BMO Capital Maintains Market Weight on Travel Stocks, Cites Uneven Consumer Demand

BMO Capital is maintaining its market weight stance on the global travel industry for 2026, pointing to a complex environment marked by economic uncertainty and diverging trends between high-end and average consumers. The firm's analysis highlights a softening in broader travel demand even as specific segments show resilience.

A Divergent Demand Picture

While overall travel demand remained healthy through the first half of 2026, BMO Capital noted in a report that this strength was primarily concentrated in high-end market segments. The firm's analysis indicates growing pressure on the average consumer, contributing to an uneven recovery.

Several key metrics point to a slowdown. According to the report, U.S. inbound travel demand growth turned negative in April 2026 and continued to decline through the second quarter. In a significant development, global air passenger traffic registered its first decrease since the pandemic era.

In contrast, the lodging sector showed signs of positive momentum. BMO's analysis found that average hotel occupancy increased in the second quarter of 2026. The growth in average daily rates (ADR) also accelerated, roughly doubling the pace seen in the first quarter.

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Analyst Ratings and Outlook

BMO Capital reaffirmed its ratings on several major online travel agencies (OTAs), singling out one name while taking a more cautious approach on others until demand trends improve.

• Booking Holdings (BKNG): The firm reaffirmed its Outperform rating with a $240 price target. BMO described Booking as the "highest-quality name in the sector," citing its favorable geographic exposure and continued growth in alternative accommodations.
• Airbnb (ABNB), Expedia (EXPE), and TripAdvisor (TRIP): BMO maintained its existing ratings, estimates, and price targets for these companies. The firm stated it would await clearer signs of broad demand improvement before adopting a more positive view on these stocks.