline industry collectively does not generate earnings that cover its cost of capital remains an issue to be resolved. “Industry-level margins are still a pittance considering the value that airlines create by connecting people and economies. They stand at the core of a value chain that underpins nearly 4 per cent of the global economy and supports 87 million jobs. Yet Apple will earn more selling an iPhone cover than the $7.90 airlines will make transporting the average passenger. And even within the air transport value chain, airline margins are totally out of balance, particularly when compared to margins of engine and avionics manufacturers and many of our service suppliers. Imagine the additional power that airlines could bring to economies if we could re-balance value chain profitability, reduce regulatory and tax burdens, and alleviate infrastructure inefficiencies,” said Walsh.

Air cargo’s performance is of particular interest as it has defied many predictions of gloom to hold its own amid rapidly changing trading conditions. “The resilience in air cargo has been particularly impressive. As trade flows adapt to a protectionist US tariff regime, air cargo has been the hero of global trade, buoyed in part by robust e-commerce and semiconductor shipments to support the boom in AI investments.

Overall revenues are expected to grow by 4.5 per cent to $1.053 trillion. This is expected to outpace operating expense growth of 4.2 per cent to $981 billion, leading to a $1.5 billion improvement in industry-wide net profitability in 2026. Macro-economic factors impacting airlines are mixed for 2026. On the positive side, global GDP growth is expected to be largely stable at 3.1 per cent and inflation is expected to ease slightly to 3.7 per cent. World trade growth is, however, expected to be anemic at 0.5 per cent.

Travel and tourism is expected to generate $11.7 trillion toward global GDP and support nearly 371 million jobs, underscoring the sector’s enduring resilience.

Traveler behavior is also rapidly evolving. More than half (58 per cent) of active US travelers report using artificial intelligence (AI) for something, and 39 per cent are using it specifically for travel research and planning. Millennials are at the forefront: 58 per cent have leaned on AI to cut through information overload, compared to 45 per cent of Gen Z and 11 per cent of baby boomers.